Some critics predict that the New South Wales property market will experience further depreciation in home values for the remainder of 2011. With clearance rates consistently below 60%, it seems buyers are airing on the side of caution.
Despite however, the market being more subdued than in 2010, is it all bad news in the NSW property market?
What is happening right now?
Tim McKibbin, CEO of the Real Estate Institute of New South Wales believes “whilst market conditions are favourable for buyers, looming interest rate rises and cost of living pressures are weighing on the market. With buyer appetite slightly down and a steady flow of new houses listed, we are seeing days on market for stock increase vs 2010.“
“Despite this, we are however still seeing strong market appetite within certain segments of the market. Whilst the overall clearance rate for the NSW market has consistently trended below 60% over the past month, the clearance rate for flats and apartments has consistently trended above 60% over the same period. This signals that buyers are trading down in terms of size to get onto the property ladder. “
With Q2 median prices to be released in the coming weeks, we are likely to see confirmation that the market has continued to soften however this should not be cause for major concern.
Tim commented “the winter months are usually quieter than Spring and Autumn and whilst I do not believe market conditions will return to the levels of 12 months ago, I do envisage market softening will encourage more buyers back into the market and clearance rates will rise above 60% during Spring selling season, this will however largely be dependent on the RBAs decision to lift interest rates.”
realestateVIEW.com.au is managed by WebIT