All signs are there for an action packed 2014 (at least in Sydney)
Depending on who you are talking with about the global economies commentary is either optimistic or pessimistic – this appears to be the new world order. Personally I’m on the optimistic side although I’m well aware that consumer sentiment can change in a heartbeat. The Commonwealth Bank future business index, which gauges the sentiment of midsize businesses with a turnover of $10 million to $100 million found that business is bullish on 2014. The index was 17 points in the December quarter, its highest level since the survey began in September 2011 and up from 10.8 points in the previous three months.
I don’t really care these days what weapon of choice one uses to determine what’s happening in global economies so long as we keep seeing positive consumer sentiment. The year that the world is taken off life support is yet another interesting analogy and very hard to argue against. Despite the rejoicing the Australian economy has been dragging its feet for well over four years now so it was only a matter of time before the mode went much more up-tempo.
Gong Xi Fa Cai – The Year of the Horse is connected to travel and speedy success. It’s a good year for action, enterprise and achievement – as the horse has plenty of energy and charm. So it will be most interesting to see how dominant the Chinese buyers are in 2014.Chinese buyers are fueling Sydney property hotspot demand and Australian banks’ lending to Chinese borrowers has soared by 75% in a year, as the industry rushes to lift its exposure to Asia’s powerhouse economy. The value of loans to Chinese borrowers on the books of Australian banks swelled by US$12.3 billion to US$28.7 billion during the year to September, figures from the Bank for International Settlements show.
More than 20,500 people from China, Hong Kong and Taiwan settled in Australia in the year to June 30, according to immigration department figures. Another 219,000 came to Australia as temporary immigrants and students, the data show.
Source: Australian Property Monitors
The APM House Price Report for the December Quarter 2013 highlights Sydney as the absolute star performer in the house and apartment sectors. The March quarter 2014 will confirm that the Sydney property market is taking off – although we need to look closely at what is happening in Mosman. Last year I wrote that “in 2012 out of 52 weeks there were on 33 occasions more than 100 houses on the market. In 2013, Mosman only broke the 100 mark on just four occasions which explained why we had fewer houses on the market."
We work on the philosophy that only 5% of house owners are totally satisfied with the home they currently reside in and s79% “acknowledge” that they would be happy to move to a better home however it’s not a major concern or priority. The lesser the number of homes on the market resonates back through their consumer sentiment. It has become instinctively clear that this housing desire was lost in the global financial crisis (GFC) as households re-calibrated their lifestyles and requirements.
Again this is seen with the number of houses on the market this week which was quite disappointing – from last week’s 47 this week it moved to 68. This time last year the number was 79 and the year before that it was a staggering 129.
All the signs are there for an action packed 2014 property market (well in Sydney anyway).
Naturally, there will also be many conversations about that mysterious property bubble too. As we have said on countless occasions ‘yes – there will be areas that crash and burn, that’s the nature of the industry’.
Although this time around there are many more buyers than sellers which is a pretty good clue – better known as a vendors market.
Robert Simeon is a director of Richardson Wrench Mosman and Neutral Bay and has been selling residential real estate in Sydney since 1985.
He has also been writing real estate blog Virtual Realty News since 2000.
The RWM real estate model has sold in excess of $1 billion in database sales globally.