Kerbside Appraisal- Bursting the Bubble

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Bursting the Bubble
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• With concerns over a bubble being formed in the
  NSW and Vic markets AAPRA and the RBA have made
  every effort to take the steam out of rising
  prices. Some of the initiatives they have taken
  are
• Media releases
• There has been a spate of media releases
  indicating the market is over heated .There
  have been nuances with a broad hint with
  releases like prices do not keep going up,
  interest rates would rise someday , this is
  probably last interest rate cut. The media have
  added to the woes by stating that real estate in
  Sydney and Victoria has become unaffordable.

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• Interest rates and investors
• The new initiative to wean out the investor is
  have a dual interest rate regime. Investors have
  to pay a larger rate of interest than home
  occupiers. They also indicated that negative
  gearing may have to be reexamined. Capital gains
  tax would have to be reexamined. This has caused
  shivers down investor spines and finally they
  have even threatened to change laws around super.
  
• The effect it has had so far have been minimal as
  prices in both Sydney and Melbourne seem to be
  holding on to their prices but one needs to know
  for how long. Prices do not seem to be going up
  at the same pace. Stock levels have come on as it
  most people that there are more chances for a
  move on the down side as compared to the upside.
  Buyers have become more cautious .Volumes of
  people through open homes seems to have dropped
  in numbers and so have offers on the table though
  the underlying move is still upwards. So all the
  efforts described above has managed to take out
  some steam from the market though the trend is
  still upwards. This becomes evident when one
  examines Real estate price indicators.

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• Auction Clearance rates
• Sydney from 81 it has turned to 77-79 in the
  last two months
• Melbourne 79 to 74 in the same period of time
• Adelaide 47-79
• Time on market
• Average time in NSW is 49 days
• Average time on market in Victoria 52 days

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• So while sentiment has taken a hit house
  valuations are not threatened at the moment. The
  lowest mortgage rates do not seem to be moving in
  the near future making this a good time to buy
  rather than rent.
• While some banks have gone conservative with
  their valuations, they are still not an issue. I
  have seen a surge in requests for market
  appraisals which could be seasonal (spring round
  the corner or home owners are looking to upgrade
  their existing homes.
• Statistical facts have been taken from Home Price
  Guide though in this ever changing environment
  one would have to rely on professional assistance
  and none of the above should be considered as
  advice.

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Contact Us

• Kerbside Appraisal
• Address P. O. Box 340,West Pennant Hills, NSW
  2125 Australia
• Call on 61421062185
• E-Mail ID anil_at_kerbsideappraisal.com.au
• Visit http//www.kerbsideappraisal.com.au/