Sydney upsizers and downsizers to be in strong position as market balances out
Homeowners will be gifted a better opportunity to upsize or downsize in the coming months as Sydney real estate transitions to a more balanced market for buyers and sellers.
New property forecasts revealed Sydney’s housing slump could be over by as early as the end of the year, but a return to rapid price rises was unlikely.
Housing experts said the market would instead become a more stable one where prices were consistent.
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This would be the result of a trio of recent changes, including a possible end to the current credit squeeze, a further cut in rates and certainty over the future of negative gearing.
The balanced market would mean homeowners upsizing or downsizing would no longer have to contend with the trade-off of transacting during a climbing or falling market.
Next home buyers in a rising market typically have easy work selling their existing home but face an uphill battle to get a favourable price on their next purchase.
Making a move during a downturn usually presents the opposite scenario, where buying at a lower price is easier, but selling is difficult.
My Housing Market analyst Andrew Wilson said a market where prices remained flat would ultimately be “healthier”.
“A flat market is good for everyone,” Mr Wilson said. “In this kind of market making a move just depends on your personal preferences. It’s no longer about second guessing the market and wondering if it’s a good time to buy or sell.”
CoreLogic head of research Tim Lawless said the market was showing “green shoots” suggesting it was improving, but a return to boom conditions was unlikely.
“Market sentiment is improving but many of the headwinds that were causing the downturn are still there,” Mr Lawless said. “I think it’s fair to say things will improve but there is not going to be any of the runaway growth in prices that we saw before.”
The property research group earlier forecast a bottoming out in Sydney prices by the middle of next year, but that recovery would likely occur sooner, Mr Lawless said.
Preliminary figures suggested prices were continuing to fall at a slower pace than last year, Mr Lawless added.
Sydney’s median home price has fallen nearly 14 per cent since the market peaked in July 2017, but much of the damage was done in 2018, he said.
“The downturn has been losing momentum since January and we’ve seen that continue this (past) month,” Mr Lawless said.
Sydney’s median home price dropped 0.5 per cent over May, a lower rate than the 0.7 per cent reduction recorded over April and 0.9 per cent fall over March.
Weekend auction results have also been improving. The citywide clearance rate last week was 63 per cent with 615 of 697 auction results declared.
Weekly clearance rates have hovered around the 55 per cent mark for most of the year.
First-home buyers Jeff Anderson and Jess Sarnacki-Moyce said they were relieved prices were unlikely to keep falling.
The couple were recently handed the keys to their first home in Botany but said they needed plenty of encouragement to go ahead with the purchase. It was only after chatting with financial planners Patrick Leo that the couple became certain they would not lose money.
Mr Anderson said he felt a sense of vindication now that the market looked poised to recover.
“We thought it was a good time to look for property because of the downturn but we also were hoping things wouldn’t tank after negative- gearing changes,” Mr Anderson said. “It was a gamble to take before the election but it looks like it’s paid off.”