PK's Sydney Property Market Update July 2023
Market holding up well despite rate rises
Well, yet another rate rise but Sydney auction clearance rates this week still managing to perform very well at 74%.
As we all know stock levels are down dramatically, and that's one of the reasons why prices are holding up and clearance rates are high. The month of July, which includes a very long school holiday period, is always a month that delivers inaccurate figures for property in general, so lets wait for a full selling period in August to see what is really going on.
Another reason why the property market is still good is that unemployment is so low, and that is enabling people to feel secure in their job, therefore they also feel secure in taking on more debt, or enter into a mortgage rather than renting.
At PK Property we are presently coming across a lot of what we call debt down graders, not downsizers which are normally in their sixties to eighties in age. These debt down graders are people that are saying we are going to sell at a higher price, and buy at a relatively lower price, so our mortgage is smaller amongst this higher interest rate environment, or extinguish the mortgage completely.
I am finding people are chasing more of a lifestyle lately and wanting to get rid of debt as it is just so expensive at present.
A lot of investors are choosing the easy route of putting their cash in the bank at 4.5% return at present, but while we still have negative gearing and depreciation available to us it's something that has to be weighed up against having cash in the bank.
PK's Property Market Predictions
I think a lot of buyers will spill over to the spring selling period because they haven't been able to find a property in Winter, and that's what will keep the market bubbling along when the spring stock arrives. Yes, Spring will deliver a lot more stock, but it also produces a lot more buyer's, so I am predicting from now till the end of the year should be steady as she goes.
PK's Hot Property Tips
Well, another interest rate rise from Governor Lowe is probably not a surprise, but definitely, a LOWE blow from Mr. No rate rises himself till 2024. Don't worry he will be gone by September this year, and another spring clean will be Alan Joyce.
Ok now I have cleaned up a couple of things, I think we all know what is driving this property market at present, and that is low unemployment which is making people feel very secure in their jobs, therefore they feel confident in taking on debt.
And number two there is simply no stock to fulfill the demand out there at present because people refuse to enter that brutal rental market. I think the market will start to chill out a bit come spring, a bit more stock to choose from, and unfortunately a couple more interest rate rises. Till next month everyone happy house hunting.