Buyers Patterns Are Changing Top – End Property

Buyers Patterns Are Changing Top – End Property

.Election years are always fascinating given its fair to say that we live in a society based on excuses so let’s wait and see what happens on September 14. What has become more than obvious post Global Financial Crisis (GFC) is that buyers’ profiling has changed dramatically given we have in the top – end markets fewer buyers. This then becomes indicative when you do a comparative analysis of the market (which we do weekly) where houses in Mosman are thus far in 2013 on average 25 per cent down on last year.

We were doing a session with our Real Estate Coach Daniel Spencer this week where we were profiling the Mosman buyers who were placed in four categories – strongest to weakest. Out of Area – (Passive) – (the strongest.) This category is represented by overseas buyers and out of area that have made the decision to buy now and are not persuaded by negative property press. Local Buyers – (Passive) – not actively looking however prepared to engage immediately should the right property become available. They have specific requirements namely style and location. Out of Area – (Active) have been monitoring the market for some time inspecting all properties that meet their buying criteria – have looked at multiple properties. Local Buyers – (Active) – prior to the GFC our strongest buyer profile however they have experienced firsthand declining markets which has resonated in their overall market confidence – to the extent that they are buyers today only at a price. Previously the number one buyers in this demographic were merchant bankers – which explains why this category has moved from first to last.

The GFC has brought about serious lifestyle and household changes – mainly due to significant changes in the business environment where today the vast majority are working more for less. For example, in NSW it was reported late last year that the richest suburbs (based on incomes) are Double Bay – Bellevue Hill recording an average income of $129,116. Mosman was next with $126,956, Hunters Hill – Woolwich on $123,956 and Woollahra on $123,869.

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BUY PRINT

The number of bankruptcies in the March quarter of 2013 was the lowest recorded in a quarter since 1996. It is interesting to note that the Fairfield – Liverpool suburbs are the worst performing in NSW with a 30 day plus delinquency rate of 2.44 per cent which equates to 16 out of 1,000 borrowers in arrears. Mosman has one of the lowest delinquency rates in Australia which will surprise many.

Australian Property Monitors released this week their Housing Market Report – Australian Capital Cities and Gold Coast residential property market.

Sydney

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The Sydney market has commenced 2013 with increased buyer and seller activity.

Weekend auction clearance rates have been impressive, tracking nearly 20 per cent higher than those recorded over the same period last year. Early season clearance rates have been similar to those recorded during the boom period of autumn 2010 and are a positive indication of rising market confidence. Signs are also emerging of a more generalised lift in Sydney buyer activity, with increased sales in the prestige market.

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Whilst RWM did post the two highest top – end sales for 2013 in the Mosman market this week the market still has a long way to go to returning to the halcyon days of yesteryear. What is interesting for property markets is actually profiling the buyers – the two top – end sales this week went to Passive Local Buyers. We are the only Mosman real estate agency profiling buyers. What many are asking (without knowledge) is ‘will the Local – Active buyers make a return?’

Greatly assisting real estate markets are anecdotal evidence that clearly shows declining listings with many vendors opting to delay entering the market until after the federal election on September 14. The only problem with that strategy is the uncertainty of stock – rush given this strategy could fail due to a surging over – supply.

Source: Domain Property Monitors

MOSMAN – 2088

• Number of houses on the market this time 2012 – 98
• Number of houses on the market last week – 90
.Number of houses on the market this week – 78
• Number of apartments on the market this time 2012 –105
• Number of apartments on the market last week – 70
.Number of apartments on the market this week – 67

CREMORNE – 2090

• Number of houses on the market this time 2012 – 11
• Number of houses on the market last week – 11
.Number of houses on the market this week – 11
• Number of apartments on the market this time 2012 – 30
• Number of apartments on the market last week – 16
.Number of apartments on the market this week – 15

NEUTRAL BAY – 2089

• Number of houses on the market this time 2012 – 14
• Number of houses on the market last week – 7
.Number of houses on the market this week – 7
• Number of apartments on the market this time 2012 – 51
• Number of apartments on the market last week – 32
.Number of apartments on the market this week – 32

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 estate.
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For this week’s open for inspections.
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Despite conflicting opinions consumer confidence still remains the elephant in the room – evidenced with this week’s announcement jobless rate jumps as economy sheds jobs.

Australia’s manufacturing industry will continue to decline then disappear as we are no longer competitive. The federal government will stop propping it up as it is a lost cause given we can’t get close to competing with Asian markets.

I would suggest we pay absolutely no attention to property speculation that property markets are rising, simply because it’s a lazy analogy using mammoth markets not individual niche markets. Whilst caught short: housing sceptics proved wrong promoting a façade of good times ahead is in my view premature and irresponsible. Whats happening in Perth markets has absolutely no relevance to individual Sydney markets.

When markets boom it starts at the top – end and that is not about to start anytime soon. This time around it is the lower end that is booming. Last week, I wrote that last year Australian companies were involved in 1,037 deals worth $US65.46 billion, a marked decline from 2007, in the peak of the equities boom. In that year, companies locked in $214.7 billion in mergers and acquisitions in 2,267 deals. In 2013 all reports are that this figure will decline further so top – end markets won’t be booming.

Simply put: they will remain in a holding pattern for quite some time, which explains why we spend so much time profiling the buyers.

Cheers ^__^

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