The month in review: Wollongong
By Herron Todd White
September, 2009
As many pundits would have predicted the sub $500,000
market i.e. first home buyers market has had a sharp
increase in sales transaction over the 2008/2009 period.
This is the first real upswing in transactions since the
inception of the Global Financial Crisis in 2007 and has
been predominantly based on the incentives generated
by the government grants. The mid range market has
seen sales transactions remain fairly consistent in the
Illawarra hovering around 200 to 250 sales for each first
quarter since 2007. Unlike the mid range market which
seems to be holding on, the prestige market above $1
million has seen a drop in sales transactions from the first
quarter 2008 to the first quarter 2009.
An obvious stand out performer has been the resurgence
in the lower tier market of the first home buyers over
the 2008/2009 period. High turnover levels have been
directly correlated to that of the government incentives
and are indicative of what the market has been doing
over the last 12 months. Turnover has also been boosted
with many tenants looking to move out of the rental
market and become first home buyers. The feed back
upon inspections is that many tenants are finding that
paying off a small mortgage is almost as affordable as
paying the exorbitant rents that are being asked of them.
The consensus amongst real estate agents at this point
in time however is that the Illawarra is experiencing a
drying up of stock. The message from many real estate
agents is that the struggle for 2009 is in sourcing new
listings. An ideal example of these exuberant turnover
levels is seen in a unit at 5 Princes Highway, Figtree 2525,
this property sat on the market for 2 and a half years with
three different agent since 2006 and sold as soon as the
first homebuyers grant came to fruition in 2008.
The mid range market has shown to be performing
fairly consistently in terms of sales transactions since
the inception of the Global financial crisis. Despite stock
turnover being fairly consistent, we are generally not
seeing values on the rise and it is unlikely to see any
significant upswing while equity markets remain volatile
and there is an uncertain future and employment outlook.
The results of the data published in the graph is indicative
of the mid range market and its performance right now
showing low levels of stock turnover.
As the graph demonstrates, sales transactions in the
prestige market have been in sharp decline since the first
quarter 2007. Limited equity and the drying up of available
capital have continued to put pressure on the turnover of
prestige stock. Few examples exist in the Illawarra area
of these high-end transactions, being mainly limited to
the northern suburbs, and around Kiama and Berry in the
south. The capital is generally Sydney based and tends to
be either the grand retirement mansion or in some cases
a second ‘holiday’ house. Any of these grand mansions in
the Illawarra proper are generally those built by builders
for their own home.
|
