SALES NEWSLETTER DECEMBER 2009
Tuesday, December 01, 2009
2010 Sydney Real Estate Forecast
It's time to pull out the old crystal ball for what lies ahead for Sydney's real estate in 2010. Mind you, house price forecasting these days is becoming darker than the darkest of arts.
Even so, our first prediction is that Sydney will record another 4 per cent-plus rise in house prices (as measured by the Australian Bureau of Statistics) for the December quarter. Present indications on housing finance, sales plus fewer listings suggest we are recording accelerated house price growth across Sydney.
This growth is likely to slow to about 2 per cent a quarter (on average) for 2010, due to a lack of first-home buyers and concern among investors about the direction of interest rates.
Due to the forecast house price gains next year there's going to be increased building activity as developers will be able to build at a profit once again and access to finance will become easier for them.
The higher end of the market is likely to outperform the affordable end.
Those with the money have been increasingly entering into the market, snapping up heavily discounted properties over the $1.5million range. And as overall Sydney prices continue to rise, speculative activity will be the greatest at the top end.
Despite an upturn in building activity, vacancy rates at the affordable end of the market will remain tight and they will become tight again for the affluent part of the market as the economy continues to recover. However, don't believe stories about asking rents rising 40 per cent-plus at the upper end. That is just not happening. I like to follow the official data from the NSW Department of Housing which has indicated rental growth being positive, but a more benign 3.9 per cent a year (Sydney-wide) and 2.2 per cent a year for the affluent inner ring, which I think is the true state of affairs. Next year, rents will probably grow slightly quicker at 5 to 6 per cent a year.
Of course, the key is going to be interest rates and just how far they will rise. At the moment the market is forecasting average home lending rates to be 7.25 per cent by June 2010. A month ago the market was factoring in a more aggressive 7.75 per cent, so expectations have eased a little.
I would not like to see lending rates at 8 per cent next year. Our modelling suggests that's a level where many buyers (of all types) and existing home owners would not tolerate.
But if home loan lending rates stabilise below 7 per cent, investors will remain encouraged to enter the market.
Author: Louis Christopher (Louis Christopher is managing director of SQM Research and head of property at Adviser Edge)
Publication: Sydney Morning Herald
Holiday Security Tips
Is your home one of the few in the street with an alarm, dog, well-secured doors and windows or where the occupants come and go at irregular times? If so, then give yourself a big tick for offering the least opportunity/risk to aspiring thieves.
But with the festive Christmas season approaching, making your home less attractive to opportunistic thieves is harder when you go on holiday. The very noisy canine has taken his scary attention-attracting bark to the boarding kennels and the occupants are not coming and going… they’re gone.
When protecting your home and valuables during this period of time, it is important to take into consideration the way thieves think. Does your home look neglected, abandoned, unused? If so, make it look occupied.
- Leave a light on inside if you intend returning home after dark. The light should be visible from the street and give the impressions that the house is occupied;
- Consider using an automatic lighting timer;
- Never leave notes. Thieves can read too;
- Keep blinds and curtains partly open to give the house a ‘lived in’ appearance, if you are going away for some length of time;
- Cancel all regular deliveries, e.g. milk, newspapers so the stockpile doesn’t give the game away;
- Ask a friend or neighbour to keep an eye on your home and collect any other deliveries that may be made during your absence;
- Ask the Post Office to hold your mail;
- Ask a friend or neighbour to park a car in your driveway from time to time;
- Lock away all portable garden equipment, tools, ladders or anything that could be used to break into your house;
- Securely lock your garage; most breaking-in implements are found there;
- Lock all doors and windows;
- Take your keys or leave them with a friend. Do not hide them;
- Remove all money and valuables to a safe place such as your bank or an internal safe;
- Notify your local police of your absence.
Management & Staff at AUSTRALIAN REAL ESTATE wish you & your family
A VERY MERRY CHRISTMAS & A SAFE & HAPPY NEW YEAR
Our offices will CLOSE on the 6pm Monday 21st December 2009
& will re– open 9am Monday 4th January 2010
- Skye Avern