Australia’s biggest housing market: Making sense of selling your house in Sydney - February 2020
By Guest Blogger: Benji Hugh
UTS Student of Bachelor of Communications (Journalism & Digital & Social Media
The Sydney housing market, like the markets in other Australian capital cities, is constantly changing, usually alignment with the economic cycle. If you’re thinking about selling your property, tracking the peaks and troughs so you can ﬁnd the best time to sell is a major decision. The goal is to sell at the peak of the property cycle, but how do sellers know if it’s close to the peak? How can you tell if putting your property on the market now won’t be too late for avoiding a price drop? This quick overview of the current state of the Sydney housing market covering considerations for sellers and tips for selling your home in the Sydney market could offer you some valuable insights.
The current state of the Sydney housing market
Sydney property prices are back on the rise after two years of stagnation. Since the peak in 2017, Sydney’s property prices, along with prices in other Australian capital cities (except Hobart, Canberra, and Adelaide), had been in free fall, dropping by double digits, partly thanks to the royal commission and the subsequent squeeze on credit.
From prices dropping by 15% in Sydney after the 2017 peak and sales at a 21-year low, a rapid, dramatic recovery has happened in the Sydney property market, with a promising outlook for 2020. The turnaround has largely been driven by a loosening of
credit restrictions, which resulted from APRA’s post-May-election turnaround, along with two interest rate cuts by the RBA.
A good time to sell in Sydney
According to some experts, Sydney property prices are likely to leap back to record highs by the end of 2020. Some reports suggest the cost of houses in Sydney (and Melbourne) could rise by more than 15% in 2020, and more modest estimates suggest prices could rise by 9% even if the RBA doesn’t cut rates again in early 2020, though it’s expected to. Auction clearance rates have been above 80% in recent weekends.
Additionally, population growth and low mortgage rates (below 3%) combined with the Australian love of home ownership might have helped drive the mini boom. However, it’s unlikely to replicate the trend in the boom years between 2013 and 2017, since house prices might already be overvalued.
Also, APRA could again tighten lending criteria, rates could rise, and there could be an economic downturn. There’s little doubt a mini boom is taking place in the Sydney housing market, with house prices expected to increase in the area by 3-5% in 2020. For these reasons, it could be a great time for sellers take advantage of the opportunity and sell now.
Affordability and buyer demand
While higher prices could provide Sydney sellers with an opportunity to achieve good returns, it could contribute to lower affordability. First-time buyers with smaller deposits, for example, could ﬁnd property prohibitively expensive. Moreover, the government’s ﬁrst-home-buyer scheme - which limits the purchase price in Sydney properties to $700,000 - is unlikely to improve affordability.
In addition, investors who can leverage their existing equity and afford more expensive houses could be competing with ﬁrst-time buyers in the same housing segments. Even lower mortgage rates in 2020 could see investors surging back to the Sydney market and lowering affordability for buyers, which could impact outcomes for sellers.
Strategies for selling in Sydney
If you’ve decided to sell your Sydney property, what are some tips that could help you make your sale a success given the current state of the market?
- Present your house - Make your house appealing to prospective buyers. Invest in any necessary repairs on all property inclusions or even basic renovations, and you could end up with a great return in your sale price for your efforts. Ask your agent about whether a professional stager or property stylist could help you with achieving an even better price for your
- Work with an agent - Find a real estate agent whom you trust, and he/she could assist you with everything from valuing your property correctly to staging your property. He/she can ensure your sale goes smoothly and possibly assist you with achieving a better sale Agents typically work to commission-based fees, and these are structured as a percentage of sale price, motivating the agent to obtain great sale price.
- Price - A rising market means you’re likely to get a better price, but you don’t want to overvalue your property and fail to attract buyers. Have your real estate agent carry out a realistic appraisal so you’re working in the right price range. Ensure your agent has a successful track record in price
- Marketing - With prices surging in Sydney, more sellers could be coming on the market and you could ﬁnd you’re competing with numerous other properties. Marketing your property through the right channels could see to it that your property stands out and makes a great impression with buyers. Check your agent is leveraging online channels like search engines, real estate websites, social media, and
Should you sell your Sydney property now?
While property sellers have no guarantee prices won’t start to come down again or the higher prices won’t deter buyers, it could be an ideal time for sellers to seize the moment and put their property on the market. After two years of pricing stagnation, the current mini boom might offer sellers an opportunity, one that could contract if regulators decide to shift back to stricter lending rules.
Additionally, if you’ve decided it’s the right time to sell for you, presenting your property right and getting expert input from a reputable real estate agent could set you up for the best possible outcome, so your house sells quickly for a great price.
If you would like us to recommend the best local agent to assist in selling your home, give us a call today on 1300 655 615 and we would be pleased to make a warm referral.
Click here to check out our Vendor Advocacy service here. We would be pleased to help you.