Current Market Insights
The Current Market Insights Podcast is brought to you by Harris Partners Real Estate.
Understanding the property market can be a challenging thing, with highs and lows, twists and turns. The media and agents tend to spread the news they want you to hear, with the advice they want you to follow.
Current Market Insights is an unbiased look into what is happening, what tips you can use to buy, sell, or rent, and that you wont find anywhere else.
Current Market Insights
2GB Sydney Now with Luke Bona
Sydney's property market shows resilience with auction clearance rates of 76% despite winter conditions and the Reserve Bank holding interest rates. The market is experiencing "artificial strength" due to extremely low housing stock levels while buyer numbers remain consistent.
• Domain reports Sydney auction clearance rate at 76%, up from 62% during the same weekend last year
• Unit market continues to underperform houses due to ongoing concerns about building defects
• Rental crisis shows no signs of improving with queues at winter inspections, which is highly unusual
• Basic granny flat in Avalon commanding $690 per week
• Immigration policy contributing significantly to rental pressure
• Building industry hampered by high costs, labor shortages, and competition from government infrastructure projects
• Developers struggling to make projects financially viable due to increased material and labor costs
• Market expected to remain strong with little downside risk due to continued low supply and expected future interest rate cuts
As always if there is a specific topic you would like for us to cover, please reach out and let us know!
Yeah, I had a funny conversation on air last Friday with a very good mate of mine, charles Tarby, who rang in because he was upset that I said drivers aged 70 and over should have an S plate for seniors. And he rang in because Charles has just turned 70 and he gave me a gob full. It was very funny. And then we got talking about the Reserve Bank leaving interest rates on hold and I said well, how about we have a chat on Monday? We look at the CoreLogic Tim Lawless CoreLogic figures over the weekend, have a look at what the auction results are and see if that's had any effect Interest rates staying where they are. And then he texts me on Saturday and says oh, mate, I'm going to China. I forgot. But very, very generously, peter O'Malley from Harris Partners Real Estate is joining us because I really want to hear these figures, peter, thank you.
Speaker 2:So much Pleasure, Luke. How are you? Yeah, bloody tarby. Well, if you meet Charles, you wouldn't pick him for 70. I'll say that I know him very well. I know him very well.
Speaker 1:I know him very well and his wife's 30. And he's just had two young children, two brand-new children, that's right.
Speaker 2:No stopping, charles, rest assured.
Speaker 1:No stopping him, but Peter Harris Partners Real Estate really appreciate this. So look, I know winter traditionally isn't a great time for auctions People don't want to stand in the driveway of a house if it's raining and windy and cold. But I just thought it'd be interesting to have a look at what happened last weekend, with the Reserve Bank making that decision. What are your thoughts on?
Speaker 2:all of this, I thought it was a pretty decent result for the weekend, luke, the Reserve Bank's decision did disappoint, there's no doubt about that, but I think there is an expectation that we'll get that rate cut on August 12. The thing that's powering the market at the moment or supporting it, if you like, is a complete lack of stock. As you say, the weather has not been the best and winter is traditionally a very low season for stock levels, and in turn that creates artificial strength because there's the same amount of buyers competing for less homes. Artificial strength because there's the same amount of buyers competing for less homes. So Domain had their preliminary clearance rate at 76% in Sydney last weekend and on the same weekend last year it was at 62%. So I think it was a good weekend overall.
Speaker 1:It was. Have you got the figures there? What about units?
Speaker 2:It doesn't give us a breakdown on units, but units, generally speaking, are underperforming houses. The unit sector has been battered over the last few years about many of the high-profile building issues and strata issues impacting the modern high-rises. So you're always going to get a lower reading in Sydney on apartments than what you are on housing.
Speaker 1:What's the rental Sydney market like at the moment? Is it still impossible? I saw this is just. For example, I saw on a website just on the weekend a rental property at Avalon, Sydney's Northern Beaches. Yes, A granny flat studio. It wasn't anything flash. It was furnished with a bed and a few things $690 a week.
Speaker 2:Yeah, I'd believe it $690 a week.
Speaker 2:Look, there is no respite coming in the rental crisis. Unfortunately, the immigration policy is way too loose and we're just not building. We're not even close to building the sort of supply in this city that's required. So, as hard as it, as hard as it is for tenants to hear, the rental crisis will go on for years yet. Luke and that's characterized by the rental market is usually fairly soft in winter, and this winter has been very strong from a seasonal perspective in winter, as we're still getting queues turning up to rental open houses, which rarely happens in winter. The big queues that you see the media often promoting is usually at the beginning of the calendar year, when people are resetting themselves for the forthcoming year. Winter's a dead spot for the rental market, but this year has been surprisingly strong.
Speaker 1:So you're saying, listen, just curb immigration until we have housing under control? Because one of the first things you said with me this afternoon was there's a lack of stock.
Speaker 2:There's a lack of stock and you either need to bring more product to market quicker or curb immigration, as you say.
Speaker 1:But also we have a lack of tradies. Not enough young Australians want to become apprentices and building materials. The cost has gone way high too.
Speaker 2:All of that is contributing to the lack of new supply coming to market. I've only had developers telling me today building costs are cruel. In them they can get the trades, notwithstanding that major government infrastructure projects are absorbing a lot of the trades in the marketplace. They can get tradies that are prepared to do the work for them, but labour costs and building costs have skyrocketed, making the projects unfeasible. And until the government work out an incentive that makes developers want to build and we're going to continue to have these issues.
Speaker 1:Luke, yeah, all right, so not a bad weekend, continuing this winter. It was sunny but, yeah, lack of stock.
Speaker 2:I think you'll continue to see a very strong market going forward from here. I don't see any downside for the property market from this point because of the immigration policy, the lack of stock and the cost of money is coming down. I think we need to have the question is the property market and the prices of what it takes to buy a house in Sydney? Is it too high for our own good?
Speaker 1:Yeah, interesting stuff. Hey, listen, you've been great. Thank you, peter O'Malley. All the best, luke. Thank you, peter O'Malley, from Harris.
