Treak Real Estate Property Update: November

Welcome to the Treak Real Estate Property Update: our monthly round-up of news from the Sydney and national property markets, as well as what’s been going on here at Treak!

Spicing up into summer

The last month has been an eventful one, though I suppose you could say that for all of this year’s months so far. The COVID-19 situation has continued to develop, with Melbourne successfully dealing with its second wave, only for Adelaide to begin experiencing its own. It’s a reminder to all of us that there’s no room for complacency, and that we need to make habits of the things that help contain the spread, even when the coast seems clear. At Treak we’ve continued to build on our first couple of months in business, while also putting our energies into our Real Estate For Good program (a little more on that later.) And as the days get longer and hotter, we’ve been looking forward to the excitement of the summer ahead.

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This month, as a sign of our appreciation to you, our subscribers, we’d like to give a little something back. It’s our pleasure to offer you a completely FREE property report, generated by Pricefinder. These reports provide a comprehensive snapshot of everything you need to know about a particular property - history, value, locale, area statistics and so much more. Whether you want to get a more complete picture of a potential purchase, or perhaps see how a piece of your current property portfolio is tracking, simply reply to this email with your request and address, and we’ll get a report over to you!

Real Estate for Good: Long Walk Home

Treak was founded on the idea that the real estate industry could give back to the community, many members of which don’t have a place to call home. Our Real Estate For Good program sees us donate 10% of all sales commissions and 5% of letting fees to charities that help Sydneysiders in need. As mentioned in last month’s update, the Treak team recently participated in Wayside Chapel’s Long Walk Home fundraiser, which was built around the fact that a person experiencing homelessness walks an average of 28km per week: to find help, shelter, or simply a safe place to rest. Challenged to walk the same distance, the Treak team walked 29km - one kilometre more, because we’re gluttons for punishment - from La Perouse to Watsons Bay on Sunday Nov 1st. We’re very proud to say that we raised $1355 for Wayside Chapel in the process! We battled sore feet and Sydney's crazy storms that day, but we were motivated by the generous donations we received from many in our network. Thanks to all who put money towards such a worthy cause!

TREAK PROPERTY MARKET UPDATE

What has the property market been up to in the last month or so? Read on to find out!

Stamp duties in NSW to be potentially scrapped

NSW Treasurer Dominic Perrottet is about to embark upon one of the biggest tax reforms in decades proposing to gradually replace stamp duty with a land tax. Instead of paying a one-off upfront payment on the purchase of a property, buyers instead would pay an annual tax based on the value of their land. "Stamp duty is a tax from a bygone era," Mr Perrottet said. "This will be like the Netflix of property tax."

The new model wouldn’t be a forced phase out of stamp duty initially. Buyers get a choice between paying a one-off stamp duty bill or an annual property tax, the later would mean that they would need to pay the fee every year for the entire time they have the home and could save costs in the long run. It would also avoid the need to save a large sum of money upfront for stamp duty which could otherwise be used towards the home deposit.

What does this mean for property? Ultimately it could lead to more movement through the housing market which could inevitably lead to an increase in house prices. A slight dip in demand Per REA Insight’s Weekly Property Demand Report, buyer demand was down ever so slightly between October and November, falling a couple of points both at the national and state level. Tasmania was the only market that bucked the trend over the last couple of weeks, and even then demand was stable rather than actively rising. But this minor fall still leaves buyer demand well above historical levels. From a cumulative average rating of 100, demand currently sits at 160, showing the market is incredibly strong. Reflecting the buyer demand numbers, realestate.com.au reported that rental demand eased for the third consecutive week last week. It was down 3.7%, the largest weekly fall in three months. Rental demand for houses (-4%) recorded a larger fall than units (-3.5%). The reason for the recent downturn can be partly put down to the absence of backpackers and new and returning international students. The closing of international borders has put a ding in the rental property market, particularly in the university strongholds of Sydney and Melbourne. Compared to pre-pandemic levels, asking rent in Sydney has fallen around 10% on average. Interest rates RBA cash rate: 0.10% A moment of history occurred at the last meeting of the RBA’s Board, on the 3rd of November. It’s apt that in such an unprecedented year we’d see the cash rate cut to an unprecedented low, which is exactly what happened when the RBA settled on a rate of 0.10%. If the rate cut is passed on by the banks, which is exceedingly likely, then mortgage rates will also decrease, granting homeowners welcome relief. The historic lows of recent times have generated an increase in real estate market activity, and have also played a part in property prices increasing, bouncing back from recent falls across Australia, but particularly Sydney and Melbourne. Dropping the cash rate to 0.10% will further enhance the effect of this stimulus, which is good news for property owners and new buyers alike. Auction clearance rates Sydney auction clearance rate: 78% The most recent auction clearance rates, supplied by domain.com.au on 14th of November put the rate in NSW at 78%, continuing the strong performances amid ongoing uncertainty. This is up a percentage point or two from recent months, and is based off of 760 recent auctions with a median value of $1.3 million. Despite the fact that Melbourne has recently wrestled itself out of lockdown, Sydney remains comfortably the most active auction market in the country.

Thanks for reading

And that’s it from us for the month of November! Thanks for reading, and be sure to forward our newsletter onto any interested friends!