Insights Into the Northern Beaches Property Market Ahead

Northern Beaches Real Estate Market Insights 2012-2013

It feels like a lifetime ago that we heard any positivity about the property market or state of world finances, but for the first time I am essentially confident that we are past the worst and are heading for blue skies in 2013.

What I’m seeing on the northern beaches NSW market, backed up by some key data points, is that people are just beginning to feel secure again. Suburbs with more affordable homes such as Allambie, Beacon Hill, North Manly, Frenchs Forest, Forestville and Manly Vale never felt the full blow like suburbs such as Balgowlah Heights, Clontarf or Seaforth did so the length of recovery will vary from suburb to suburb.

Of course nobody wants to ring the bell but all signs are that we are well beyond the worst and that we have entered a new growth cycle with good times ahead.

1. Interest rates are looking to again fall further. Australian bonds rates are around 2.5% which suggests that borrowing may come down under 5.0%! The professional markets rarely get it wrong. This is good for first home buyers, investors & upgraders.

2. The Australian share market is around 35% off its all-time highs. The US is now only 5% off & the FTSE (Finance Times and London Stock Exchange) around 16% down. So this suggest as the Australian Dollar comes down we should see a catch up in the Australian Stock Exchange which is good for premium properties.

3. 41% of new mortgages last quarter (AFG) were to private investors. That means that people are seeing property as again a blue-chip investment & a reason to re-deploy their cash savings in a better growth place.

4. Auction clearance rates have seemingly settled in around 60%-65%. This is right in the middle of what you would call ‘steady state’. A great sign for the property market!

5. Australians de-leveraged during the GFC so are in better shape in many ways than beforehand (assuming they kept their jobs).

6. Affordability has increased for first home buyers. Home loan rates are around 50 basis points lower than their long term average and fixed rates are sitting around an attractive 5.39%. AFG reported August was their strongest mortgage month for home loan applications in more than three years.

7. Rents have continued to rise in metropolitan areas with the median rent for a three bedroom house in Sydney increasing around 5% to $420 per week this year. The median rent for a two bedroom apartment grew by 6% to $425 per week during the same period. This encourages renters to consider purchasing a home and provides investors with better yields.

8. Changes in legislation has allowed SMSF and super fund trustees to use borrowed monies to acquire any asset (including property), this has open up opportunities for property investing and asset building. However it’s best to speak to your accountant if you intend on purchasing property inside your Self Managed Super Fund.

9. Investors have returned to the market this year and key stats suggest there is a large pipeline ready to buy. 45% of those getting loans approved have been to investors, which is 5% up compared to mid-August. Auction clearance rates have crept up from below 50% to above 60%, with multiple bidders at Auctions and multiple offers being put forward for Private Treaty properties. Sydney recorded its highest Auction clearance rate in two years in August. The signals are that buyer demand has deepened, with the temperature being turned up a couple of degrees in the property market.

 

Predictions for 2012

Rents to increase by 5% on the Northern Beaches.

Sales Prices:

  • Under $750,000 to increase by 3% -5%
  • $750,000 – $1,500,000 to increase by 7% – 8%
  • $1,500,000 to remain stable for the next 6 – 9 months and then a 10% rise in FY 14

Top Northern Beaches Suburb Picks – Houses:

  • Freshwater
  • Allambie/Allambie Heights
  • Balgowlah Heights
  • Beacon Hill
  • Frenchs Forest
  • North Manly
  • Palm Beach

Top Northern Beaches Suburb Picks – Apartments:

  • Manly
  • Queenscliff
  • Manly Vale
  • Fairlight
  • Dee Why

 

Disclaimer:

The information provided does not constitute financial advice. The information is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific advice.

 

For Property Enquiries, Please Contact:

Tim Cullen on  0424 006 855

Bernadette Cullen on  0414 618 908

About Tim Cullen

Since joining McGrath Estate Agents 18 years ago, Tim Cullen has defined himself as a first class industry leader with an outstanding track record and rapidly growing client base. He consistently ranks in the top 50 agents nationwide in the Real Estate Business’ Top 100 Agents List, ranking as high as 21st in Australia. He is passionate about real estate and delivering premium results for his clients.

Speak Your Mind

*