16 Dec Sydney sees largest price growth since 1988

A headline no one expected 6 months ago.
The headlines we were used to seeing were ‘Property Prices are going to drop by 30%’.

Where are those commentators now?

The Stats
Sydney dwelling prices increased by 2.7% and Melbourne increased by 2.2% between October and November. The largest price gain in one single month since 1988. This also means that the annual growth rate for Sydney and Melbourne are back into positive territory and any loses this year have now been recovered.

Why is this happening?
The RBA has reduced the cash rate 3 times this year, even though banks haven’t passed on the full 0.75% savings, our mortgage repayments are lower. There is also an indication that the cash rate can drop even further.

Negative Gearing is here to stay. Until May, everyone was talking about whether negative gearing will remain or will be abolished for existing properties by the Labor government. As we know, it’s here to stay and we now have certainty around our tax benefits.

Easing of credit and removal of serviceability requirements now allow the banks to lend more money to us. This means we have access to more credit, which means we can offer more for properties, that’s if you find a property on the market.

Advertised stock levels are persistently low, they are at their lowest levels since 2007. This means no one is in a hurry to sell their property, and we now have keen buyers ready buy, which is causing a sense of urgency in the market.

Will it continue into 2020?
The market will certainly be tested in the first quarter of 2020. I believe there will be more stock coming onto the market as vendors see what is happening in the market now, they will expect to see the same results in the new year.

My personal opinion is the market will continue to steadily climb month on month, but at much lower levels than we saw in November.

“No man was ever wise by chance.” – Lucius Annaeus Seneca

Thank you for reading