Prices are on the Move

In spite of the predictions of some so called Real Estate experts (e.g. Steve Keen & Neil Jenman) property prices have definitely increased. Officially home values in Sydney have increased by 5.1% and unit values by 5.4% (SMH July 18-19, 2009). Considering that the top end of the market has fallen significantly, some areas must be doing very well. If we consider some of our sales data we can see some significant changes in the market.

A property in Normanhurst was on the market in 2007. At the time, the market was indicating a $535,000 – $545,000 price range. Today we are on the road to an exchange at $590,000 after receiving around 6 offers.

Two identical townhouses in Hornsby sold for $496,000 & $506,000 respectively just a few weeks apart.

In late 2008, the market was indicating a $495,000-500,000 price range for a property in Hornsby which we later sold for $515,000.

Sales Volume
In terms of settlements, the financial year was an incredible roller coaster. Settlements for the 2nd and 4th quarters were from 50% to 100% more than the other quarters. Our 4th quarter sales volume almost equalled our average quarterly sales for the previous financial year, our best year ever.

Stock Turn
Properties are being sold quickly –usually within a few weeks. We are receiving multiple offers in most cases. Thus our listing bank is far lower than normal.
So what of the future? Will prices still increase, or fall the moment the Government incentives are withdrawn at the end of the year. Who knows! The experts are making some positive predictions and are recommending that investors buy into the market. In fact BIS Shrapnel claims that property prices will rise by 22% during the nest 3 years. “We expect rising confidence in the prospects for an economic recovery in 2010, so investors are likely to return in greater numbers, attracted by increased rental returns and low interest rates”, says BIS Shrapnel’s Angie Zigomanis. While BIS Shrapnel has been known to be wrong in the past, we only have to look at real estate records of Sydney since records began early last century to realise that Sydney Real Estate Investors have always been winners over the long term.