The PROPERTY DOCTORS, Sydney Australia Novak Properties
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The PROPERTY DOCTORS, Sydney Australia Novak Properties
NOVAK NEWS - Real Estate Market Predictions for 2025
Curious about the future of real estate on the Northern Beaches? Join us as we unravel the complexities of the Dee Why property market, predicting trends for 2025 join the heavy weights of real estate Stevan Bubalo & Glen Higgs. With historical insights and current data, we explore how the market has evolved through 2024, even with interest rate changes and economic uncertainty. We'll guide you through the key stats, such as auction clearance rates and the strategies property owners and agents are deploying to ensure successful sales.
As we navigate the landscape of DY's 11,000 dwellings, primarily apartments and investment properties, you'll gain an understanding of the dynamics shaping Sydney's real estate market. We discuss the challenges of increasing stock, expiring fixed loans, and how different areas of Sydney are coping. Whether you're an experienced investor or a homeowner considering your next move, this episode offers valuable insights to help you anticipate and strategize for the future. Listen in for a comprehensive look at where the market stands and what lies ahead.
Hey, ladies and gentlemen, it is 7.58,. We're a couple of minutes early because Glenn and I like to be early.
Speaker 2:It's Monday night Novak News thing, through that little technical difficulty. We had two topics. We had the choice. We could either talk about market predictions for next year that's my choice or we could talk about the Epstein P Diddy list. That's your choice, that was my choice. We can't talk about that. Everyone voted against me. But I will say one thing Billy Dury's headed off overseas Coincidence, coincidence, or is there something more? All right, let's get into it. Uh, predictions, real estate, dy, northern beaches, 2025. We're almost seeing out the 2024 year. Yes, um, and studiers of history will understand, the best way to predict the future is see what happened in the past. So I'm going to talk a little bit initially what 2024 looked like in real estate in the DY area. Stevan.
Speaker 1:Yeah, it's a good point. I mean, obviously, coming off the back of a market that was really dictated by interest rates, real estate leading into 2024 was a little bit uncertain. Different markets react differently when you look at commercial as opposed to residential. But sitting here today, close to midway through December now 2024, we saw the market was actually pretty good and, if anything, probably followed the normal trends that we would expect to see, even in light of uncertainty with interest rates and everything behind it.
Speaker 2:Yeah, look 2024, we saw more stock on the market than in 2023. We saw most of the 2% fixed loans expiring and then people making decisions selling investment properties. Dy consists of 11,000 dwellings and I would say 90% of them are apartments and 50% of the apartments are investment properties.
Speaker 2:So, we did have, you know, good stock numbers. That's resulted, I think, in a bit of weariness in the market coming into the later half of the year and we've been left with a bit of stock on the market and across Sydney there's been a decreasing auction clearance rates so last week was 51, as recorded by Domain. Northern Beaches fared a bit better. The Greater West there seemed to be a lot more properties just passing in or not taken to auction. Same time last year a bit less stock. Interest rates. We have increases from December 23 I think we did interest rates still on the rise. Clearance rate was 55%. I think that 51% would be lower because there were a lot of unreported options and a lot of people don't like telling bad news, especially when it involves them and their vendor. That's left us at the moment with 573 properties still for sale with, I think the sign out the front says nine days to Christmas. That number was 38.
Speaker 1:Yeah, Sorry 381.
Speaker 2:381.
Speaker 1:Don't say yes. What do you mean? 381? When was it 381?
Speaker 2:381 was in 2023, same time.
Speaker 1:I would like to say that 381 is very low. Five, what are we saying today? Five, Sorry, Glenn, sorry yeah, that's still not a huge number. We're saying yeah we're still not.
Speaker 2:That is a not a huge number saying yeah in the 500, 500 properties won't get a gift from Santa. Probably this Christmas they might, no, they won't. Some good boys, some might get a Christmas Eve sale, but there'll be properties that go into the new year and there'll be strategies for the agents to get those properties sold.
Speaker 2:what I will say is it's been a real meet the markets, or the market whereby, um, I know, especially in the later half of the year, I haven't been able to dictate price so much on standard properties. They have on on sort of that dream or cream property, but on standard properties they've really had to say well, you know, this is the best offer I've had in the last 30 days, I'll take it so moving forward into the future Steph. What does the future look like? A slimmer more attractive view?
Speaker 1:I'd like to think so, probably with less air, to be honest with you, but we'll see how that prediction goes. Look, if you're following the news and a lot of people do make their property decisions based on what they see on the box when they get home after a day's work the message is mixed. You know they're saying some articles and news reports coming out that the market is going to take off in light of reducing interest rates and discussions around that. Then you know, 20 minutes later there's another news story on how the property market is about to crash. So, look, I think personally it's going to be probably a pretty stable and positive year and a lot of the indicators coming out of the more major real estate portals are suggesting that as well. We've printed off some information here. Anyway, this is all sourced from Domain and their property reporting team over there, but they're looking at. I'll go through them through.
Speaker 1:The combined capital is a 5% to 7% increase, which is pretty much on par with what a normal increase a year would look like. Look, 5% is probably towards the lower end, but a 7% is pretty average and a 10% is a strong year. So the numbers that have been broadcast, and not only through domain but through some of the other more major statistical real estate property portals, are all very similar. So look, let's talk about we'll go through Adelaide it's projected to be one of the stronger performers 7% to 9% growth for 2025. Brisbane 5% to 7%. Canberra 3% to 9% growth for 2025. Brisbane 5% to 7%. Canberra 3% to 5%. Canberra had a very good year this year with its day prices. Still, looking up Brisbane as well, brisbane it tipped to be a strong performer again. Melbourne 3% to 5% Again.
Speaker 1:And, look, I don't know, sometimes the Melbourne numbers are a little conservative. Perth big upshot 8, eight to ten percent is the projected growth over there. And then, of course, sydney four to six percent across the Sydney market. Now, look, we don't we don't Glen and I typically don't work across the other capital cities and we do work within a bit of a specialised area here on the northern beaches of Sydney. But really what we're seeing is that our market here, particularly as a lifestyle driven market we're close to the beach, transport's improving, but we're not really based on the back of infrastructure or anything like that. Really, what drives our market here is access to money, overloads, lending and if indicators are projecting a decrease in interest rates, then that typically means a moving market across the Northern Beaches market.
Speaker 2:Yeah, what's interesting with that domain forecast in Sydney it's 4% to 6% for houses, 4% to 6% for apartments.
Speaker 2:So that would show generally it would be 4% to 6% for apartments and 6% show generally it would be four to six percent for apartments and six to eight percent for houses. But it's showing that affordability is slowing down that house's growth, not desire, not people saying, oh, I want to live in a strutted unit with someone above me, you know, someone below me, it's just houses of coming in, so expensive, yeah, that the growth is is getting parity.
Speaker 1:I think one thing also blend that I think is a little bit off topic, but you know we've obviously faced it a lot in the last 12 months. It's just the number of properties that we're selling, the strata title that have got increased levies or special levies or some level of work coming up. I've never seen it this high across the northern beaches previously. Look, it's a good thing they're looking after real estate and the property and I guess the hard stuff, but big increases in strata levies across there, how do you think that?
Speaker 2:cooperating process. Well, I think it's more a change of how our body corporate committees and also the strata managers are setting up a 10-year plan and they're engaging specialists and engineers waterproofing engineers, all sorts of engineers for the building, structural engineers, waterproofing engineers, all sorts of engineers for the building, structural engineers and they're looking for problems. And you know, in an old apartment or in an old car like my Falcon, if you look for it, you'll find it, and they're finding these things and then rectifying them, and I think there's a whole industry around it.
Speaker 2:Most of the units in DY I would say 60% are double brick. 1960s to 1980s concrete slab construction.
Speaker 2:Not much goes wrong but still coming up with huge strata levies. There's a little bit of oxidisation in the steel and concrete Spalding being close to the beach. Ies, there's a little bit of oxidisation in the steel and concrete spalding being close to the beach. But I do think there's an industry in looking for these problems and then, you know, getting ahead of them. But it's costly. Do you think that will impact apartment prices? I think anything. I think anything impacts it.
Speaker 2:You know, okay, interest rates don't go up, but you know a lot of properties are carrying special levies $40,000, $50,000. So that will slow prices down. You know a property may have a levy of $40,000 to pay a special levy and you find a property that doesn't have one. But are you confident that the one in the future, you know, are you going. Well, you know, old uncle John says to you oh, they haven't got the levy now, but it's coming. It's coming and you know people pulled back on their price a little bit.
Speaker 2:So it's interesting to see units still going ahead. My prediction for next year is I don't know the lot of stock coming on. I know I've got a couple, but I'd normally have more. I think it might be a wait and see approach. I think there'll be a bit of a clean up on properties you know the 500 odd properties that are left on the beaches. They might change agents, you know, and get a fresh approach. And then I think, unless we get some, relief on cost of living.
Speaker 2:our prices will remain a little bit stagnant and I think that will go until we get a little bit of rate relief, which doesn't seem to be any time soon. It seems to be keeping pushback.
Speaker 1:Yeah, I mean three, four months ago. They were saying February. They'd be expecting some kind of a decision. Then I think I heard the RBA came out and said oh look, we want to see two more quarters of statistics, which would mean this quarter now ending in December and then, I guess, the first quarter of 2025 before they make any kind of an assessment. So it may very well be till, you know, the end of financial year, middle of next year, that we do see any kind of movement on the ranks.
Speaker 2:Well you know the last guy from the Reserve Bank that came out and made a bold statement.
Speaker 1:he decided to retire early, so I don't know if the others want to decide to retire early either.
Speaker 2:So it's quite cautious in that respect. You know, whether it needs to be that cautious or whether it's people protecting their jobs. I don't know. I don't know, but I think there is a two-tiered economy. I think there's some people with great wages whether it's 6%, whether it's 5.2%, it doesn't really matter and I think this area could be one of those areas.
Speaker 2:So your auction clearance rates are still pretty high. But you know, you go out to Western Sydney where both mum and dad are working and they've been holding on, holding on, holding on. And then, you know, christmas comes, they have a bit of a blowout. Some of these repayments are going to get pretty hard, the time that most businesses go bankrupt, and that's why I thought they'd have a look at rates over this Christmas period. It's generally March, because all their BAS payments pile up. They don't get much trading unless they have some sort of Christmas trading over that period, and that's normally the period. March, april they start winding up. So I thought they might have done that, reduced them to inject a little bit of hope into the economy. But it doesn't seem that way.
Speaker 1:Yeah right, we'll keep an eye on it.
Speaker 2:So Stev's prediction is Don't know how much.
Speaker 1:I'll be conservative at 5%. I think we'll see by this time next year. I'll say 7%.
Speaker 2:I think across Sydney we'll probably see about 5%. I think on the beaches We'll see a little bit higher. I think stock will be a bit tight. I think a lot of people will take a bit of a wait-and-see approach if they're offloading an investment property and they'll wait for the rates to come down.
Speaker 1:Okay, well, time will tell. Time will tell what happens if we should have a wager on this plan.
Speaker 2:We should, we should. We'll keep that off here. We'll have lunch, we'll have lunch. We're only dealing with 1%. So I've got to say something. I reckon. What are you going to say? 6%, 7%, 7%. Okay, I'll say 3% between now and financial year. What about end of year? End of year? I reckon another 3%, 6%.
Speaker 1:There you go. Ladies and gentlemen. Thank you, as always, for joining us. We look forward to seeing you again and our family.
Speaker 2:We can see that you're watching at the moment. Thank you very much. Thanks, guys. See you soon. Good night, Bye.