Bargains found in the March 2011 Sydney residential property market

March 31st, 2011

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The Sydney property market this month was one interrupted by a change of State Government on 26 March 2011 and influenced by the natural disasters in Queensland and Japan. In a mood reminiscent of the uncertainty induced by the GFC, other buyers were spooked by the nuclear scare following the last of those disasters as well as the political upheavals in North Africa and the Middle East.

Compared to the same time last year, listings (which included stock hanging over from 2010) were up by an average of around 20% whilst clearance rates were down by about 10% averaging a luke warm 60% over the four relevant Saturdays including polling day. Even an unwise relaxation of lending criteria by some major banks was insufficient to arrest falling loan approvals. The ratio of savings to household income continued its upward trajectory which was consistent with a 3.2% fall in the Westpac and Melbourne Institute “time to buy a dwelling” index during the month relative to December 2010.

For those in the Sydney property market on a daily basis such as Curtis Associates , the trends described in CurtiseCall February 2011 continued with savvy bargain hunters in the sub $1 million bracket proving that “the money is always in the buying “ by inflicting modest capital gains on vendors who paid too much for their properties during the 2003 and 2007 peaks in the property cycle.

Two examples from the eastern suburbs illustrate the trend: The $782,500 paid on 9 March 2011 for 34/33 Reservoir Street, Surry Hills represented a paltry 3.6% per annum gross capital gain on the $695,000 paid on 10 August 2007. For the vendor of the attractive 4/49 Imperial Avenue, Bondi, the $786,000 secured pre auction on 17 March 2011 represented a miserly 2.6% on the $657,000 paid on 13 September 2003.

In the $ 1 to 2 million bracket, stability remained the dominant trend with quality or unusual properties attracting strong buyer interest throughout much of the Sydney property market except in the glamour suburbs such as Mosman and Woollahra where turnover was thin.

For an excellent example in the east, the unoccupied seven bedroom/seven bathroom property at 110 Victoria Street, Potts Point sold $140,000 above its reserve on 12 March 2011 for $1.84 million.

Similarly, the owner of 27 Kepos Street, Redfern grossed a staggering 14.2% annual capital gain over nearly 14 years when that property sold on 26 March 2011 for $1.245 million.

The inner west retained its mantle as Sydney’s hot spot with solid prices and high gains again being achieved above $1 million.

Examples included:

  • 27 Arthur Street, Balmain which sold on 5 March 2011 for $2.475 million
  • 47 Amy Street, Erskineville which sold on 5 March 2011 for $1.69 million
  • 33 Georgina Street, Newtown which sold on 19 March 2011 for $2.37 million

Above $1 million and in a continuation of the trend identified and analysed in CurtiseCall October 2010, poll position this month unarguably belonged to Strathfield in the inner west where the reported clearance rate for houses in this bracket was almost 100% with 13 houses selling at an average price of $1.67 million; the highest being $3.8 million paid on 5 March 2011 for 13 Newton Road, Strathfield.

Next month’s CurtiseCall will focus on the impacts on Sydney property prices of light rail projects both under construction and as promised by the new State Government.