Oasis Property: Sydney Buyers Agents
2011: SPRING IS IN THE AIR
Sydney has always enjoyed ‘volume’. Most experts suggest that Sydney is only followed by Melbourne as Australia’s only city with a ‘critical mass’ of population, depth of industry and demographics to play to a consistently safe market. I suppose the best reference one can give in the equities market is that Sydney has great ‘market capitalisation’. It has lots of demand for the underlying stock.
That is not to say that other cities and regions can’t perform – just that their volatility can be exacerbated by:
- lack of depth in their market
- less industry depth (i.e. one industry towns and regions), and
- demographic mix (including socio economic limitations)
In any event, Sydney is lucky. And let me be even more specific. Within 15kms of Sydney CBD is the ‘jewel in the crown’ of Australian property markets. The mix of:
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Supply and Demand, with
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Lack of Infrastructure to outer lying suburbs, and the
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Political environment and NIMBY (‘not in my back yard’) property development (or lack of) theme;
; has given a structural shift in the supply and demand equation. This doesn’t look to be rectified soon.
This then makes for a very unusual environment to play out over the next 6 – 18 months as we set the Sydney market against the backdrop of some regional challenges (NSW and Australia) and seemingly insurmountable international financial calamities.
The recent announcement that NSW First Home Buyers Stamp Duty concessions have been axed will be a shock to that segment of the market, although I would only say that this is probably, in the long term - a good thing. It’s probably not the most politically correct thing to say at this point in time, but past the mad rush that will try to take advantage of this concession before it ends (ending January 1st 2012) I’d suggest that it will be a more consistent reflection of market performance year on year.
It should leave the property market without that artificial inflator of prices, and take away a small percentage of buyers that, quite simply – shouldn’t have been able to buy a house without a genuine deposit. These people who are always on the margins of their borrowing capacity, and I would say their absence in the market could only reduce volatility in the long term.
For more info on this see:
I do believe that the effect of this will be negligible. In this new age of austerity, I would suggest that NSW has taken a lead that other states will need to follow, in order to balance their respective budgets. I think there would be many Treasurers in other states watching the political and market fallout of the cancellation of Stamp Duty Concessions (for 2nd hand property) and see if this is a policy they could match.
On the subject of buying, I should say that there is no one more surprised that me that this has been one of our busiest times on record. We are settling an average $15m per month consistently, with our biggest month (July) being in excess of $30m. This is even more surprising due to the lack of ex-patriate buyers. As I have mentioned before, this is not for a lack of interest – but the deterrent of the Australian dollar is just too much of a burden for this market to contemplate.
Two recent premium purchases we made on the Lower North Shore defied recent trends, although I should say that both of these properties had sat on the market from some time and offered themselves up just at the right time. For all sub premium ($3m - $5m) and premium ($5m+) purchasers over this next 12 months, I can say that the opportunities have never looked so good. I say this not just in regards to the prices discounts, but also the excellent stock levels. A cursory look on the typical search engines (www.domain.com.au and www.realestate.com.au) might not give you that impression, but there is a whole other world of property not currently advertised if you just know where to look. At present, most vendors fear putting their property on the market and risking rejection by the market after 4-6 weeks of campaign (and the odds are certainly playing this way with 60 day+ days on market to turn over property). As such, they are discreetly listing property via agents and inviting personal invitations to their property.
I know when the market is performing well, the biggest complaint I ever get is that buyers cannot find enough stock. I find it incredible to think that when the market is not performing, that ‘real’ buyers aren’t taking advantage of the opportunity, and start looking avidly. Are they waiting for the market to bounce, buyer levels to increase, tightened market conditions and a subsequent price increase?
Those that know me understand that while immersed in property most of my life, I have always had one eye on the macro-economic environment in the wider market. I think there is more argument for optimism in Australia than pessimism (and for that matter the world). The pendulum of sentiment has certainly swung to suit the bears right now.
I attended an auction recently and was surprised as to the way it unfolded. This particular property, had it been auctioned 6-9 months ago, would have seen 6-8 bidders competing furiously. However at this auction there were only 3, and the third bidder only limped in at the end. Even the number of spectators was down, a sign that the public eye has shifted to other areas, other events.
Gone are the bullish buyers, now is the time of the opportunist.
On a separate note, I am proud to mention now also the inroads our Finance Division has made into the Sydney property market. We were awarded 2010/11 Business Operator of the Year and our volumes now hold us in the top 10 of all Mortgage Brokers (NSW) in the AFG broking group (Australia’s largest Mortgage Broker). Our Director Paul Myliotis was awarded a trip to Greece to celebrate his achievements in the past year. Paul is anxiously awaiting the birth of his first child – so he declined the invitation for this month’s trip (with 5 of Australia’s other top brokers). Good move Paul! We await the birth of Paul’s first child as our next addition to the Oasis Team.
Please feel free to call me or any of my partners or staff with regards to Buyers Agency, Conveyancing, Finance and Property Management. (02) 8705 3252
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Please click below to view just some of the articles presented in News Limited publications on a monthly basis, as written by our Managing Director – Gavin McPherson
August 2011 - “Make the first one count”
May 2011 - “Time to get excited”
March 2011 - “Negotiation 101”
July 2010 - “Playing it safe with property”
November 2007 - "Investors back to market & new addition to Oasis team!"
About the Authors:
Gavin McPherson is managing director of Oasis Property Buyers and also serves as a Director of the Oasis Property Corporation. He has authored a range of articles and papers that present empirical data and solid research in a bipartisan fashion. Operating one of Sydney premier buyer's agencies also identifies him as having his ears to the ground to see emerging trends as they occur – not after they happen. He can be contacted at: gavin@oasisproperty.com.au
