NOT A NO SHOW – RATHER, A SLOW SHOW!!

NOT A NO SHOW – RATHER, A SLOW SHOW!!

There is no sadder pattern in the property market, than that of dwindling property levels that continue to decline. In the first quarter of 2005, the March quarter identified 1398 total sales on the Lower North Shore. In 2006, the March quarter could only manage 852 which represents an approximate 40 per cent reduction overall. Mosman, in 2005, produced a March quarter comprising 190 sales in total and in 2006 this figure was 149, which is a 22 per cent fall. On that basis it will be a very bleak Winter for the property hunters although on the positive side there will be plenty of free weekends. This will be a very testing time for agents and agencies for that matter as this will be a test for the survival of the fittest.

With stock levels at testing lows, one would think that property prices would be much higher due to the basic economic principles of supply v demand. However this is even more confusing according to Australian Property Monitors, as in February it took a staggering 118 days to sell a Sydney home. Although the general consensus is that prices are gradually increasing and if you compare February 2005, properties were then taking as long as 180 days to sell. An article by Fiona Tyndall that appeared in The Australian Financial Review on April 6, 2005, stated, “It’s taking months to sell in Sydney. In 2003, just before the market turned down, the average difference between a vendor’s asking price and the sale price was about 5 per cent. In late 2005, the discount was 9 per cent and in February it came back to 8.5 per cent.” We recently observed that a home in Clifton Gardens (from November 2005 to when it sold in March 2006) had a 27 per cent correction, although the initial valuation did not assist.

Overall we are seeing a much improved auction clearance rate which was 44.2 per cent at the same time last year, and last week, closed at 54 per cent. Across Sydney, the average price for a house was up slightly and an apartment was marginally down. This comes as no surprise. We need investors back in the market after last week’s announcement in State Parliament that the tax-free threshold has been increased from $330,000 to $352,000. Just how that genius Michael “Cost-ya plenty” can determine what constitutes a $22,000 increase defies reasoning. Many would argue that a $220,000 increase would be more appropriate. Cost-ya plenty argues that “the tax-free threshold has been increased by 6.7 per cent, to match the average increase in the value of land that is subject to land tax”. This, instead of an increase that would entice investors; the very same investors they scared away in the first place!

The Dyson Austen top 10 prestige residential survey for the March quarter was also released this week and we have attached it for those who have not read it (View it here). We can confirm that this is one hundred per cent accurate as it is formulated on exchanged property results. Just two double digit sales which is somewhat unusual, as this period (historically) has produced strong top-end action. Mosman could register just the one qualifying sale with 2 Wyargine Street Mosman selling for $8.500 million. The sale was recorded by Brendan Warner of Raine & Horne Mosman.

If you are frightened of missing something in the market you should not be concerned, as it is moving at the same frenetic pace as a Geoff Boycott innings at Lords. Very little to cheer about there. ^__^

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