The first quarter of 2018 brought more mixed results for Eastern Suburbs property investors. Sales prices and auction clearance rates have been healthy, and the rental market prices fairly stable. But we are seeing some cyclical trends play out.
The December 2017 Quarter was a mixed one for Eastern Suburbs property investors and as 2018 begins, it’s much the same but for different reasons.
The Eastern Suburbs Real Estate Sales Market: Prices Stable
According to CoreLogic, the overall Sydney auction clearance rate is 66%, down 11% on this time last year. But while growth in the Sydney sales market has flattened, the Eastern Suburbs remains stronger and more resilient than most of the city with a healthy auction clearance rate of 79.4%.
Eastern Suburbs Sales: Breaking It Down By Numbers
- Eastern suburbs auction clearance rate: 77%-80% (Wentworth Courier: 12/3-19/3), 72% - 77% (Southern Courier 12/3-19/3)
- Median Sydney property price as at 31 December 2017: -1.7% qtr ($878,325)
- Median Sydney unit price: +0.1% qtr ($756,557)
- Median Sydney house price: -2.1% qtr ($1,033,892)
Eastern Suburbs Rentals: Strong Demand For Quality
We’re well into 2018 and the flurry of post Christmas listings have already been taken up by renters across the east. We’re starting to see the usual cyclical nature of the market play out.
Demand has been strong for 1-2 bedroom properties, and less of these are currently available to lease. However, the quality and price has to be right for the tenants to see value. For example, we will get 10-15 people through one unit but another very similar unit may get no-one or only 1 or 2 prospective tenants. Tenants are being pickier, and the demand is dependent on quality, proximity to transport and or shops, and the condition of the property.
We’re also observing low demand for houses rent range between $1400-$2,500, but a high number of these properties available. In part this is caused by the time of year, and a lack of business or senior management looking to rent right now, as they would usually be the typical tenant for this type of property.
We noticed that the current rental market is being driven by a few factors:
- Just like the final quarter for 2017, we’re seeing unrenovated and tired properties being left alone by renters.
- Enquiry levels of the past few weeks have been very patchy, and properties need to be priced right or it’s difficult to get prospective tenants to see the value in even turning up for an inspection.
- Tenants who would usually be renting are instead taking advantage of the softening sales market to purchase property, or simply stay where they are and watch the sales market, rather than make a move.
Eastern Suburbs Rentals: Breaking It Down By Numbers
- Average days vacant (Taylors): 11 days
- Median Sydney rental price (units): $523.70 (week ending 28 March 2018)
- Median Sydney rental price (houses): $739.50 (week ending 28 March 2018)
- Vacancy Rate (real estate industry): 2.3%
- Vacancy Rate (Taylors): 0.85%