Listening to the real estate pundits is doing nothing for our nation’s sanity.
Sydney prices go up 20%, most homes there are selling for $1m+ and that’s just the start?
“China! China! China!”
“It’s all out of whack. The average income cannot afford the average home.”
Yet somehow …
What the papers say
It’s got another 30% to grow. Next day, same paper, another expert says it will drop by 15% in the short term.
No wonder you’re confused.
The China Argument
“China’s meltdown will stop Chinese investment.”
“Chinese investors will be looking for a safe haven.”
Take your pick.
We’re talking about two markets. In the lower to middle sectors there’s no doubt that prices have run riot, but that’s not our department.
At the top — especially $10m+ — we haven’t seen dramatic change. We’re not seeing 5 or 6 hands waving at auctions or multiple envelopes at expressions of interest; and up here interest rates don’t count. The top end is driven by the availability and choice of good houses.
In the dead of winter
While the agents were away with the umbrellas in their cocktails, their unloved vendors gave us our busiest-ever July — and prices well below market and even council valuations.
Now they’re returning and another game is on.
The phone doesn’t stop. “Come and see this.” “Do you have a client who…”
AAA addresses hanging like low fruit and no buyer to pick them — which seems to argue with the predictions of Those Who Know (and tell us) that August’s choices are going to be slim and Spring itself may be late because would-be vendors see a rising market (even if that’s not a fact at the top) and are banking on higher prices still.
Where is this so?
Toorak, Hawthorn, Malvern, South Yarra, East Melbourne, Brighton…
Home bought for $5.6m 12 months ago. Now on the market for $8m.
The Oz dollar has dropped by so much against the Yuan that in the view of one Chinese vendor the AUD price has to rise to compensate.
With all the sympathy in the world for those suffering the effects of currency risk, that’s not an argument that goes very far with buyers.
(The other side of that coin is that the Yuan is buying a lot more than it used to.)
The BMW Real Estate Index
Over the next six weeks at the top end there will be little choice to tempt buyers. The queues of agents outside the BMW dealerships will be short.