Property Market Update Lower North Shore
BALMORAL 40 Plunkett Road Contact Kingsley Yates 0411 875 017
Property Market Update Lower North Shore
October 2012
National News moment. At the height of GFC in 2008 when unemployment was rising, commercial property tanked and consumer spending limped along, an extraordinary, counterintuitive thing happened. The non-premium residential property sector, in response to the emergency cash rate setting at 3%, quickly came to the boil. According to ABS numbers, in that calendar year of 2008 This year spring is very different and Sydney house prices rose by 14%. emerging early spring buyer confidence is hard to miss. It has been observed by APM The correlation between a low cash rate, that Sydney´s auction clearance rate of 63% easing monetary policy stance and house on the October long weekend is the sixth price growth - whatever the economic weekend clearance rate recorded above backdrop - is clear as crystal. It´s simply 60% in the past 7 weeks. This compared to cause and effect. What is extraordinary, is the same time last year when the rate hardly that we again have near emergency lending broke 50%. These stronger auction results rates even though the economy is running occurred despite there being between 5 at trend growth, employment is near full and and 10% more properties being offered. stable, inflation is under control and consumer spending, whilst insipid, is stable. To understand this change let´s rewind for a The fact that we now have 3 year fixed rates Comparing spring seasons year on year provides a happy contrast. Reflecting for a moment, last year the spring selling season ran out of puff before it even got going. The unemployment rate rose in all state capitals as the big end of town shed staff numbers to compound an already jittery market place concerned about global events.
below 5.5% and standard variable rates at well below 6% also almost speak for themselves. Lower interest rates mobilise cash out of savings and at the same time get more people borrowing and at greater amounts. Recently, ABS lending commitments figures show that owner-occupied mortgages, where the deposit is less than 10%, have risen in the last year from 11% to 17%. The pace of this growth will now accelerate. Our word of caution is that low rates don´t drive the marketplace equally. Whilst lower to middle income demographics will often use extra borrowing power to fund larger property and household purchases more affluent areas are, often but not always, likely to favour capital expenditure and other business investment.
Director's Desk regular Those readers of this m o n t h l y communication will recall that right throughout the last 2 years we have consistently espoused the virtue of investment property as the most desirable store of wealth and generator of returns. Especially in uncertain times. Over those years, investors have been
Lower North Shore
rewarded with year on year yield increases of 8% per annum - albeit with lack lustre capital growth. It is clear, that the immediate future holds a picture negative of this scenario.
Of course, one doesn´t have to wait for newsletters to receive the best advice, our Portfolio Managers are always on hand, happy to serve.
The ongoing environment over the next 12 months will be characterised by outperforming capital gains combined with a rental marketplace where tenants may begin to assert more negotiating power. Either way, investors who have acted on our well considered advice will continue to be rewarded handsomely with enviable returns.
RWLNS.com
Peter Matthews - Managing Director
[email protected]
9953 7333
Property Management News
Leasing Summary
Lower North Shore
September 2012
The realm of property management and investment continues to deliver a combination of mixed news. According to the REINSW whilst overall Sydney vacancy rates are the most favourable for renters since January 2006, the vacancy rates for inner city suburbs tightened slightly from 2% to 1.8%. The experience on the ground however, is that the market is reasonably evenly balanced between renters and landlords. Vacant properties will need to be presented optimally and priced scientifically.
The last month has again been very busy for leasing at Ray White Lower North Shore.
Adding to the developing dynamic of the market is that on one hand first home buyers (renters) are mobilising into the property market yet, overall, Sydney has persistent supply pressures. At present, it is estimated that Sydney builders complete only half of the dwellings required. Whilst the target set by the previous government for the first quarter this year was 5825 new dwellings the actual number was closer to 3000. A market that favours neither renters or landlords is likely to persist.
• 51 properties leased • Rental range $360 - $3500pw • Rents reviewed for this period - 79 • Increases in rent for this period - 46 • Average vacancy rate 0.50% Ray White Lower North Shore's Portfolio Managers and Leasing Consultants work hard to maximise our landlord's returns on their investments. For more information, please contact Nic Yates on (02) 9953 7333.
For Sale - Feature Sale Properties
CREMORNE 4/57 Grasmere Road Auction 1 Nov
2 bed 1 bath 1 car
Contact Sharon Cooper 0415 976 169
NEUTRAL BAY 1/168 Kurraba Road For Sale $980,000
3 bed 1 bath 1 car
Contact Yvonne Takis 0418 686 993
WAVERTON 54 Bay Road Auction 3 Nov
3+ bed 2 bath 2 car
Contact Robert Holmes 0400 323 828
MOSMAN 61 Parriwi Road Expressions of Interest
5 bed 2 bath 2 car
Contact Shane Slater 0414 312 013
Property Market Update Lower North Shore
October 2012
National News moment. At the height of GFC in 2008 when unemployment was rising, commercial property tanked and consumer spending limped along, an extraordinary, counterintuitive thing happened. The non-premium residential property sector, in response to the emergency cash rate setting at 3%, quickly came to the boil. According to ABS numbers, in that calendar year of 2008 This year spring is very different and Sydney house prices rose by 14%. emerging early spring buyer confidence is hard to miss. It has been observed by APM The correlation between a low cash rate, that Sydney´s auction clearance rate of 63% easing monetary policy stance and house on the October long weekend is the sixth price growth - whatever the economic weekend clearance rate recorded above backdrop - is clear as crystal. It´s simply 60% in the past 7 weeks. This compared to cause and effect. What is extraordinary, is the same time last year when the rate hardly that we again have near emergency lending broke 50%. These stronger auction results rates even though the economy is running occurred despite there being between 5 at trend growth, employment is near full and and 10% more properties being offered. stable, inflation is under control and consumer spending, whilst insipid, is stable. To understand this change let´s rewind for a The fact that we now have 3 year fixed rates Comparing spring seasons year on year provides a happy contrast. Reflecting for a moment, last year the spring selling season ran out of puff before it even got going. The unemployment rate rose in all state capitals as the big end of town shed staff numbers to compound an already jittery market place concerned about global events.
below 5.5% and standard variable rates at well below 6% also almost speak for themselves. Lower interest rates mobilise cash out of savings and at the same time get more people borrowing and at greater amounts. Recently, ABS lending commitments figures show that owner-occupied mortgages, where the deposit is less than 10%, have risen in the last year from 11% to 17%. The pace of this growth will now accelerate. Our word of caution is that low rates don´t drive the marketplace equally. Whilst lower to middle income demographics will often use extra borrowing power to fund larger property and household purchases more affluent areas are, often but not always, likely to favour capital expenditure and other business investment.
Director's Desk regular Those readers of this m o n t h l y communication will recall that right throughout the last 2 years we have consistently espoused the virtue of investment property as the most desirable store of wealth and generator of returns. Especially in uncertain times. Over those years, investors have been
Lower North Shore
rewarded with year on year yield increases of 8% per annum - albeit with lack lustre capital growth. It is clear, that the immediate future holds a picture negative of this scenario.
Of course, one doesn´t have to wait for newsletters to receive the best advice, our Portfolio Managers are always on hand, happy to serve.
The ongoing environment over the next 12 months will be characterised by outperforming capital gains combined with a rental marketplace where tenants may begin to assert more negotiating power. Either way, investors who have acted on our well considered advice will continue to be rewarded handsomely with enviable returns.
RWLNS.com
Peter Matthews - Managing Director
[email protected]
9953 7333
Property Management News
Leasing Summary
Lower North Shore
September 2012
The realm of property management and investment continues to deliver a combination of mixed news. According to the REINSW whilst overall Sydney vacancy rates are the most favourable for renters since January 2006, the vacancy rates for inner city suburbs tightened slightly from 2% to 1.8%. The experience on the ground however, is that the market is reasonably evenly balanced between renters and landlords. Vacant properties will need to be presented optimally and priced scientifically.
The last month has again been very busy for leasing at Ray White Lower North Shore.
Adding to the developing dynamic of the market is that on one hand first home buyers (renters) are mobilising into the property market yet, overall, Sydney has persistent supply pressures. At present, it is estimated that Sydney builders complete only half of the dwellings required. Whilst the target set by the previous government for the first quarter this year was 5825 new dwellings the actual number was closer to 3000. A market that favours neither renters or landlords is likely to persist.
• 51 properties leased • Rental range $360 - $3500pw • Rents reviewed for this period - 79 • Increases in rent for this period - 46 • Average vacancy rate 0.50% Ray White Lower North Shore's Portfolio Managers and Leasing Consultants work hard to maximise our landlord's returns on their investments. For more information, please contact Nic Yates on (02) 9953 7333.
For Sale - Feature Sale Properties
CREMORNE 4/57 Grasmere Road Auction 1 Nov
2 bed 1 bath 1 car
Contact Sharon Cooper 0415 976 169
NEUTRAL BAY 1/168 Kurraba Road For Sale $980,000
3 bed 1 bath 1 car
Contact Yvonne Takis 0418 686 993
WAVERTON 54 Bay Road Auction 3 Nov
3+ bed 2 bath 2 car
Contact Robert Holmes 0400 323 828
MOSMAN 61 Parriwi Road Expressions of Interest
5 bed 2 bath 2 car
Contact Shane Slater 0414 312 013
