Michael Bleby & Tim Boyd | The Australian Financial Review | 23 May 2019
Sydney’s housing market has welcomed the end of the federal election campaign, with vendors and buyers shaking off the uncertainty about negative gearing and capital gains tax changes.
“It was pretty much Monday morning,” said Paddington agent Catherine Dixon of the post-election pickup.
“The vendors are ringing up and saying come and appraise my property … but I have had buyers this week saying ‘What’s your take on the market? What do you think is going to happen?'”
It is still too early to say for sure whether the changed sentiment is translating into sales more widely – this coming weekend, when the national number of planned auctions more than doubles to 1933 from last week’s 930, will be a greater test of buyers’ appetite.
The election result and the Coalition government’s planned support for first-home buyers, the move by banking regulator APRA to ease mortgage serviceability rules, and growing expectations of a rate cut as early as next month have reset expectations for the east coast-dominated housing market.
AMP Capital chief economist Shane Oliver on Thursday scrapped his prediction of a 25 per cent peak-to-trough decline in prices in the two largest cities and instead predicted a 19 per cent fall in Sydney and 15 per cent in Melbourne, with both to bottom out by year-end, rather than next year.
“The past few weeks have seen a number of developments that suggest that prices could bottom earlier and higher than we have been expecting,” Dr Oliver said.
“The election outcome removed a key threat, but several other factors also
There are already some signs. On Tuesday, Josh Vorias, the founder of construction technology start-up Sitelinked, and Alice O’Connor sold for $1.42 million the two-bedroom apartment they bought in April last year for $1.3 million.
There were five registered bidders, four of whom bid, pushing up the price of a unit that the vendor had only repainted and replaced the air-conditioning.
“We bought at the top of the market, so we were a little bit concerned,” Mr Vorias said.
“We were hoping to get back what we got it for but we exceeded that a lot. An extra $120,000 in the back pocket’s not bad.”
The sale wasn’t driven by post-election sentiment, but it helped, said BradfieldCleary Double Bay agent Sam Green.
“All those buyers inspected two weeks ago, so they would have all been there if it was a Labor government, but when it went a bit slow … it gave confidence to dig a little deeper,” Mr Green.
Louis Carr Real Estate – West Pennant Hills has presided over three sales since Saturday’s result, including $2.6 million for a six-bedroom, six-bathroom house at 17 Blacks Road in Sydney’s north-west.
Director Jennifer Carr said she didn’t know if the election result tipped buyers into sealing the deal, but the result had cleared a “cloud” over the market, which was likely to feel a lack of stock in coming months.
“There will be a shortage over winter,” she said.
Castlehaven Projects director Michael Turner said the federal election result translated into a 60 per cent increase in sales inquiries both through online channels and with sales agents. Castlehaven Projects has 50 properties being actively marketed in the Sydney metropolitan area.
“A combination of both the APRA-proposed changes to the serviceability assessment, alongside the election result, I believe has given us this bump in inquiry activity,” he said.
Mr Turner said it was too early to say whether the bump in inquiries would translate into sales conversion.