Our business is performing better than last year and we continue to outperform the market.
McGrath CEO Geoff Lucas
“Notwithstanding the market’s lower listing numbers, our business is performing better than last year and we continue to outperform the market,” Mr Lucas told the meeting.
“Based on our performance to date we expect an earnings before interest, tax, depreciation and amortisation (EBITDA) for the first half of the year in the range of between of $1 million to $1.5 million, prior to the adoption of the new accounting AASB leasing standard, which is a median increase of just on $3.8 million over the first half of the prior year.”
The positive outlook comes as the Sydney market, in which McGrath mostly operates, has seen a rise in demand, as evidenced by an average 75 per cent auction clearance rate in the past few months.
Property industry data provider CoreLogic has said clearance rates across the big cities have mostly remained above 70 per cent since July, implying that vendors remain in a strong selling position.
“With advertised supply remaining low and buyer demand rising, ‘fear of missing out’ has once again become a factor in the market, as buyers sense some urgency to buy before prices rise further,” a CoreLogic analyst said.
Mr Lucas added that the past five months have seen a reduction in the pace at which annual residential property prices prices are falling. But he did add a note of caution, saying he expects more modest price gains in east coast metropolitan markets over the next year.
“Most recently, October 2019 saw both Sydney and Melbourne property prices increase by 1.7 per cent and 2.3 per cent respectively,” Mr Lucas said.