The Weekly 16 September 2022

Greener focus on the future…

With rates having risen this large and fast there’s a good chance that the RBA is ahead of the inflation game by year end. A growing number of people think that’s a strong possibility. Basically, our inflation is part domestic (food prices courtesy of weather) and part global (supply chain disruptions on imported goods, and food and oil shock from the war in Ukraine). If any of these normalise, we’ll be better set and much better than the UK where they’re looking at disastrous inflation nudging 20%.

And we’ve had brilliant weather this week…!

There was an interesting article recently on waterfront property prices which, as you’d expect, command a premium. If occurs to me that most of our villages, despite by no means all being actual waterfront, now command a decent premium compared to ‘inland’ suburbs. There’s hardly anywhere in Palmy, Whaley, Avalon, Bilgola or Newport that’s more than a 5 minute drive to a beach!

That wasn’t always the thought; in fact it’s probably a direct result of CoVid, where what was previously seen as the disadvantage of distance has now been absolutely negated by the desire for lifestyle. Pre-CoVid, it’s fair to say that we generally traded at a chunky discount to more accessible suburbs. That gap narrowed every month through lockdown, and now we’re definitely level pegging, maybe even ahead…and that’s a trend that’s likely to continue.

Plus, of course, those distances are easier to manage when you don’t have to commute every day.

Local demand

There are plenty of other reasons to expect overall demand locally to remain solid. A number of homes that were ‘weekenders’ have become main bases in the past couple of years. That’ll likely stay true too. And despite the best efforts of developers, there’s actually not a huge amount of new housing supply locally. Sure, older houses are sometimes bulldozed and rebuilt, but that merely reflects the greater wealth coming into the area.

You’ll have seen reports of the ‘national’ house price falls in August (down 1.6%) with Sydney leading the decline (down 2.3% for the month, 5.9% for the past 3 months). Again, we can only say, these are averages, there ARE falls, around the city, but we’ve seen only a little reticence from buyers, locally. Sure, less FOMO than last year, by far, but no signs of collapse.

We are great believers in finding the right home for buyers, not just a financial asset. But if financial gain is your thing, consider the risks in being out of the market with this article on house prices over the past 30 years.

Overall, new loans granted fell in July, as households responded to the Reserve Bank’s tightening and falling property prices. AMP Capital chief economist (and local resident) Shane Oliver has suggested that there will be more falls, with a combination of lower borrowing capacity, more rate rises and home buyers hoping to time the bottom of the market.  You might’ve spotted reports of plans for the government to require new homes and renovations meet higher green standards from October ’23.

It’s probably time, that development takes on a green focus. Certainly, even now, houses with green credentials are viewed more favourably in the marketplace. The real game changer though will be with cheaper storage batteries in every household and the widespread use of electric cars.

If you’re interested it’s worth reading up about Passivhaus principles. Start here…

Apart from everything, the idea of rooftop solar, and batteries, if you can afford them, or when they drop in price, and efficient homes not wasting heat and power, is going to remain attractive as power prices remain high, and there is an ongoing risk we actually get blackouts.

Locally, the tenders have just closed (on Wednesday September 7) for the new leases at the Avalon SLC cafe and restaurant. Hopefully to a local business! We’ll presumably find out soon, and when we know – you will too.

And a reminder (and prayer to the weather gods) that the inaugural Market on The Green is at the Bowlo, Sunday, from 11.00am is a success. Music, artisans, and beverages at The Bowlo…what’s not to love.