A Realist Look at the Sydney Market

Sydney Housing market

House prices also finished the year off with slight gains for the quarter in Sydney, Australian Bureau of Statistics (ABS) data shows. This was a more positive result than expected.

And on top of this, our reading for total stock levels has now fallen for the past four months. Still, stock levels are 20 per cent higher from levels recorded this time last year.

All this suggests the Sydney market is in a state of equilibrium. Neither buyers or sellers control the market. And that means both parties need to have their expectations close to the market if they want to achieve a transaction.

Nevertheless, it is outperforming most other capital cities, which are very much buyers' markets at this point.

So why is Sydney holding so well compared with the rest of the country?

For starters, Sydney's annual population growth rate has increased. According to the ABS, the growth rate is now 1.7 per cent, which is up from the levels recorded in the early noughties of just 1 per cent, and equates to an extra 2300 people living in Sydney each week.

And these people are finding jobs. Sydney's unemployment rate of 4.5 per cent is way below the national average of 5.0 per cent, says the ABS. That, together with a recovering financial sector, has meant people have money to spend on housing. Unfortunately, they are struggling to find new homes.

Once again from the ABS, the dwelling construction series suggests Sydney is building fewer homes now than it did in the early 1980s. Just an estimated 450 new dwellings are added to the market each week.

So an extra 2300 people living here each week, yet only 450 dwellings being built for them. Little wonder Sydney rental vacancy rates are at near record lows.

Sydney affordability is bad (as measured by the Housing Industry Association), but it is not at the critical levels it reached in 2003. That is because house prices in Sydney remained stagnant to falling for a period of five years. Over that time, wages expanded, making it now slightly easier to buy a home in the Sydney market.

Of course it is still very tough and housing is very expensive. However the reality is the Sydney market has been in a worse state of affairs before.

This doesn't mean it is impossible for Sydney house prices to fall. It has happened before and will again at some point.

However, so long as the economy holds and interest rates do not go radically higher, it is likely Sydney will hold firm in 2011, and so far, the early indications back this view.  

By, Louis Christopher is the managing director of SQM Research.

Lindfield New Home or Mona Vale Townhouse?

New Listing in Lindfield

104 Highfield Road, Lindfield which is a brand new home on a recently subdivided corner block, will be on the market for the first time this Saturday.  An 11 December auction is scheduled.  The home has been well designed for space, light and privacy and falls in the Killara High School Zone.  This makes the location a popular choice for families (4 brs) needing a high quality low maintenance lifestyle in a position with easy access to both schools, city and universities. (Macquarie & Macquarie Park are a stones throw away while the UTS campus at Lindfield is even closer).

 

or choose Mona Vale on the cusp of Bayview : beautiful spacious townhome with a touch of class, inspect Saturday or Sunday 12.30 - 1.15, 1,155-157 Darley Street West, overlooking Bayview golf course and minutes from beach or shops.

Meanwhile in Newport …

What a surprise to see the streets of Newport transformed for the annual market day.  Rock bands were throbbing on the seaside park, musicians strummed their trade in the newly refurbished arcade of restaurants and on the corners of the street.  The parking area behind the Barrenjoey shopping strip was an amusement arcade with extraordinary performers turning themselves inside out to the huge appreciation of the crowds.  Children thronged the water slide and amusements near the beach.  If you missed it this year, keep and keen eye out for next November or visit the next beach side suburb to take it’s turn at this massive pre-Christmas event.

The Surf Life Saving Club at Newport focused on art and photography with the fundraiser of historic photos finishing its display.  Now I can let the secret out, I won the raffle and have collected a second historic photo of the area to hang in my new home!  With plans now approved by Council I am now trying to decide how to build this simple beach side home designed by Sean Gartner, without breaking the bank!

From KILLARA to NEWPORT, our goals for our children are shared

Avalon is offering family swimming sessions on Saturdays while in Killara the Marion St Theatre for Young People is at last back in it’s rightful place in the theatre in Marion St.  The current season of Cinderella runs Saturdays only now until 27 November.  Get on line to enrol for 16 week  (2 semesters a year)  classes 5 – 12 year olds  www.mstyp.org.au  or older kids who get the opportunity to present pantomimes such as this one written by Children’s Theatre stalwart Helen Martin.

The aim is to build basic confidence and enhanced performance style.

This weekend (November 6 & 7) 10am – 4pm visit Robin Cale Clubrooms, Newport Surf Life Saving Club, Barrenjoey Rd, Newport Beach and pick up a limited edition print  from Cale’s Newport photos 1930 – 1950.  All proceeds go to Newport Surf Life Saving Club.

It was fun to see a surfer this morning leaving the surf at 7.15 am and showering off at the viewing platform in the car park before putting on his school uniform (Narrabeen Sports High), handing his board to his dad, and jumping on the school bus.  Now that’s the way to have a great day!

Remember this?

Max du Pain: "At Newport" 1952

Moving right along...

It’s been 10 months now since I started maneuvering between North Shore and the Northern Beaches and the most apparent observation is that the two areas are strongly linked. Many North Shore people have happy memories of long summer holidays spent in the family beach house. Yet now both Mona Vale Road and Wakehurst Parkway bring the areas only half an hour apart. There is an even stronger sense of community in each of the beachside suburbs than there is up the Northshore line. Perhaps it has something to do with the home club and colours blazoned across the backsides of our little nippers and our surf life savers.

 The flags our out for summer now and the fearless locals can be seen stroking out across the bay. A few weeks ago they would have been dodging whale spouts, so easily viewed from each headland lookout. The boardwalk between Newport and Bilgola beaches is perfect for whale watching or just minding the views. Steps up to the Serpentine link the North end of Bilgola to Avalon. Oceans of public park at Palm Beach give out to the walk up to the lighthouse – with congo lines of back-packers the day I walked it! Still one could tour the beaches restaurants for months without having to visit the same one twice – unless you get particularly stuck on say the mussels at Beaches or the sourdough at the Bluemoon bakery or breakfast at Cocos or Italian at Lucky’s & Pep’s.


While the Northshore is worrying about the proliferation of high rise developments, the beaches are fighting the introduction of Woolies to Newport. They have a point – Coles has only just opened and serves the community well whereas Mona Vale, the gateway from the Northshore has what is billed as “Woolworths largest store”. With a well stocked Dan Murphys right beside it, it is well patronised. My favourite however is Thomas Dux the Grocer (right opposite Mona Vale library), big enough to display hand picked product easily but small enough to offer a regular number of free promotional tastings to limbo up the tastebuds before you choose dinner!

INVESTORS SHOULD NOT BE CAUGHT CHASING AN ESCALATING MARKET,

Mark Armstrong sagely comments

“The Sydney property market’s median price is set to double in the next 10 years, recent reports suggest, and while that appears to be good news for investors who are already in the market, it is a concern for those still trying to get a foothold.

As the property market continues to grow it is important investors understand how to value property to increase their chance of success.

Many people value property based on what they think it is worth. However, the value of property is determined purely by what the market is prepared to pay.

To get a clear understanding of the market, it is not only essential to know what similar properties in a particular area have been selling for but also how many under-bidders there were and at what level they stopped competing.

The buyers who missed out on the last property will be your competitors for the next one and will drive price growth

Let’s look at an example of investors who find their perfect property. They have not been looking for long and have no idea what the market value for long and have no idea what the market value for the property is. They base the value on what they think is a fair price. The property is due to be auctioned and they wisely decide on an upper limit before the auction, in this case $600,000.

As the auction progresses they soon realise they are others who are prepared to pay more than them and the property sells for $610,000.

A couple of months and countless inspections go by before they find another comparable property. They reason that because the last one sold for $610,000, this one will be worth the same. However, they fail to understand this sale is now a couple of months old and the market has moved on. Once again they fail to secure the property as this time it sells for $620,000.

These investors are now falling into the trap of chasing the market. They are basing their purchase price limit on what happened in the past and in a growing market they will continually miss out.

While it is never a good idea to overpay for property, always being under the market can result in significant opportunity costs.

The Sydney market showed double-digit growth last year and I expect that trend will continue for the next 12 months to two years as more investors return.

When investors compete in this kind of market, the longer it takes you to get in, the more it will cost you. 

Source: Sunday, March 28, 2000 Domain (The Sun Herald)

Seniors Week

This week highlights seniors and many activities have been organised by Council and the Uniting Church covering a broad spectrum.  Today, Friday 5 March is a Gala concert at the Turramurra Uniting Church and afterwards an introduction to Meals on Wheels.  It is not surprising to see the name of powerhouse Rosalie Ramsay associated with helping organise events!  She does a wonderful job in supporting the local community.  Not to be missed in Senior's Week is the computer day being held on Monday 15 March 10am - 12.30 pm at the East Lindfield Community Hall, 9 Wellington Road.  Enquiries: Ivon Rock 9416 7826.  Just down from the PRDnationwide office in Lindfield is the Lindfield library and next to it at 259 Pacific Highway is the Seniors Centre.  They have an introduction to Tai-Chi presented by life Balance on Friday 26 March 11.15 - 12 pm.  As a keen Tai Chi practitioner I will definitely drop in to see what's happening! 
Book through Kuringgai Council 9424 0000.