In the last edition of the Prosper Report we predicted “stock levels will be the determining factor for price growth in 2016”. As we are now past the Easter long weekend we felt it was an appropriate time to review the recent sales figures and see how these numbers compare to the same period last year.
Drilling down into the crucial December through to February sales period for 2014/2015 and 2015/2016, we specifically chose key suburbs in our core areas of operation – the Inner West, Eastern Suburbs and North Shore. These suburbs generally have higher than average turnover, but also appeal to a wide demographic.
While median prices can be affected by many factors such as stock quality or lack of supply, the general trend we can see is that prices have lifted almost everywhere since 12 months ago. In the corresponding periods the number of sales has dropped dramatically; many suburbs are even experiencing around half the number of sales as last year. So we can definitely say there is a distinct lack of stock, which appears from our figures to be correlating neatly with price growth.
* Median Prices can be affected by many factors and the numbers above do not include very recent “undisclosed” results. Source: APM Price Finder 31/03/2016.
Annandale was the only suburb in our survey with similar sales numbers compared to last year, and was also the only suburb to record a drop in its median house price (-2.55%). Conversely, the market’s love affair with Willoughby’s pretty houses on level blocks and short CBD commute times, has seen its median house price rise a further 14.94%. This outstanding growth has been amplified by a dramatic slow-down in listings – only 13 houses sold compared to 59 in the same period last year. Surry Hills has enjoyed steady growth of 4.40% as the number of houses sold dropped by 40%.
Unit sales tell a slightly more interesting story, as investors and first home buyers are faced with fewer purchase options. The more established areas with low maintenance stock as found in Randwick and Cremorne have fared well. Again we find that a 54.55% drop in turnover has pushed median Randwick unit prices up substantially (+10.95%). However a similar shortage in Camperdown has not had the same effect (+4%). This is most likely explained by the quality of properties being sold and an excess of current developments and planned developments within the Camperdown area. Many newer blocks in Camperdown are still going through their defect periods; something which makes less emotional investors cautious.
All these factors are unfortunately making the task of buying even more complex and challenging for time-poor buyers. With less stock to choose from, having an experienced Buyers Agent assisting you, has never been a more valuable asset. You will avoid the common trap of buying an inferior property, and have access to the speed and connections necessary to put you ahead of other buyers. If you don’t have the time or experience to do the job yourself, employ a professional who can take away the stress, and more importantly, save you money in the process.