It is time to speak out loudly about what is happening in Sydney’s real estate market. Clearly it does vary from suburb to suburb and looking at the Luxury end of the market there has been a slight reduction in price in some areas. Properties at the very top end (over $10M) are holding their price. It has been quoted that the share market collapse, job losses and the disappearance of assets is having an impact on housing prices in Australia with some people being forced to market their properties.
It is vital to understand that Australia is a prosperous nation which is not in recession or even close to a recession. Australia is continuing to grow (at a reduced forecast of around 2%), unemployment is very low, inflationary conditions are improving and the Australian Banks seem to have buffered themselves to a large extent from the mess that many other Banks around the world succumbed to.
This is not the carnage the press would like us to believe. Sales volumes are down and some people are choosing to sell and others need to sell (not terribly different to any other time) – If people can sell, they will. If they can’t, they will weather the storm.
Some real estate agents (I will not name them) have been quoted in Newspapers as saying that they have reduced prices on properties from $1.5m through to $6.5M. The question which needs to be asked here is, “By how much were these properties overpriced by the real estate agent initially?” Many agents and vendors over price property (Again I ask what has changed?). In any market overpriced property needs to have price reductions and this is true of any period in time.
Earlier in the week Michael Marquette stated: “Real estate is the logical asset class at the moment. In a difficult time on the stock market it has been consistently proven that people turn to property. Australian property will be attractive to people overseas like never before. The country is holding together, real estate has not collapsed and our lower dollar makes for some excellent buying opportunities for people living in countries like the UK and the United States. I believe a lot of American money will be attracted to Australia and it makes sense that it is invested in property”.