2020 Vision for the Acreage Market

There are lots of positive indicators that the market correction we experienced over these past couple of years has now stabilised and we should experience a healthy price growth throughout 2020 within the acreage property sector, especially around the fringes of Sydney.

As the population of New South Wales continues to increase by over 100,000 people per annum, the urban sprawl will naturally occur around Sydney’s fringes, plus with all of the development surrounding the Western Sydney Aerotropolis and the confidence coming back into the property market since both the State & Federal elections as well as record low interest rates, there will be several sections of the acreage market which look set to experience significant median price growth during 2020.

The Acreage Report

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The recovering Sydney property market is already showing key indicators that the acreage sector is heading towards another period of double digit median price growth so long as the NSW Government keeps moving ahead with infrastructure construction projects along with the further release of development precincts as part of Sydney’s urban expansion.

The Federal Government’s new first home buyer deposit scheme commences as of Jan 1 2020 should also help fuel the bottom end of the market with 10,000 eligible buyers being able to enter the property market with a 5% deposit for homes up to $700,000 in Sydney & $600,000 in Melbourne. These extra buyers entering the market will create a domino effect for current property owners looking to sell, as well as assisting property developers who have been struggling to clear some of their development stock. 

The RBA has cut the cash rate 3 times in the last 5 months: June, July, and October. The cash rate now sits at a record low of 0.75%. Most of the major banks passed on 0.15% for Owner Occupied & Investment Principal & Interest Loans and 0.25% rate cut for Interest Only Investment loans after the last rate cut.

Also, if you’re looking to raise finance to purchase an acreage property, borrowing options offered by the banks have become more relaxed compared to earlier in the year, however, it’s important to be aware that as of the 1st September 2019, Comprehensive Credit Reporting (CCR) has come into effect.

Credit reporting refers to the data available in your credit file. Every time you apply for credit your credit file is reviewed by the potential lender to gain an insight into your credit history and creditworthiness before they make a decision on your application. CCR is a new government initiated system and the available data is much more comprehensive. CCR information is available for all consumer credit products, including credit cards, personal loans, home loans, car loans, etc. It is now more important than ever to pay your bills and financial commitments on time so that you can demonstrate a favourable repayment history on your credit file if applying for any loan.

On another positive note, Sydney auction clearance rates have been climbing back up to around the 73%-82% mark over the past few months and enquiry levels have increased dramatically off the back off renewed confidence in the market

The strong activity in the residential market sector of Sydney (especially the excellent price growth currently occurring within The Hills area) is already starting push more buyers into the outer lying suburbs due to affordability. The gentrification and infrastructure roll-outs occurring within the fringes of Sydney will help to fuel price increases in 2020 throughout the district and acreage properties will experience much stronger demand.   

The average days on market for acreage properties should reduce significantly due to fewer properties now on the market along with an increase in the number of qualified buyers that I am currently working closely with.

In fact, there are quite a few who have sold their property and have decided that moving to an acreage lifestyle is where they would like to purchase and several are currently patiently waiting for a suitable property to come up for sale.

If you’re thinking of selling or if you’d just like to get an indication of what your acreage property may be worth in the current market, please feel most welcome to contact me or click here

Regards

Greg Vincent