- A slight decline in housing activity has been recorded in Sydney
- REINSW CEO says this isn't a correction
- Typically in the lead up to federal elections, housing activity wanes
Following unprecedented growth last year, a very slight decline in activity across the Sydney market has been recorded.
Recently released CoreLogic data shows prices declining in Sydney and Melbourne, with SQM Research data also showing a lower growth – and decling – rate in asking house price growth.
“Prices may have eased but demand remains strong,” he said.
“Apartments are proving a challenge for agents where vendor expectations are not aligned with the stabilisation we’re seeing.
However, Mr McKibbin noted that houses, on the other hand, remained hot property. Overall, houses are fetching high prices.
“Assuming rates remain unchanged for a little while longer, the stability in prices we’re seeing is perhaps best interpreted as the sign of a healthy real estate market, where there’s value on offer on both the buyer and vendor side.”
Tim McKibbin, REINSW
“The Reserve Bank meets again tomorrow, which will re-ignite the rate-rise guessing game. While a lift in the official cash rate appears to be a matter of time, there’s a case to be made for the hold pattern to continue as uncertainties, not just domestically but internationally, play out.”
Elephant in the room
While Mr McKibbin addressed many buyers and investors are expecting monetary policy changes this year, a grey area is fiscal policy and in particular the upcoming election – which Prime Minister Scott Morrison is yet to call.
Given Labor’s proposed changes to negative gearing was a major factor in their loss during the 2019 election, many are likely awaiting to see what both sides promise.
“Typically, transactional activity leading into an election slows down,” added Mr McKibbin.
“There’s no real rhyme or reason for this and for vendors, the looming trip to the ballot box need not be a reason to delay any plans to sell.”
“This stabilisation trend appears set to continue with purchasers keeping an eye on interest rates and pondering the implications of some of the strategies the Government and Opposition have tabled ahead of the election.
“First home buyers in particular have been the subject of recently announced policies and have much to weigh up.”