Experts reveal how Sydney buyers should navigate through the spring property market
House hunters need to have a game plan that they are prepared to obey to combat a turbulent Sydney market that is throwing up plenty of conflicting results.
Experts say that in a market that is seeing the Sydney clearance rate hover around 80 per cent and a lack of stock, buyers need to be patient to avoid having FOMO, the fear-of-missing-out.
Since the federal election, record low interest rates and the loosening of lending requirements, the Sydney market has seen plenty of mixed results, with many houses selling for hundred thousands of dollars above the reserve, while others are only just selling.
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The mixed market has seen a small but stable growth in price, with CoreLogic August monthly home value index showing a 1.6 per cent increase in house prices.
REA chief economist Nerida Conisbee said Sydney is a tale of two cities at the moment and it is causing volatile results.
“The inner city and eastern suburbs are seeing the best conditions, with strong search activity that is now flowing through to pricing, while other parts of Sydney remain stable,” she said.
Ms Conisbee said the price guides and reserves that have been broken by so much is from a combination of factors including limited stock, buyer confidence and real estate agents remaining cautious.
“It is taking a while for agents to get up to speed with pricing and the valuation may not be as reflective as the mood on the ground,” she said.
“However, while we are seeing many huge results, the data is still yet to reflect this at the moment, which may be playing a role.”
Buyer’s agent and CEO of Propertybuyer.com.au Rich Harvey agreed that there were pockets of the market that were not being priced to reflect current market conditions.
“It is creating false hope for many buyers who think they can have a chance for a property with a $1.3 million guide, when it will really sell for $1.5 million,” he said.
To have success this spring, buyers need to be resilient and do their homework, Mr Harvey said.
“Never go to an auction without knowing how much you can spend, as I’ve seen many panicked buyers who go unprepared and spend more than what they should,” he said.
“If an auction goes above your budget and you miss out, don’t worry as there will be another home out there.”
Mr Harvey said buyers should also research recent comparable sales and know how the area is performing to avoid overpaying for a property.
Independent auctioneer and Sky News commentator Tom Panos said house hunters should also tread carefully and not get carried away with a lack of stock available.
“With a decrease of new listings putting pressure on the market, buyers are getting more emotional and are paying $300,000-$400,000 above reserve as a result,” he said.
This was the scene a fortnight ago in Strathfield, where a six-bedroom property sold for $900,000 above reserve after an emotional auction saw two registered bidders who both desperately wanted the home refuse to give up, even as it sailed past the reserve. Mr Panos said buyers need to have a walkaway figure and come up with a plan B to avoid only looking and settling for one property.
“Having a plan B puts a buyer in the best position to avoid putting all of their eggs in one basket and making irrational decisions,” he said.
If buyers find their budget isn’t working for them after many auction defeats, Mr Panos said they should avoid lowering their expectations.
“Don’t fall into a trap of going for a home you don’t really want as changeover costs are high,” he said.
“Instead, look at neighbouring suburbs that offer the same amenities for a fraction of the price.”
With the Sydney market facing a shortage of stock, Mr Panos said house hunters need to be patient.
“Buyers need to tread carefully as we are going to have a late spring this year and there will be auctions all the way up to Christmas,” he said.
Once the school holidays are finished, Mr Panos said there will be a rush of new listings from sellers who are eager to take advantage of a strong market. It will also mean buyers should have more properties to choose from than what there has been so far this spring.
“It also means that window of opportunity vendors have had with strong auction results these last few months will soften as a result of an increase in stock levels.”
Currently there are 400 fewer new listings on the market this year compared to the 1805 at the same time last year, according to CoreLogic.
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