Sydney Storm clouds seem to be forming across the property market and perhaps buyers should take a breath and exercise caution. Some properties that we have purchased over the past 12 months have appreciated 20%
and certain sectors look overextended.
Take the top end of the market. Not a day goes by without a story in the popular press about Chinese buyers paying exorbitant prices for luxury houses. Bearing in mind that they have little if any idea of the domestic market and are usually led to the transaction by Chinese intermediaries paying too much to ensure a good vendor commission, its little wonder that property owners are somewhat misguided to valuations. Remember the Japanese snapped up prime properties in the late 1980’s to early 90’s only to turn around and sell them at huge discounts 5 years later. Continue reading
For the 14th month in a row, the Reserve Bank Board left official cash rates unchanged at 2.5%
. In his statement accompanying the release the Governor Glen Steven said,
“Monetary policy remains accommodative. Interest rates are very low and have continued to edge lower over recent months as competition to lend has increased. Investors continue to look for higher returns in response to low rates on safe instruments. Credit growth is moderate overall, but with a further pick-up in recent months in lending to investors in housing assets. Dwelling prices have continued to rise over recent months.” Continue reading