Trends in Sydney House Sales

There is a good article in SMH Business Day today, comparing auction success rates around Australia. Sydney and Melbourne account for 80% of the overall capital city market, 26,000 for Melbourne and 20,500 in Sydney during 2009. In Melbourne auctions account for 30% of sales, in Sydney 20%. It must be remembered that Melbourne has a higher proportion of units than Sydney, and has more houses than any other state capital.

"The most obvious recent trend has been the weakening of weekend auction success rates since late April in both cities. Detecting price movement trends has been harder."
In February and April 75% of properties sold under the hammer, July's auction clearance rate was 61%.

Housing Strategy Submissions - analysis

The following post is a precis and discussion on a post copied from another blog:

Council's findings on the submissions are in
https://businesspapers.hornsby.councilsonline.com.au/Open/2010/PL_07072010_AGN.PDF

It includes: "Submissions raised objections to the Strategy (or aspects of the Strategy), provided constructive feedback on how it could be improved, indicated support for the Strategy, and suggested other precincts for inclusion." This statement might seem to imply that there was a fairly even distribution between these four categories of respondents. However another council document says only 2% of submissions were in favour of the proposal.

Individual precinct analyses are at:
http://www.hornsby.nsw.gov.au/uploads/documents/Housing_Strategy_Attachment_2.2.pdf
This reports 443 form letters and 168 individual letters were received regarding Beecroft. Of the 168 individual letters relating to Beecroft, 13% (ie 20 letters) were in favour, 4% suggested alterations (the report doesn't say whether they were for or against) and 83% (140 letters) were against. Of the 443 form letters received only 3 (less than 1%) supported the proposal and 440 were against. So of the 611 submissions, at least 580 (95%) were against the proposal.

So the statement in the main report should really read:
"The overwhelming majority of submissions opposed the Strategy. A small number provided feedback on how it could be improved, and a trivial number supported the Strategy."

This puts a slightly different slant on Beecroft resident's views on the council's proposals. Despite that, Beecroft is still to be rezoned for 5 storey mixed development.

Stamp Duty cuts for Pensioners

Under the latest NSW state budget people over 65 will not pay stamp duty when selling an existing property and buying a newly constructed home costing up to $600,000.
The objective was to allow retirees to downsize while staying in the area they now live in. However for elderly residents in Beecroft and Cheltenham, this will have little effect as there is little prospect of any new constuction homes coming available for less than $600,000. Adding the development contribution cap of $20,000 imposed by NSW state government, there seems little prospect of any developers going out of their way to build to suit this market.

Rent Freeze ends

The NSW State Government has refused to bow to pressure to extend its promise not to gouge from last year's $30 pension increase when calculating public housing rentals. Last September under pressure from the Federal Government, the states had agreed not to include the increase in single pensions in rent calculations.
Charmaine Crowe, policy co-ordinator for the Combined Pensioners and Superannuants Association, argues: "A single pensioner in public housing pays at least $3770 in rent per annum. That's comparable to what a pensioner owning a house pays in land rates and home maintenance. Yet the pensioner in public housing has a pension cut of 25%, while the home-owning pensioner keeps the entire amount."

M2 Widening Project - Noise barrier height

I found a really well prepared presentation on the noise problems associated with the proposed widening of the M2. A key element of the presentation covers the noise barriers, and in particular the height of them. The number of trucks using the M2 doubled in 2006 when the M7 opened. The report suggests some 47,000 cars and 7,300 trucks are using the M2 now, and the number of trucks is forecast to rise by 25% over the next ten years.
The noise barrier height is perhaps the critical factor in shielding the neighbourhood from the noise of these trucks, and the existing commonly used 2.4m high barriers are just inadequate. With truck exhausts typically 4.5m high, or more, those barriers achieve very little. A 4.8m barrier would seem to be essential.
Where the motorway is below the level of adjacent houses, such as where it crosses Chilworth Reserve, even higher barriers might be needed.
Of particular concern to residents must be the likelihood of the barriers being removed totally during periods of the two year construction program.

Clearance rates down this month

RP Data reports the national auction clearance rate as 56%. According to their research director "the most surprising factor is that volumes remain so bouyant despite clearance rates trending down for 11 weeks now."

What if nobody comes?

The following thought-provoking quotation is taken off the internet:

"The estimated population growth target for Sydney (1.1 million by 2031) is completely unrealistic and there is the danger that planning is done for assumed developments which can never happen. The result will be to upset the lives of many residents who are forced to move out of their homes to make room for high-rises which will become future slums. We can even have the situation that houses are demolished by developers but then the land is left vacant because finance cannot be found in the next financial melt-down."

The same concern applies to Hornsby Shire's Housing Strategy - if they rezone Beecroft and other precincts to 5-storey to meet government targets, and the Federal Government then changes the population prediction, will those rezonings be cancelled?

The same website make this proposition:

"The Federal government has appointed a Population Minister, who will research into the population carrying capacity of Australia. This process including public consultation will take
one year. Until this report is out, all activities in relation to Housing Policies should be suspended."

Buying off the Plan

Under new legislation about unfair contract terms, coming into effect today, people buying properties "off the plan" will have greater protection from developers trying to make last minute changes to the final delivered property, such as reduced room space or inferior light fittings.

New views on house prices

Figures from RPData show typical house prices rose 0.7% in May, giving an annual growth of 11.4%. Most analysts suggest the residential property market is cooling down, as interest rates bite.
One recent study into Sydney home borrowers referred to "the extreme difficulties faced by many households who have struggled to meet their mortgage repayments in recent years." The study recommends that borrowers should receive more independent advice when signing up for a mortgage.