Long and Winding Road for Sydney Property

As we move into the Winter months it is becoming increasingly evident that there is a long and winding road ahead in the Sydney property market. Headwinds are being felt in two key areas. Firstly developers are struggling to get finance to settle development sites across Sydney. The major banks have pretty much vacated this funding space and finance that was obtained through Mezzanine funders and overseas investors is starting to dry up. The upshot will be that many very good high yielding development sites will come back on the market at a discount to prices previous paid by developers.

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Interest Rate Update

Declining Housing MarketReserve Bank Board meetings will be pretty dull over the course of 2017 as all indicators are pointing to stable interest rates over the rest of the year. look at this comment from 10 months ago by the then Governor Glen Stevens,

“Recent data confirm that inflation remains quite low. Given very subdued growth in labour costs and very low cost pressures elsewhere in the world, this is expected to remain the case for some time.” Continue reading

Interest Rate Update

Declining Housing MarketAt its meeting today, the Board decided to lower the cash rate by 25 basis points to 1.50 per cent, effective 3 August 2016. I have got to say that this move has surprised me. Even with low inflation, a slowing housing sector and moderate growth, the Reserve Bank is not left with much monetary stimulus for any future global shocks. In one of his last statements as the outgoing Governor Glen Steven said,

“Recent data confirm that inflation remains quite low. Given very subdued growth in labour costs and very low cost pressures elsewhere in the world, this is expected to remain the case for some time.” Continue reading

Interest Rate Update

Declining Housing MarketIn the latest interest rate update, the Reserve Bank Board decided to cut official cash rates by 0.25% to 1.75% at this months policy meeting. This was the first interest rate adjustment since May 2015 where rates were cut to 2%. In his statement accompanying the release Governor Glen Steven expressed the same concern facing all Central Bankers around the world, low interest rates and sluggish growth,

“While several advanced economies have recorded improved conditions over the past year, conditions have become more difficult for a number of emerging market economies.” Continue reading

Interest Rate Update

Declining Housing MarketIn the latest interest rate update, the Reserve Bank Board decided to leave official cash rates at 2.0% at this weeks monetary policy meeting. In his statement accompanying the release Governor Glen Steven flagged the uncertainty in global markets and the slow down in global growth ,

“the global economy is continuing to grow, though at a slightly lower pace than earlier expected.” Continue reading

The Great Property Sale

IMG_1228Why do Chinese keep buying Australian property? Certainly a safe haven for their capital might be one reason or perhaps its the clear skies and great life style that Australia offers. But maybe it’s just really simple, they like a deal and there is no better deal than the great property sale on offer in Sydney. Lets walk through a typical example where the Chinese purchase a prestige house.

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Don’t fight the tape

front-cover-v3_460-300x200-1There’s an old share market adage, “don’t fight the tape” meaning trends remain in place and prices rise much longer than expected. The Sydney property market is no different. Twelve months ago property experts were calling an imminent top in Sydney property prices. August 2015 those same experts, the Reserve Bank included, are warning houses prices may fall and here we are 20% higher. I guess if you want to forecast future prices, do it often..
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Interest Rate Update

Declining Housing MarketThe Reserve Bank Board decided to leave official cash rates at 2.0% at todays monetary policy meeting. In his statement accompanying the release Governor Glen Steven said,

“In Australia, the available information suggests that the economy has continued to grow over the past year, but at a rate somewhat below its longer-term average. In such circumstances, monetary policy needs to be accommodative.” Continue reading