Buyers need to be decisive and up their budgets if they want to compete for spring sales
House hunters with plans to scale the Sydney property ladder this spring will need to be fast and decisive or be prepared to expand their budgets.
Property experts have warned the coming spring will be one of the quietest sales periods in years, with fewer homeowners listing their properties for sale, but plenty more buyers.
This higher-demand lower-supply dynamic will put pressure on buyers to offer higher prices or more generous purchasing terms to compete with other home seekers.
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It’s a marked change from the market conditions prevalent over the past two years when listing numbers were rising and buyer interest was waning, which put pressure on vendors to cut their prices.
Buyer demand was down at the time because fewer property seekers could get access to finance — especially investors — but recent interest rate cuts and moves by bank regulators to relax lending have changed this and put a floor under falling home prices.
Buyers have also been streaming back into the market due to the Coalition’s surprise federal election win, which removed uncertainty over whether the Labor Party would tinker with negative gearing tax concessions.
SQM Research director Louis Christopher said the issue for those seeking a home was that the recent uplift in buyer confidence was not being matched by improved sentiment among sellers.
“Spring is usually the busiest time of the year for listings and this year’s spring selling season will be a real test for the market,” Mr Christopher said.
“We anticipate there will be more sellers than in winter but it doesn’t look like there will be as many as in previous years.” Mr Christopher added that many would-be sellers may be waiting for more signs of a market improvement before putting their properties up for sale.
CoreLogic research analyst Cameron Kusher said winter has already been particularly dry on the listings front, which would likely flow through to spring.
The number of “fresh” listings — those advertised in the past month — is currently at the lowest level since CoreLogic records began in 2007, while total listing numbers have been dropping.
The Agency’s Nick Rigas said it was becoming apparent that many buyers were getting frustrated with the shortage of available stock and were prepared to spend more.
“Family properties, those with three or four bedrooms are in high demand. If you have your eye on something you may need to offer a bit more because there will be a lot of other people interested too,” Mr Rigas said.
“There is still good buying out there, but a lot of it is older stock. The quality properties get the most interest and the best prices.”
Recent interest rate cuts and signs of an improvement in real estate demand encouraged Volker Sukop and wife Jaclyn Tang-Sukop to start the process of moving house.
The couple are now shopping for a new home while trying to sell their current property on Spitzer St in Gregory Hills. The couple designed the home with the help of a builder and said selling would be bittersweet considering their house was in a prime position in the suburb. “We are hoping to move near the new airport (at Badgerys Creek). It will be a good area for us because we travel often,” Mr Sukop said.
He added that they were on the hunt for a property with room to add a granny flat.
“We’ve been watching the market and it seems like it is improving. That opened the idea for us to move on and we knew we could get a good interest rate,” Mr Sukop said. “I think it will be a bit easier than when we bought our house two years ago.”