All the signs show that the housing market in Sydney and Melbourne is having a stellar return to form. Prices have jumped a remarkable 1.6% in August and buyer confidence has returned. This sentiment is yet to move north as currently, I am getting more client calls about Vendor Advocacy rather than my Buyer Agency service. This could change as the temperature, and the market warms up. But if I am using my own experience as a guide, we are still in more of a buyers market than a seller’s market here.
It will be interesting to see if there is a splurge of new listings for spring. There is usually a bump in new listings around September. If we see only a small rise in activity, coupled with an increase in buyers, then we could see a firm increase in prices. This should take us back to the prices that were being seen in late 2017 and early 2018.
Price Drop Stops
A recent CoreLogic data report shows that national dwelling values appear strong again, following a consistent downward trend earlier in the year. Auction clearance rates have been holding above 70 per cent through most of July across Sydney and Melbourne.
NAB economists noted that mortgage rates are currently at levels not seen since the 1950s, which is encouraging some buyers. Likewise, loosening of credit and less onerous compliance reporting about living costs is allowing borrowers greater access to funds.
The CoreLogic data reports a national median downturn averaging around 8 per cent, with more falls in expensive markets in the major cities. This bodes well for Byron 2481, which has only seen a drop of 6.1 per cent. The drop is more like 8-10 per cent in the outer postcodes. Nationally, volumes have also been down with a 30 per cent drop in turnover since the 2016 peak.
If there are lots of new listings in our region, and buyer interest remains lukewarm, we may see price reductions, not increases. We are usually 12-18 months behind the Sydney/Melbourne trend line. If that trend remains intact, then we could see more price softness.
Byron is out on its own
Personally, I think the Byron and hinterland market has de-coupled from this trend of following the southern cities as we react to different demographic shifts. There are now two major buyer groups moving to areas such as Byron. The familiar cohort of baby boomer retirees now competes with younger mobile couples and families who are able to find local employment or work online.
If you spend any time at our local airports, you will see IT workers, creatives and digital entrepreneurs commuting to not just Sydney or Melbourne, but also Singapore, Hong Kong or West Coast USA. Byron Shire has become a popular base as this sector of the market looks for a more relaxed, laid back home life while still plugged into a global network of business and finance.
Couple this with our local aversion to approving any new housing stock and the local market cannot help but remain firm.