We’re hearing that momentum in the market is easing but at the same time, we’re still seeing reports about unprecedented demand. How can that be true? Conventional economic wisdom surely assumes strong demand will continue to drive a strong market. What’s really happening?
I think what’s happening is that the many potential buyers are starting to run out of puff. They’re still in the race but not pushing quite so hard to get to the finish line.
According to CoreLogic’s latest data, growth in Sydney property values rose by 2.6% in June. I see that as a great number. Values ARE still improving which is a reflection of the demand that exists and the potential to achieve healthy results if vendors choose to go to market now.
So, if the market is still strong and growing surely that means there is still momentum. So, what’s the problem? Well, it’s just not growing with the same ferocity with a growth of 2.6% potentially less than what some may have expected.
Any slowdown can fuel nerves about what the future might hold which is why it is important to look at that 2.6% growth number in a broader context. There has been an 8.2% growth in Sydney property values over the last three months and a whopping 15% growth in value over the last 12 months. We’re in a good place even if the rate of growth does continue to ease. Vendors still have the opportunity to secure good returns on their property.
Because buyers are still there. Our team continue to report strong interest in properties.
However, what I think we’re seeing is potential buyers less focussed on securing a deal right now. They’re prepared to wait, and I think much of that has to do with the fact that it has been such a frenetic market they’re exhausted. They’re still officially in the market to buy, just not as determined to do so at any cost as we were seeing at the start of this year.
So, I want to be clear. There is no need for panic. I think what we’re seeing is the residential property market shifting from a sprint to a marathon, but there are still a very healthy number of participants in the competition pushing to reach the finish line.