Newcastle May 2017

The month in review: Newcastle

By Herron Todd White
May 2017

The Newcastle market has been hot for a considerable period. There are any number of factors that could derail the present state; however, the most likely would be boring, plain vanilla buyer fatigue. This happens at the back end of every boom. The market gets so hot that buyers panic. The overriding emotion is one of fear – fear of missing out, or fear of being left behind. Buyers start doing crazy things in order to secure their properties, such as putting ridiculous offers in before auction in an attempt to stop it from getting to an open bidding frenzy at auction time.

That can only last so long, though. There always comes a point when the market collectively says, “You know what? We are done; we can’t take it anymore; we are just going to sit this one out.” When that point occurs, and it always does, the market returns to a sense of normalcy. Agents have to work that bit harder to achieve a sale. Vendors can’t sit back as smugly, casually sift through offer, after offer and hand select the best.

The usual macro-economic factors are always in play when it comes to the Hunter housing market. Interest rates, coal prices and unemployment rates are always near the top of any list of what might stall a market. What happens then is anyone’s guess, but changes in any of these metrics will always have a strong impact on the local market. As an example, when interest rates increase, this correlates almost overnight to fewer valuations being undertaken in the immediate aftermath of a change. This doesn’t necessarily impact prices, but it does impact the number of homes being sold and transacted. The number of homes being sold directly relates to one-half of the crucial demand-versus-supply equation.

 

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