A spring in the step of Sydney property listings, auctions
Regular columnist and Real Estate Institute of New South Wales Chief Executive Officer, Tim McKibbin, says indicators show a slight increase in investor buying activity but levels are not what they were pre-pandemic.
In recent weeks, as anticipated, property listings have started to trend upwards. The spring effect.
The volume of auctions held in Sydney each week has been steadily increasing. Total advertised stock has risen to above average levels. Clearance rates are stable though not spectacular, buyer demand remains reasonably strong though FOMO is no longer a driving factor, and all in all current conditions suggest we are moving back to a more seasonal market.
This is all unsurprising following the unprecedented COVID boom.
Obviously, prices are coming off. CoreLogic’s national Home Value Index showed a fourth consecutive month of price declines in August, with Sydney down 2.3% for the month.
But whether the market is booming or bottoming, people’s need for housing remains. Agents are in the industry of everyday life and people will always need a roof over their head. When you’re buying and selling in the same market, price variations are less influential anyway.
Among investors, activity is generally subdued. Recent indicators show a slight increase in investor buying activity but levels are not what they were pre-pandemic.
Seasonal shift
Spring may change things.
The endgame for the current rate rise cycle remains an unknown but many believe the month-on-month increases will soon settle, allowing the upward shifts to date to have their full impact. Combine this with more choice and it may entice some investors off the fence.
Landlords are in the media crosshairs at the moment. Unfairly so. No-one denies the challenges facing tenants, including those wanting to make the transition to become first-home buyers.
Vacancies are extremely tight and rent rises are a natural consequence. But the assumption that landlords are greedy and super wealthy is misplaced. It is not a mutually exclusive prospect.
There is altogether way too much politics in the rental market at the moment. It becomes apparent when you consider that, at a time when rents are high and rising, many landlords are actually exiting the market. Obviously, there are more factors at play – factors conveniently forgotten by the 24-hour news cycle and purposefully ignored by politicians seeking headlines.
Who wins?
Many investors are still reeling from the moratorium on rents placed on them coinciding with lockdowns. Their repayment obligations still had to be met. If rising rents was all it took to comfort investors, we wouldn’t be seeing what we’re seeing.
Property can be a great investment but it can also be an arduous one. A point that has been made many times is worth reinforcing: more than 80% of investors own only one investment property. They depend on it for income. These are mums and dads whose livelihoods are at stake.
Dampened values coupled with higher repayment costs might make these mums and dads consider alternate, less stressful avenues to in which to invest.
And the biggest losers in this scenario are tenants.
