Steady as She Goes

Stormy-shipWhen steering a ship, the helmsman is responsible for keeping the vessel on course. While some rudder adjustments will be required depending on the water’s topography, the aim is to keep the ship’s course steady – after all, it’s not much fun for any passengers if the ship is wildly tacking back and forth, nor is it particularly safe. Hence the phrase “steady as she goes” – meaning to steer only as needed to keep on the current course.

The major capital cities of Sydney and Melbourne have experienced rapid house price growth over the past twelve months – at 14.8% and 11% respectively. Now there’s increasing speculation in the media that a property bubble’s building, or at the very least, that prices have already peaked. The latest comments have come from billionaire property developer Lang Walker, who says he’s turned his focus to Malaysia because prices in the two Australian cities have already climbed too much. Buyers are becoming nervous, despite interest rates remaining at a historical low for a full year and lenders slashing fixed loan rates in their bid for customers.

Our local market is far less volatile. While we haven’t seen the recent heady gains of the capital cities, we also have not experienced the price corrections and periods of flat-lining recorded by property markets in those cities over the past decade.

According to researcher PDS, the local median house price has risen by just under 3% over the past year. Rather than alarming peaks and troughs, we’ve experienced a slow and steady burn, with prices rising more or less consistently every year over the past decade to arrive at a net capital gain of 45%.

Stock is becoming more and more limited as winter draws to a close. Demand remains strong, perhaps with less uncertainty than is evident in other marketplaces. Overall, there’s a healthy balance between buyers and sellers, with good opportunities for each to transact to mutual gain.

In Maitland and surrounds at least, it’s steady as she goes.

All the best

Michael Kirwan