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.
Reserve 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.”