Bush telegraph set to light up NSW real estate
Media release - 22nd February, 2013
Spike in appraisals signals growing market confidence
Property appraisals in some real estate markets across NSW surged by as much as 50% in January 2013, compared with the same month last year, according to leading real estate group Raine & Horne.
“Promising sales results and activity have prompted a spike in appraisals, suggesting that the series of rate cuts delivered by the Reserve Bank in 2012 are beginning to bite, a point which is also underlined by the strong improvement in consumer sentiment last month,” said Angus Raine, CEO, Raine & Horne.
Home appraisals jumped by more than 50% in south west Sydney compared to January 2012, according to the data from Raine & Horne, while agents on the Central Coast (+15%) and the South Coast (+15%) also report a robust bounce in requests for property appraisals last month.
“An increase in home appraisals across NSW is a strong sign that consumers are more confident about the economy and job security, while low interest rates are helping real estate affordability,” said Angus Raine, CEO, Raine & Horne.
“Nevertheless, there still appears to be a shortage of listings, as many homeowners are looking for more localised evidence that they can secure the right price for their property.
“It will take the news of a couple of healthy sales of similar homes to trigger a surge in ‘for sale signs’ across suburbs and towns across NSW.”
However, the market might be kick-started sooner rather than later, with Mr Raine suggesting real estate is progressively back in vogue as a discussion starter at barbecues and office water coolers across NSW, while news of record property sales are often delivered along the local business and community grapevine.
“Once the real estate bush telegraph kicks in, I expect to see a bounce in property listings, with word-of-mouth quickly spreading the growing market confidence and translating into healthy sales.
“People are postponing listings for any number of reasons, including a desire to make some cosmetic improvements to their homes, and a belief that property prices are still undervalued, while political uncertainty is also proving a psychological block to people considering a home sale,” said Mr Tilden.
However, Mr Tilden believes the bush telegraph is set to play a role in Gosford.
“Investors are proving a key factor in the Gosford market, chasing quality, well-priced properties with healthy yields,” said Mr Tilden.
“Take the sale of a three bedroom apartment at 80 John Whiteway Drive, Gosford, which sold for $286,500 to an investor at auction last weekend.
“This property is returning $380 a week, which represents a healthy net yield of 5%.
“When investors get wind of these returns, we expect demand for Gosford investment properties to surge and once this information filters through to homeowners, it’s fair to expect a better conversion rate of appraisals to listings,” said Mr Tilden.
Charlie Wakim, Principal of Raine & Horne Bankstown, agrees that property appraisals in his region have jumped in 2013, yet there remains a shortage of homes for sale in Bankstown and surrounding suburbs.
Even so, Mr Wakim expects Bankstown’s property shortage to be addressed rapidly.
“There has been a burst in buyer enquiry in our region and where these consumers are looking to upgrade or downsize into a new property, we expect to see their existing homes hit the market as part of the sales cycle,” said Mr Wakim.
On the South Coast, Tony Hopper, Co-Principal of Raine & Horne Mollymook/Milton, said that the increase in appraisals started at Christmas time, although property listings continue to lag the levels achieved in January 2012.
“It’s actually difficult to pinpoint what is triggering the jump in appraisals, however I believe people have recognised that the doom and gloom of the past few years has been overstated,” said Mr Hopper, who was on hand at the recent Raine & Horne NSW/ACT Annual Awards to receive a number of gongs on behalf of his business, including Top Coastal Office.
“Once people start to see the market turning and homes selling, we expect listing levels to pick up pace quickly,” added Mr Hopper.
For further media information contact:
Angus Raine, CEO Raine & Horne on 0409 920 697
Andrew Harrington, National Marketing & Communications Co-ordinator on 02 9258 5400