A Sydney broker has claimed data indicating a resilient housing market in the city may be deceptive.
RP Data figures show Sydney saw 0.4% growth in median house prices for December, while capital cities on average fell 1.2%; However, James Tsolakis of Business Innovators in Sydney said the numbers were likely inflated by sales at the top end of the market.
“If one drills into the numbers, it’s more the high-end property that’s sold which is skewing the results. We don’t get very specific property data in this country, so you can’t tell at a glance the average sale price. You might find quite a few sales in the Eastern Suburbs that have been discounted, but they’re above the average sales price anyway,” Tsolakis said.
A market Tsolakis characterised as overpriced could be forcing out all but cashed-up buyers, he claimed.
“The numbers don’t really stack up. The only things propping up the Sydney market are high end sales and sales to foreigners. Aussies are sitting back and saying, ‘Why would I pay $750,000 for a flat?’” he said.
RP Data, meanwhile, claimed that coming months could see a revival in the housing market. With December posting the year’s smallest quarterly decline, Rismark’s Ben Skillbeck said recent rate cuts could buoy the market.
"We expect that the RBA's interest rate cuts in the final two months of 2011 will lend further momentum to housing activity as transaction volumes pick up over February and March after the seasonally slow months of December and January,” Skillbeck said.
But Tsolakis rubbished the idea that interest rates would ramp up volumes, saying rate cuts generally yielded higher prices from vendors, further exacerbating affordability problems. Figures from the Australian Bureau of Statistics may support Tsolakis’ claim. ABS data showed broadly flat new home sales for December, with a fall in building approvals.
Sydney serves as bright spot in soft housing numbers