The northern beaches is either at or has passed the low point in its property price cycle, according to experts, and the next move is up, especially if interest rates are cut which is now widely tipped to be within months.
The northern beaches property market is on the brink of taking off again, according to industry experts, with the worse of the property slump behind it.
Interest rates were kept on hold this week but industry experts expect a cut to the official cash rate within a couple of months and maybe more than one cut by the year's end.
On the northern beaches any cut is expected to fuel the fire of prices as agents say the peninsula is at or beyond the bottom of the market.
Property buyer Peter Kelaher, who works extensively on the northern beaches, said as the RBA didn't cut rates on Tuesday they will cut the official cash rate once or twice before the end of the year.
“Banks have reported heavy losses to shareholders and they will start to loosen up their purse strings. I called the bottom of the market four to six weeks ago and we will now see the slow progress of stabilisation then a slow rise in the market starting from the lower end,” he said.
Mr Kelaher said once rates were cut buyers at the more affordable end of the market could borrow more and would have more confidence to buy. That would in turn feed the middle and top ends of the market and the up cycle would take off.
“The market will enter its cycle upphase in three to six months then it stay upwards for four years,” he said.
Investors are already circling looking for good properties before negative gearing changes in January, is Labor is elected later this month, he added.
Michael Lipman, of Upstate, said the 20 agents in the Dee Why based office all noticed that buyer numbers, activity and inquiry numbers all increased in the last three to four weeks on the northern beaches.
He had a strong auction in Collaroy Plateau on Saturday selling a three-bedroom house at 20 David Rd for $220,000 over its guide to buyers who intend to knock down the house and build their dream home.
“We had 62 groups inspect the property, eight people registered at auction and it has been bought as a knockdown. We have reached the bottom of the market and are on our way up slowly,” he said.
“If interest rates are cut it will spur on buyers with another ten per cent,” he said.
Steve Thomas, of Belle Property, who is across the entire northern beaches market, wasn't surprised the interest rates were held this month saying he believed the RBA wanted to give themselves some room but once interest rates were cut it would throw fuel on the fire of property prices.
“What we are hearing in the northern beaches is that if the market hasn't hit the bottom yet it is close,” he said.
“People are seeing value and they are out looking, I think investors are sniffing out deals as well.
“If we look at the northern beaches we are insulated,” he said.
“We are not carried by investors properties but have a high number of owner occupiers who don't sell unless they have to.
“We might see some sideways movement but no more price drops,” he said.
Agents up and down the northern beaches have reported some of the highest numbers of buyers at open houses this week with one entry-level house attracting 83 people to its open house. Several properties that have been on the market for months sold this week and agents have reported that investors are back looking for rentable property.
Neridah Conisbee, REA group economist, said it was surprising that the RBA kept rates on hold this month however a cut was now expected before July this year.
“The big issue continues to be the very low rate of inflation. Over the past 12 months, inflation was 1.3%, substantially below the RBA inflation target of between 2% and 3%. Over the quarter, inflation was a dismal 0%. While this was tipped to be enough to change the mind of the RBA, it is likely that the decent jobs growth numbers held them back. The upcoming Federal election may have also been a factor however a move is not without precedent. They have previously moved rates in both 2007 (increase) and 2013 (cut).
A cut would have been positive for consumer sentiment and housing markets. It is likely that the banks would have also passed on a rate cut in full, particularly given the negative sentiment towards them following the Financial Services Royal Commission.”
**Source: Kathryn Welling, The Manly Daily
If you're looking to buy on the Northern Beaches, contact your Northern Beaches Buyer's Agents today on 02 9960 1066 or enquiries@pkproperty.com.au.