LOSING THE PLOTS – LITERALLY !!

LOSING THE PLOTS – LITERALLY !!

I have always liked the saying “success leaves clues” although it is difficult to fathom how many clues need to be left to entice investors back into the residential property market. As we have reported recently, the rental market is peaking at levels that we have never experienced before with weekly rents in escalation mode.

Not that long ago we reported that the apartment market had bottomed and we are still of that opinion. Just this week, industry watch dogs predicted a further five per cent increase this year and as much as forty per cent, over the next five years. With much debate about housing affordability who would have thought that now we have rental affordability. The decreasing number of new dwellings, combined with migration, has mixed a volatile cocktail for the rental market. Just this week, one agency suggested auctioning rental properties as they become available! This weekend we will be offering nine new rental properties and are expecting applications on more than fifty per cent by close of business tomorrow.

This graph published by the NSW Real Estate Institute identifies the present vacancy rate as the lowest since the first recorded data.

Interest rates overall, are causing the property market plenty of grief and it will be interesting to see the results of next Tuesday’s meeting at the Reserve Bank. For the fifth time in six months, new home sales across Australia have continued to fall. Housing Industry Association’s executive director of economics and housing, Simon Tenant, said “housing affordability is at critically low levels everywhere across Australia and has suffered an additional hit in 2006 because of higher interest rates.”

For those looking to purchase a property, you have five weeks left as the markets prepare themselves for the final run home – it will be an interesting ride. At this point, our last public auctions will be December 12 – quite different to last year, when the market started to lose momentum in November.

We expect a significant participation from expats and again, especially from the United Kingdom. According to the Centre for Economics and Business Research (CEBR) the value of bonuses paid to London’s financial elite, will rise 18 per cent this year. In its latest quarterly business forecast, the CEBR said it expected about 4,200 staff at banks, law firms and other professional service businesses, to pocket seven-figure bonuses this year. We certainly believe that the Sydney market will attract some of those home sick, yet very wealthy expats. Cheers to that ^__^

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