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What happened to the markets in July 2023?

By Jessica Ridder
Blue Mountains property market July 2023
The Blue Mountains is ever popular among Sydney buyers and with the shortage of homes for sale that we are currently experiencing this is a real opportunity for seller to capitalise on the strong winter trading conditions.
Blackheath has shown strong growth recently, with a 13.6% increase in property prices over 2022, following on from a 28.9% increase in 2021. The current median house price for Blackheath as of 30th June 2023 is $860,000.
The top selling office in Blackheath for the last 6 months is Ray White and the top 3 selling agents came from our office; No1. Alan Gregory, No2. Katrina Allport and No3. Peter Torok (Price Finder 30th June 2023).
The current median house price for Mount Victoria as of 30th June 2023 is $640,000. The top selling office in Mount Victoria for the last 6 months is Ray White, having sold 2 times more property than the nearest competitor for a higher median sale price (Ray White – $675,000. Source: PriceFinder).
Medlow Bath has shown strong growth with a 153% increase in property prices over the last 2 years. The current average house price for Medlow Bath as of 30th June 2023 is $638,250. The top selling office in Medlow Bath for the last 6 months is Ray White, having sold 4 times more property than the nearest competitor for a higher average sale price (Ray White – $694,000) and the top selling agent is No1. Katrina Allport from Ray White (Source: PriceFinder).
The current median house price for Katoomba as of 30th June 2023 is $770,000.
The current median house price for Leura as of 30th June 2023 is $1,182,500.
The current median house price for Wentworth Falls as of 30th June 2023 is $905,000.
These are the stats so far this year for Auction;
  • Ray White Upper Blue Mountains has taken 12 properties to Auction so far this year with an Auction clearance rate of 92 per cent
  • An “All Sold” auction clearance rate of 100 per cent (selling at, prior to and within two weeks after the auction date)
Why are buyers back, despite so many rate rises?
The RBA took a break this month and rates remained on hold. It is likely that slowing inflation was a key factor, in addition to the slowing economy. Despite this rate rises may not be over, with markets continuing to price in more increases for the year. While this is the case, prices across a range of assets including housing, shares and even bitcoin continue to rise. Given this is counter-intuitive in a situation where the cost of finance is so much more expensive and the potential for a recession is increasing, what is driving it?
For housing, there are a number of reasons. Part of it is population growth. Clearly showing up in rents, there are too few homes for the number of people that want to live in them. This is flowing through to pricing. In addition, there are fewer people putting their homes on the market and fewer homes being built.
While the supply side is a key to price rises, demand metrics are also looking more positive showing that buyers are back. The number of people actively bidding at auction has risen from an average of 2.2 bidders per auction in November last year to 2.9 bidders in June. Housing loan commitments increased by five per cent in May.
Why are buyers back, despite so many rate rises? It could be a fear of missing out. The best time to buy is the low of the market. Last year, we saw a lot of buyers watching and waiting for the housing market to crash, or for prices to come down substantially. The idea being that they could swoop in and grab a bargain. This belief of a significant fall in asset values didn’t just happen in the housing market. A similar trend played out in share markets and for more volatile asset classes such as cryptocurrencies.
Instead of a crash, we have seen some decent performance this year and it is likely that this is going to continue to drive more buyers into the market. Capital city house prices have risen by 5.1 per cent since the start of the year, Australian shares rose 9.4 per cent over the year and Bitcoin has risen 80 per cent since January. More recently, the NASDAQ Composite Index has had its best month since the 1980s. For some assets, buyers have not only missed the downturn but pricing is well above the previous peak of early last year.
What could change the direction of asset prices movements? Right now, house price growth appears firmly entrenched. The increase over the quarter is now at its highest level since the end of 2021. (Nerida Conisbee, Ray White Group Chief economist)
With a complete lack of stock currently available on the market and the incredibly strong winter trading conditions we are currently experiencing, sellers should have a huge amount of confidence.
This month in New South Wales | ACT, we saw:
  • 809 scheduled auctions
  • An “All Sold” auction clearance rate of 75.5 per cent (selling at, prior to and within two weeks after the auction date)
  • An auction day clearance rate of 65.4 per cent
  • Average auction days on market of 31 versus average private treaty days on market of 47.
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