Sales Market Review
Monday, December 22, 2008
Our final report for 2008 caps off a year of uncertainty which has seen the share market shed 50% of its value and world economies hit hard. Our local property market also suffered with a decline in values over the year, although the rental market remained particularly strong. It has simply been an extraordinary run of events, capturing world economies in the updraft, and where and when we land remains unforeseeable. One thing that does appear clear is that most people are bracing for a difficult economic climate in 2009.
The last quarter of 2008 was one to forget in the property industry as the financial crisis deepened and a swathe of poor results were posted. For instance, in our area there were 29 transactions in the month with an average sale price of $708,000 compared to the same period in 2007 when there were 96 transactions at an average sale price of $1.13m. The market split at $1m with properties below this mark selling relatively well and anything above this point finding it difficult to generate strong interest.
However, in our view every cloud has a silver lining, with improved housing affordability for middle to upper end properties being one major upside. Falling interest rates and fuel costs and softening house prices provide a great opportunity to upgrade your home. It appears many may be thinking along these lines in 2009 with the Australian Bureau of Statistics confirming home loan approvals increased above predictions in the last quarter of 2008.
Moving into the New Year cycle a number of unknowns remain. Will reducing interest rates and falling fuel costs stimulate market activity? Will an uncertain job market and the threat of a recession prevent spending? Here is what we do know. There is currently plenty of unsold property on the market – 96 in Balmain and 76 in Rozelle. Of these, 74 are listed for sale above $1m. In the past two months the auction clearance rate in our zone was just 32%.
We believe transactions will improve next year, however while job security and smaller revenues for many businesses remain, it will crimp any significant recovery in the property market. Pricing property correctly will remain a priority in order to achieve a sale and buyers will remain cautious yet have reason to be optimistic about securing a property in a blue chip location.
That’s it for 2008. We wish you and your family a safe and happy festive season and we look forward to being of service in 2009.
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