May 2014 - What's happening in the Sydney Market?
By Rich Harvey, Managing Director propertybuyer
Welcome to your May propertybuyer market update.
In this edition we look at:
- Sydney Property Market Observations
- Client Stories
1. Sydney Property Market Observations
We have noticed some rationality returning to the property market over the past few weeks. While the Sydney property market hit a frenzied state late last year and early months of this year we are seeing some tempering in buyer behaviour. Price increases at 2% per month (16% per annum) and auction clearance rates above 80% are not sustainable long term.
Much of the Sydney growth can be attributed to pent-up demand which has been released due to a growing local economy, low interest rate environment and improved consumer confidence. And this demand is always exacerbated by the lack of housing supply and lack-lustre construction figures.
Earlier in the year we’d see over 30 to 50 groups going through the first inspection and the property sold in the first week. Unless you were geared up ready to buy you would miss out. Now we are seeing the “fear of missing out” (FOMO disease) dissipating as buyers are more selective about their price limit and properties are taking a little longer to sell.
Now we are in May, we are seeing accurately priced properties still selling quickly, but not in a panic state of buying. We are still very much in a sellers market with a higher number of buyers chasing a shortage of properties. Vendors that have been sitting back are now seeing strong sales results and are more likely to list. While winter traditionally sees a slow down in sales volumes, I believe this year we will see a generally higher number of properties for sale than past years as confidence is higher. This bodes well for buyers as there is more available stock for selection.
I’ve asked a couple of real estate agents in the major markets around Sydney on their views of the market along with our observations on these areas.
Eastern Suburbs: The East has seen very buoyant conditions in the past six months with some very aggressive bidding at auctions. Peter Starr at McGrath Edgecliff has seen some very strong sales results with prices going well over reserve. Starr believes that we are moving into a more reasonable buying market as the market takes a breath over the winter period. In the high value prestige suburbs such as Vaucluse, Bellevue Hill and Woollahra, there is some activity but nothing that indicates real strength yet. Starr sees the remainder of 2014 as showing good turnover as long as vendors are realistic and reasonable with price expectations.
North Shore: Many empty nesters and downsizers are looking to relocate to the Northern Beaches or Lower North Shore closer to the action of cafes and village life nearer to shopping strips. While the appeal of the Upper North Shore is large homes on leafy blocks close to prestigious schools (and on the major train line), the owners feel their homes have passed their use-by date and need something a little smaller with lower maintenance but enough space for relatives and Christmas gatherings.
Kingsley Yates, Director at Ray White Lower North Shore, said the prestige market $5 million plus is still patchy with no real strength to it. This presents opportunities for luxury home buyers looking to enter this market. However Yates says the market with properties under $1.5m is showing consistently good demand with around 20- 30 groups at open inspections each week.
On the Upper North Shore, Matthew Bourne, Director McConnell Bourne estate agents, has seen a 9% increase in trading volumes over the same period compared to last year. Bourne has overseen sales up to $10m in the most recent 6 months, and sold 74 homes in excess of $2m since July 2013. Bourne thinks most markets have been strong however the best performing market has been the $1m - $2m market. He is averaging about 22 groups per property per week in mid-range, up to 60 groups in lower price points and 5 to 15 groups in top end homes. Bourne sees the North shore market continuing to be stable and steady over the remainder of 2014.
Northern Beaches: This year has seen strong uplift in the median price ranges for most areas. Stephen Bock, at Ray White Manly notes that the number of available properties on the beaches this year is tighter and so that is also helping push sales prices up. Bock said that there has been an increase in the volume of prestige sales above $2m but there has not been significant price growth in this sector. The lower median priced suburbs around $900k to $1m have shown much faster growth and vendors trading up will create more demand in higher price points. On average, Bock is seeing around 10 to 15 groups at open houses each week. Bock says that the rest of 2014 will be similar to the first half although a little more subdued until the volume of property increases in Spring.
Inner West: The Inner West market has always been a consistent performer in our book. Due to its close proximity to the CBD it is in high demand from owner occupiers and tenants looking for value, café culture, a vibrant lifestyle and a shorter journey to work. It is a market that is more insulated from market fluctuations and has consistent demand from a wide range of buyers. Sarah Lorden, Sales Agent McGrath at Balmain notes that there is always strong competition for Inner West properties if they are priced correctly. Lorden is seeing around 25 to 30 groups through a first open if the property has the right appeal and desirable features, but the lack of stock is keeping prices on an upward path.
Overall the Sydney property market still has growth potential for the remainder of 2014, but at a lower growth rate than the past 12 months.
Keep your eye out for our seminars coming up in August where we will tackle the issue of home buyers downsizing or how you can “Rightsize” your next move. Also look out for our next hot property alert with some great opportunities coming soon!
If you are in the market to buy a home or investment property we would love to assist you. Call my friendly team of buyers agents on 1300 655 615 today to get the upper hand in a hot market, or email your inquiry. We would be delighted to help.
Rich Harvey is founder and Managing Director of www.propertybuyer.com.au, Australia's most awarded Buyers' Advocates. Propertybuyer helps property investors and home buyers search and negotiate the right property at the right price, everytime. Visit www.propertybuyer.com.au or call 1300 655 615.
2. Client Stories
Here is some feedback from a few of our happy clients last month:
Ian & Jennifer's Story
"....propertybuyer will save you time and money"
Ian & Jennifer
Buyer type: Investor (3rd purchase with propertybuyer)
Location: Potts Point
Buyer's Brief: Investment property close to the CBD
To purchase a unit with close proximity to Sydney CBD (within 5km) and the harbour. Also access to good public transport. Inspections are very time consuming. You need to live close to the location for open houses midweek and weekends. This would have been impossible given the distance we live from Sydney and other commitments. We were starting to think the difficult buying market would force us to re-evaluate our criteria. Anna was realistic about matching our expectations with the market by showing us alternative properties in various areas.
Anna kept us updated with new listings and potential upcoming listings. We were able to inspect the properties that came up close to our expectations. Afterwards we felt very happy with our purchase which exceeded our expectations in location and quality. It was rewarding to complete the sale other after missing out on two properties at auction. Anna was a pleasure to do business with and a credit to the profession she is dedicated to. Propertybuyer will save you time and money.
".....kept us updated with new and potential upcoming listings"
Buyer's Advocate, Anna Rorke
Ian & Jennifer have several investment properties and were looking to purchase in an inner city location that they were not as familiar with. We looked at several suburbs and attended two auctions unsuccessfully before negotiating a private treaty property in a vibrant location and also had the option to add value.
"...lifted a huge weight off of me"
Jill S, Website Officer
Buyer type: Homebuyer
Buyer's Brief: Appraise & Negotiate
I wanted a two bedroom unit in the Inner West that met most of the criteria on my wishlist. I felt intimidated at the prospect of having to negotiate with real estate agents and lacked confidence in my ability to do so. I was worried that I would be priced out of the market in the area I wanted to live. My search coincided with a rise in housing prices, so this looked likely. My other fear was having to pay more than I really wanted to.
Talking to Anna gave me a better understanding of how the market works. Having to negotiate with agents lifted a huge weight off me. I think I would have either missed out on the property or paid a lot more without her. Afterwards I felt relieved and very happy with the result. I would recommend propertybuyer to anyone who lacks confidence negotiating, or experience in the market, it made everything much easier for me.
"...it made everything so much easier for me."
Buyer's Advocate, Anna Rorke Jill had been looking to purchase a unit for her and her son to live in for some time prior to engaging our services. We helped her negotiate the minefield of data provided by agents and secure a lovely unit without Jill being stressed and uncertain of her decision.
If you are interested in any of the above please contact Jason Low (Manager- Client Relations & Strategy) 1300 655 615 or 02 9975 3311 or email your enquiry to firstname.lastname@example.org
To review the full details of these opportunities you will need to sign a simple confidentiality agreement which protects our interests in the property. If you purchase a property, a fixed sourcing fee will apply.
We look forward to assisting you.