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MARKET REPORT - SEPTEMBER 1997
Batemans Bay still has an over supply of property for sale. There has been an increase in sales activity over the past 6 months which suggests that the market is starting to improve and that confidence is returning to the market.
The national economy is stable with continuing low inflation and the Reserve Bank is under pressure to decrease interest rates further. There is major growth in the economy in the areas of communications technology, the wine industry, mining and tourism.
The global promotion of the 2000 Olympics is having a positive effect on increasing market confidence. Continuing high unemployment at 8.5%, and low returns on cash deposits are holding the economy in check.
The general real estate market is poised to enter into a boom cycle. The main indicator that is still absent is unemployment at below 6%.
Previous real estate boom conditions have occurred when unemployment is below 6%. As there has been major changes to the structure of the employment market since the last boom, such as the lack of job security, decreasing hourly rates of pay and permanent employment positions being converted to casual, multi-skilling of all staff and the down sizing of industries. All of these changes have varied the unemployment figures to the extent that it will be difficult to assume any direct correlation between the previous percentage of unemployment and the current unemployment level.
A number of markets are moving quickly at the moment with some impressive capital gains being reported such as the Sydney market.
SYDNEY
The inner suburbs of Sydney have been 'running' for the past 8 months. Auction clearance rates are up with up to 95% of properties being sold under the hammer and the majority of properties selling well over the reserve price. Although the current buying frenzy is limited to inner Sydney suburbs (within a radius of 15 minutes drive from the CBD), the Sydney market is starting to stimulate all other real estate markets in NSW.
The Sydney market, because of its sheer size, dominates the real estate markets throughout NSW. For example, retirees selling in Sydney for a 'good' price are then able to retire to say, Batemans Bay, with some degree of comfort because of the large price differences. This scenario also extends to the holiday market with Sydney buyers looking for a safe and clean environment to visit that is affordable and within a 4 hour drive of their home.
CANBERRA
The Canberra residential market also has a major influence on the Batemans Bay market as Batemans Bay is regarded as 'Canberra's seaside suburb'.
Canberra's residential market is currently in a major depression mainly due to the Liberal government's decision to downsize various government departments. It is estimated that 10,000 positions are to become redundant over the next 12 months. I have not seen any announcements regarding how this is to be achieved. It is rumoured that it will be by a gradual downsizing of departments by natural means ie through retirement and voluntary redundancy. Whichever way it happens, it is having a detrimental effect on the Batemans Bay market.
COUNTRY NSW
The country NSW real estate markets are reporting low turnover and little demand for property generally. Any optimism that was gained due to the bumper cereal cops over the past 2 years, seems to have disappeared with the expectation that another drought is on the way.
Country NSW affects the Batemans Bay market in a similar way to Canberra but with less impact as buyers and holiday makers from the country tend to go to a variety of destinations and this lessens their direct impact on the Batemans Bay market.
RECOMMENDATIONS
Buy residential real estate in good locations in the Batemans Bay area. Preference should be given to properties with water views and that are close to the beach. I also recommend that you register your interest as a buyer with The Professionals - Batemans Bay so that we can advise you of any 'specials' that come onto the market.
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