Market Report June 2016

By Ian Campbell

Negative Gearing Debate

Labor’s proposed negative gearing changes was a hot topic of conversation during the Federal election campaign, sparking debate and analysis.

While it was difficult to find an unbiased view, property analysts SQM Research claim to have conducted independent research which showed the proposed changes would lead to property prices falling by up to 15 per cent and rents rising by 6 per cent.

Under the best-case scenario, the report said Australian house prices would fall by a combined 4 per cent over 2018, 2019 and 2020 if Labor’s proposal to limit negative gearing was implemented.

The Sydney Morning Herald article said the 4 per cent drop in price rises presupposed a 0.5 per cent rate cut by the Reserve Bank to compensate, and the biggest dip presupposed no rate cut. The worst losses were predicted in 2019 when prices would fall by between 3 and 8 per cent in 12 months.

SQM Research managing director Louis Christopher said off-the-plan investors would be exposed to a substantial risk of their property being valued below purchase price.

Rents would remain stable for some time, but there could be upward pressure from 2020 due to an expected decline in the completion of new properties. In a worst-case scenario, rents would rise 6 per cent, the report found.

Sellers needed for Stock-Starved Sydney

Some analysts are dubbing it a property drought, others a Mexican Standoff, but whatever you call it, Sydney needs more sellers!

The lack of stock is most severe in higher-priced, inner-city suburbs such as our area and on the north shore and northern beaches where some agents are reporting up to 70 per cent fewer listings than this time next year, according to a Domain Online report.

Some vendors have decided against selling simply because they are fearful they won’t be able to find something else to buy. In this Mexican Standoff situation, the only winners are those who take the plunge and sell.

Low interest rates and high buyer number are translating to snappy sales, with auction clearance rates in some areas back to boom-time levels.

So if you are considering selling, now is the ideal time to take advantage of perfect market conditions. Speak to one of our experienced sales staff today by calling 9331 9600.

Many homeowners ahead on Mortgages

Studies show many homeowners are ahead on their mortgage repayments thanks to historically low interest rates.

Commonwealth Bank says 78% of their customers are up to two-and-a-half years ahead, while NAB clients are an average of 14.7 months ahead, according to a recent report in The Australian newspaper.

To review your home loan speak to Loan Market Senior Mortgage Broker
Gary Phillips on 0413 100 302.

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