Key Performance Indicators for Property In 2014

Key Performance Indicators for Property In 2014

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You can be assured that as we enter a New Year we are inundated with real estate predictions. 2014 will be no different so let’s try and make it easier and more understandable for you. Since September 2000, we have been writing our weekly blog Virtual Realty News which provides an in-depth assessment of what the markets are doing. Despite the banter and who ha that Sydney markets are set to boom in 2014 the most consistent statistic that we have observed over the last six years is that property sales numbers are in a rapid decline.

Here is what we consider the vital property performance indicators:

1. CASH RATE

At the beginning of 2013 Macquarie Bank predicted that the cash rate in 2013 would drop to 2.00 per cent whilst most thought it would go up. The Reserve Bank of Australia (RBA) cash rate today sits at 2.50 per cent and this is where we expect it to sit for 2014 – we expect to see it start rising again in 2015.

2. AUSTRALIAN DOLLAR

At the time of writing this report it was sitting at 0.87 A$/US$ which is the weakest point since July 2010. Last week the Australian Bureau of Statistics showed that the unemployment rate remained at 5.8 per cent in December. The world’s biggest money manager BlackRock sees Australia’s dollar falling 10 per cent as a result of disappointing economic growth reporting in 2014 which would then see the RBA cut its cash rate to 2.00 per cent. There would be a number of expats hoping this to be the case as they have been sitting waiting for the Australian Dollar to start declining.

3. INFLATION

Overall the inflation rate has been well controlled by the RBA over the past few years with the RBA settings from 2.00 to 3.00 per cent. In the 12 months to December, prices rose 2.7 per cent, compared to 2.4 per cent in November. This economic data is confirming that Australia’s record – low 2.5 per cent cash rate is stimulating consumer spending. Across Australia spending has now risen over the past 16 consecutive months.

Australia_Day

Great to have Australia’s #1 aerial photographer with us again this year – Tim kindly did a themed Australia Day edition for us this year.

SYDNEY AERIAL PHOTOGRAPHY 

    4. SUPPLY/DEMAND

    This is the data I rely on the most as Sydney is comprised of 637 suburbs and growing and reporting generally throws all the suburbs into the one analysis. In 2012 Mosman houses recorded on 23 occasions more than 100 houses on the market over the one particular week – in 2013 it only managed to break 100 on 4 occasions so we are witnessing significant reductions in stock levels. In 2012 the greatest number of houses on the market in one week was 168, in 2013 it peaked at 144.To see on how many occasions the number of houses on the market breaks 100 will be fascinating given the markets are off to their weakest start ever in terms of volume.

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In 2013 the highest house sale was Altona – Wunulla Road Point Piper for $52 million. For the first time in years the only other property to sell outside the Sydney Top 20 sales was Julian Street, Mosman which was sold by Richardson & Wrench Mosman & Neutral Bay (RWM) for $13.9 million. From the Sydney Top 20 sales in 2013 just 4 went to Chinese buyers so don’t believe everything you read in the newspapers.

We don’t see any great changes in 2014 to the 2013 real estate markets given that they are now more than ever before consumer sensitive. Like everything markets are controlled by supply V demand mechanisms and if anything we believe again we will see fewer properties on the market in 2014.

Just before Australia Day last year there were 61 houses on the market, the year before 83 and this week just 47. Mosman apartments have 40 on the market this week, last year 68 and the year before 129. It’s quite extraordinary that the combined number of houses and apartments on the market in Mosman is just 87 – which clearly identifies a vendors market.

MOSMAN – 2088

• Number of houses on the market this time 2013 – 61
• Number of houses on the market last week – 42
•Number of houses on the market this week – 47
•Number of apartments on the market this time 2013 – 68
• Number of apartments on the market last week – 35
• Number of apartments on the market this week – 40

CREMORNE – 2090

• Number of houses on the market this time 2013 – 6
• Number of houses on the market last week – 6
• Number of houses on the market this week – 6
• Number of apartments on the market this time 2013 – 16
• Number of apartments on the market last week – 12
• Number of apartments on the market this week – 11

NEUTRAL BAY – 2089

• Number of houses on the market this time 2013 – 8
• Number of houses on the market last week – 4
•Number of houses on the market this week – 4
• Number of apartments on the market this time 2013 – 32
• Number of apartments on the market last week – 25
• Number of apartments on the market this week – 23

Source: Australian Property Monitors

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 opens for inspection
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Well it’s the Australia Day long weekend so that will be the major focus at the present. It’s going to be very interesting to see what happens to the stock volumes next week as the markets historically move into what we call the peak – selling period.

It’s great to have Geoff Grist back in the RWM family again. Geoff has gone the full circle having started his career here to then running his own business to then coming back home.

Have a great weekend – Oi Oi Oi!

Cheers ^__^

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