Analyse real estate by speaking volumes

Analyse real estate by speaking volumes

This week the Domain Group published its House Price Report for the December quarter 2014 revealing that Sydney house prices rose 4.1 per cent for the quarter up from 3.5 per cent in the previous quarter. Apartment prices also rose by 2.9 per cent over the quarter which followed the September quarter which was also up 1.4 per cent. Annually, Sydney house prices have increased by 14.1 per cent and apartments have increased by 10.4 per cent. All very interesting however it means very little given this is the compiled figure for Sydney and is not representative across all households – even though many home owners believe it is.

For the first time that I can remember the top 10 Sydney house sales were all above $10.000 million which is an amazing feat in itself. No I am not about to go into how the top end sales skew the median prices – given I treat this data with a grain of salt. My preferred method is to look under the bonnet to see what actually is going on – by looking at the annual number of trades and the total volume of trades in dollar terms. I find this an interesting method which tells me much, much more about what exactly is happening in the marketplace for both apartments and houses.

This week I did just that – I broke down the figures for Mosman which has one of Sydney’s highest property turn – over rates, and the figures are very interesting and in some instances quite amazing.

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Mosman Houses

  • 2014 – 329 recorded sales with a total value of $1,078,328,672 *
  • 2013 – 379 recorded sales with a total value of $1,061,295,721
  • 2012 – 286 recorded sales with a total value of $802,560,700
  • 2011 – 271 recorded sales with a total value of $794,649,292
  • 2010 – 316 recorded sales with a total value of $901,963,149
  • 2009 – 279 recorded sales with a total value of $734,026,251
  • 2008 – 247 recorded sales with a total value of $702,686,112
  • 2007 – 376 recorded sales with a total value of $1,133,609,387

*This figure will increase as more sales settle in 2015

What this tells me is that Mosman house sales are getting back to where they were in 2007 (pre – GFC) given 2013 and 2014 both broke the $1.000 billion sales volume barrier.

Mosman Apartments

  • 2014 – 467 recorded sales with a total value of $461,024,250*
  • 2013 – 482 recorded sales with a total value of $478,346,540
  • 2012 – 472 recorded sales with a total value of $396,810,977
  • 2011 – 477 recorded sales with a total value of $387,294,595
  • 2010 – 473 recorded sales with a total value of $391,925,992
  • 2009 – 484 recorded sales with a total value of $411,218,407
  • 2008 – 442 recorded sales with a total value of $323,799,406
  • 2007 – 485 recorded sales with a total value of $400,122,811

So for the past eight years the number of apartments sold in Mosman each year has been between 442 and 485. Houses however have ranged from 279 to 379 so it is much easier to predict how many apartments will be sold in 2015 which would be 473 – now that is what I would call baffling data.

Back in 2007 the cash rate moved from 6.25 per cent to 6.75 per cent where today it sits at 2.50 per cent with many suggesting a strong possibility it will be cut next week when the Reserve Bank of Australia meets – I don’t believe they will cut at this point although further cuts are inevitable.

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I find this Domain Group graph fascinating as it clearly identifies what many already know; that being that markets are always self-correcting. Brisbane, Adelaide, Darwin and Hobart apartments are identifying value declines and Darwin is the only state/territory identifying house value declines despite a record low cash rate. Will the Australian property investors start investing in these areas that are in decline? Absolutely not given investors much prefer to invest in areas identifying capital growth over declining markets given concerns that these markets will decline further.

Sydney’s overall vacancy rate sits at a very tight 2.0 per cent despite concerns that the bull run of investors into the market has not even put a dent in the vacancy rate.

Only when you break down the numbers in demographic property markets do we start to clearly identify how the markets speak in volumes.

MOSMAN – 2088

• Number of houses on the market this time last year – 68

• Number of houses on the market last week – 48

• Number of houses on the market this week – 58

• Number of apartments on the market this time last year – 47

• Number of apartments on the market last week – 44

• Number of apartments on the market this week – 43

CREMORNE – 2090

• Number of houses on the market this time last year – 10

• Number of houses on the market last week – 6

• Number of houses on the market this week – 8

• Number of apartments on the market this time last year – 19

• Number of apartments on the market last week – 14

• Number of apartments on the market this week – 18

NEUTRAL BAY – 2089

• Number of houses on the market this time last year – 10

• Number of houses on the market last week – 6

•Number of houses on the market this week – 4

• Number of apartments on the market this time last year– 32

• Number of apartments on the market last week – 32

• Number of apartments on the market this week – 37

For this week’s sales in Cremorne real estate, Cremorne Point real estate, Mosman real estate, Beauty Point real estate, Clifton Gardens real estate, Balmoral real estate, Neutral Bay real estate, Cammeray real eFor this week’s sales in Cremorne real estate, Cremorne Point real estate, Mosman real estate, Beauty Point real estate, Clifton Gardens real estate, Balmoral real estate, Neutral Bay real estate, Cammeray real estate

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For this week’s open for inspections

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Source: APM Price Finder

Cheers ^__^

 

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