- Comes as interest rates are expected to increase tomorrow
- Although prices have declined, affordability remains a concern
- The NSW government received close to $1 billion in stamp duty in July alone, figures show
With interest rates expected to rise again tomorrow, what is going to happen to the property market in Sydney this month?
The Reserve Bank (RBA) is poised to lift the cash rate again tomorrow for the fifth consecutive month. This is despite just a year ago the central bank was adamant the cash rate wouldn’t rise from the record-low level of 0.1% until 2024.
Now, the cash rate is 1.85%, and is expected to rise by 50 basis points tomorrow.
“There remains a desire among consumers for greater certainty around the current rate rise cycle,” said Tim McKibbin, the Real Estate Institute of New South Wales (REINSW) CEO.
After peaking at around $1.7 million earlier this year, asking house prices have been on the decline, according to SQM Research.
Sydney
Stock listings have also been on the rise, however, are still lower than the series peak seen in 2018.
Sydney
Although house prices have declined by in Sydney during the past few months, this hasn’t benefitted first home buyers. Australian Bureau of Statistics (ABS) data released last week showed that buyer activity among first home buyers have declined, with interest rates to blame.
“The various first home buyer schemes and incentives do not appear to be stacking up against the impact of lower borrowing limits and higher repayment costs,” added Mr McKibbin.
“This turns attention back to the part of the solution with the most obvious potential to improve affordability: supply.”
Mr McKibbin, however, has noted that elsewhere in the market, actual transactions activity appears to be contrasting the doom and gloom headline reported by the media.
“Revenue NSW figures show there were over 19,000 transactions in July, from which the NSW Government collected over $981 million in stamp duty,” he said.
“The number of transactions was slightly down on the July 2021 figure and slightly above the July 2020 figure.”
In terms of the short term, Mr McKibbin said REINSW members have reported a similar number of genuine and prepared buyers in the market now compared to the same time next year.
“The buyer frenzy has obviously calmed, but the prices vendors are receiving are typically still well above pre-COVID levels,” he said.
“Should rates go up again as seems likely, it will be more of the same in the weeks ahead: strong deals still getting done, accompanied by select commentators declaring a catastrophe.”
