- Auction volume levels remain healthy across NSW
- Property prices continue to increase
- Circuit-breaker most likely to be reform in the property arena
“Winter has arrived but it shouldn’t dampen buyer’s enthusiasm in the lead up to the June long weekend,” says Tim McKibbin, CEO of the Real Estate Institute of New South Wales (REINSW).
Mr McKibbin’s remarks come as volumes levels remain “healthy” across NSW, although he argues, nevertheless, there is still an undersupply of property.
“As we’ve seen in the May figures, house price growth continues to march forward. Vendors can feel a degree of comfort but this is balanced by growing concerns about the lack of availability of homes for some people, especially those on lower incomes.
“Current conditions will continue to advantage some and disadvantage others until there’s some kind of circuit-breaker.”
Tim McKibbin, REINSW CEO
Mr McKibbin added that changes in interest rates will not be the circuit-breaker – last week the RBA met and reaffirmed its plan to keep the cash rate at a historically low level for the next few years.
“This month will see the end of the cheap finance scheme implemented to soften the impact of COVID-19 for the banks and already lenders are raising their rates. But even if fixed rates are adjusted slightly upwards, the cost of finance will remain relatively low for the foreseeable future,” added Mr McKibbin.
In terms of a ‘circuit-breaker’ to the current conditions in the market, Mr McKibbin argues tax reform is the most logical, along with reviewing development approval processes.
“We need our political leaders to work with industry to take a new look at increasing supply.
“Done well, in consultation with industry, these types of reform can have the effect of helping more people access and afford accommodation without jeopardising the position of those who own or are paying off their home.”
Mr McKibbin has previously called for reform such as changes to stamp duty – which, in the year to February 2021, provided a windfall of $6.2 billion to the NSW Government.
In conclusion, he has highlighted the dramatic change in circumstances witnessed by the local property market over the past year.
“The end of the financial year is fast approaching and at least from a housing perspective, there have been few more striking examples of the difference a year can make.”
“From a low base in need of recovery, to an unprecedented boom, then easing to more a more sustainable growth pattern, the last 12 months have been very eventful.”
