Wednesday, 29 May 2013
Housing market sentiment improving but still favouring buyers
I interpret the data another way and counter the view it is a 'Buyers Market" rather, its as a "sellers market" - certainly sub $ 2mill in Sydney within a 7-10km radius of the CBD. Its a buyers market when there are more sellers than buyers - not when 80% of respondents think it is a good time to buy. Currently transaction volumes are up because there are more buyers than sellers ergo - "sellers market". Stock levels are down 20-30% on the same time last year in established/prime markets. If stock levels were at the same levels then transaction levels would probably not be up. Clearance rates reflect that its turned to a sellers market but we are now seeing a tightening and its happened in the last 2 weeks, stock levels are falling (which is consistent with this time of year) and I would suggest the 56% or respondents that think prices will rise over the next 6 months are the vendors whose expectations are still at the 2010 price level. I would also point out that if 86% of the 41% who think house prices will grow less then 5% over the next 6 months expect growth of more than 4%, if this happens then annualized growth would be circa 8% which is back at pre-gfc levels for many suburbs - I don't think this type of growth could be considered "subdued", if it materialised. I think the market and its satkeholdersshould want for and want 5% annualised growth at best, to allow the market to recover - it will lead to sustained confidence and lasting recovery in the housing sector for home owners and for investors looking at property as as an asset class again. I for one am not confident in the confidence level of this survey...the coal face tells a different tale! Housing market sentiment improving but still favouring buyers
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