2019: A year in review for the Illawarra property market
The real estate market in 2019 read somewhat like an action novel.
The opening scene saw the hero in trouble as the Royal Commission continued their investigations.
A few political villains made numerous threats and left the buying public nervous and cautious.
But when the sun came out in the spring, the hero prevailed as the threats became just that and the buying public returned to town, blinking in the sun but feeling buoyant and hopeful for the future.
“The beginning of the year we saw a pronounced subdued market,” explains Matt Dignam of Dignam Real Estate.
With over 27 years of real estate experience, Matt has learned to read the cycles and understand where buyer confidence comes from.
“It was the most memorable subdued period in a long time. There was a reluctance from buyers to move forward and owners were holding. This came off the back of the royal commission which tightened lending and the length of time it was taking to go through.”
Matt Dignam said the uncertainty was due to proposed legislation around capital gains tax.
However, when the elections were held, the threats of changes were overthrown.
The ALP were the clear leader in almost all polls leading up to the election and with their policy of abolishing both negative gearing and capital gains tax discount, this was causing buyer anxiety with the caution spilling into the real estate market, and also to the economy.
Spending was down, but with the election of a Morrison government, a greater sense of optimism returned as the coalition provided reassurances that buyers needed to return to confidence.
This, coupled with The Australian Prudential Lending Authority (APRA) relaxing on the assessment rate, and an interest rates reprieve mid year meant that the second half of 2019 painted a much better picture.
In the Northern Illawarra region, the lowered level of confidence had caused a high stock market as buyers hesitated.
“In July, people started looking again,” explained Mr Dignam. “There were no shocks to the economy and all the threats didn’t happen.”
“As sales decreased, so did the stock levels, so we’re now seeing a smaller number of properties for sale and mathematically, we have greater competition between buyers. This means we’ve seen more off-market and competitive prices.”
Mr Dignam feels confident that 2020 will see a recovery of the market – although he admits there could be some bumps.
“The greatest indicator of growth in the property market is buoyant employment and economy. We may see a subdued recovery as those sectors reset, but generally, I think we’ve seen the bottom of the market and are now on an upward trend.”
Right now, Dignam is focussing on increasing their stock levels. Mr Dignam’s advise to anyone thinking of buying or selling is that right now we are in a balanced market.
“There’s no reason not to sell. There is no pending uncertainty and no real reason to delay.”
“Were looking at some very good conditions and if they keep going, it will only get more expensive.”
“The only thing that could upset the market now are any major unemployment problems.”
The real estate market has taken a battering, but like any good hero it has pulled itself to it’s feet and started on the road to recovery.
Mr Dignam said that ‘bread and butter’ properties, which means 3-4 bedroom family homes in good locations are in demand with the buyers coming through his door.
“There are still and always will be more and more people moving into the area and they are always looking for somewhere to call home.”