The South Eastern sales market continues to show strong results however there is a definite shift with buyers. The recent interest rate rise from Westpac together with investment loan criteria changes has seen clearance rates drop from over 80% last year to weekends of 65% to 70% in October as buyers are becoming more cautious. Together with a large supply in the spring market, the importance of having realistic expectations is the key difference in obtaining a solid result. Home values rose by 1.1% over the month of August however, data for September is showing a much more sluggish rate of growth in home values with values -0.3% lower.
Interestingly, very week rental yields do not seem to be deterring investors at this stage. Over the 12 months to September 2015, rental rates across Sydney have increased by 2.3% which is the slowest annual rate of rental growth since May 2013. Investors are overlooking a sluggish rental yield in favour of historically low interest rates and betting on future capital return and the benefits of negative gearing.
Botany, Eastlakes, Mascot and Rosebery have always been more resilient to a softer market as our areas have historically been the more affordable parts and growth hotspot of the Eastern Suburbs. We don’t expect this to change in the short to medium term. Please contact Michael Michos for any of your real estate needs or for an obligation free appraisal of your home.
