Property Market Just Humming Along
Well talk of more interest rate rises everyone, but I don't know if I am in the upward camp, I am more in the camp of steady as she goes and then maybe a drop at the end of this year, worst case February 2025.
The present government can only hope that they get a drop in rates in November this year, and then don't be surprised everyone that they then pull a December 2024 election.
If there is no drop in rates this year, the only real time they can go is May 2025. They have to be seen as a government that is responsible with money, and fiscal policy in general.
At the moment these high interest rates, high inflation and cost of living are killing the economy, with retail growth figures coming out this week being the worst on record.
What's interesting at the moment is that the Minns Government in NSW is talking of zoning changes to increase housing. Sure this will help, but with interest rates at an all time high, building costs also at an all time high, plus massive labour shortages in the building industry this is going to be one very slow burn getting these housing numbers up Mr Minns.
Please also understand everyone that when developers are building these high rises near the railway stations they don't just buy the properties outright, they take what's called an option with the vendors which is usually 1 percent of the properties agreed price for two years. They then have those vendors locked up for two years, meaning they can't sell to anyone else. If the developer pulls out in that period the vendors get to keep the 1 percent deposit.
In most cases, the developer is putting their DA through in that two year period to see what they can get on the site, and most of all to see if they can get finance. So, it's really a 5 year period before something is ready for people to move in.
PK'S Sydney property market predictions
I think winter will stop a huge amount of stock coming on, and with these high interest rates and living costs, I think the good stock will be on fire, but everything else will just Hum along.
PK'S Hot Property tips
Don't wait till Spring to buy something, if you see a good property now, jump on it.
As soon as that first interest rate happens the market will fly for a good two years, so buy now and capitalise on the capital growth moving forward.