Market Watch: Economist warns of correction for Sydney market

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HSBC economist warns of correction for Sydney market
The housing market in Sydney could see a price correction next year if the rise in the city’s prices doesn’t slow down. That’s the warning from HSBC chief economist Paul Bloxham who says that the recent interest rate cut has had an impact and with growing anticipation of a further cut will intensify that but when rates start to rise again there could be a correction. He advised: “People investing should be cautious, and keep in mind (that) the pace of growth in the Sydney market is unsustainable in the medium term.”
Source: The Australian

Hockey denies that foreign investment fees will damage the market
Treasurer Joe Hockey has dismissed fears that the proposed fees for foreign investors in Australian property would damage the market. After the proposals were announced this week organisations including the Property Council of Australia and Real Estate Institute of Australia expressed their concern about the impact they would have on the housing market as a whole. The treasurer told Sky News “I don’t accept it.” Mr Hockey said that in the context of fees such as stamp duty that are already payable and additional $5,000 is “not going to make a discernible difference.”
Source: Sky News

“Do your own bidding at auctions” urges buyer’s agents association
Buyers who rely on selling agents to bid for them at auctions are making a mistake. That’s according to the Real Estate Buyers Agents Association of Australia (REBAA) which says buyers should do their own bidding. REBAA president Jacque Parker says selling agents have a conflict of interest: “Selling agents are being paid by the vendor to sell the property at the highest possible price; they are not acting in the buyer’s best interests.” Parker suggests that if buyers are not confident in handling the auctions themselves then they should use an independent buyer’s agent instead. 
Source: REEBA

‘Uniform approach’ needed for first home buyers
The Real Estate Institute of Australia (REIA) has identified housing affordability as an 'acute issue' for first home buyers in its pre-budget submission, and says the Federal Government must urge all states and territories to take a 'uniform' approach to the provision of assistance. A recent report from Genworth showed that a large number of first-home buyers were relying entirely on debt to buy their home, using a personal loan or credit card to finance a deposit. The assistance that is available in some areas varies and the pre-budget submission argues “With three quarters of Australian first home buyers having less than a 20 per cent deposit, it is critical that they have additional ways of supplementing deposit savings.”

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