It’s been a slow start to the year for the Sydney property market as both buyers and vendors adjust to new market conditions.
However, quality and unique properties are still faring well, as are those that are priced appropriately.
While the Sydney property market has certainly cooled from its peak some years ago, the good news is that there are some great opportunities around for buyers. Vendors can also still expect to see a fair market price, so long as their expectations are realistic and they are maximising their property’s unique appeal.
Declines in Sydney and nationally
According to CoreLogic data, the new year began similarly to how 2018 ended, with housing values falling across most areas in Australia. An 0.7% decline in national dwelling values in February took the cumulative decline to -6.8% since values peaked in October 2017.
However, CoreLogic’s home value index results released on March 1st 2019 showed that the pace of declining values had eased slightly over the month compared to the previous two months. And while home values have been falling for almost a year and a half now, nationally dwelling values remain 18% higher than they were five years ago, leaving most homeowners still in a strong equity position.
Reduced buyer activity
The tighter lending conditions combined with overall concerns about the market and the wider economy have reduced the number of genuine buyers in the market. We are seeing buyer confidence increase as sales occur and buyers observe the number of other buyers at open homes and auctions. In a cooler market, both buyers and sellers are embracing post-auction negotiations, with many properties selling in the weeks following auction.
A bounce in the auction market
In February, Sydney’s auction market achieved 50% clearance rates, which was a heartening 10% bounce from the lows of 40% and under seem during October through December 2018. In fact, auction clearance rates have significantly improved this quarter compared to the last quarter of 2018.
Auction volumes have been significantly lower, although this has been offset by fewer buyers in the market. Some Sydney regions performed better than others, with the inner west among the standout performers, with clearance rates of almost 60% in February, according to data from Domain Research House.
Auction clearance rates and volume in February 2019
Sydney’s overall clearance rate: 50.6%
City and East
Clearance rate: 52.3%
Clearance rate: 59.4%
Quality properties still selling well
Despite the softer market conditions, we are still seeing high quality and unique properties holding their own. As an example, we recently sold 60 Rochford Street, Erskineville – a picturesque freestanding 314sqm bungalow with a pool – for a record-setting price for the suburb.
In our experience, those properties that have been price positioned correctly are faring best. Vendors need to accept that there are less buyers in the current market and those who are looking are hoping to find properties at lower prices than those seen in recent years. However, it’s still possible to achieve a fair market prices when these factors are taken into account and expectations are realistic.
Apartments hardest hit
The properties that have been most affected by the downturn in the market is the apartment market. The continuing credit squeeze, increased supply of apartments, reduced foreign investment and possible post-election changes to capital gains tax and negative gearing are all contributing factors.
Median sales price houses $1,400,000
Median sales price units $755,000
Median sales price houses $1,315,000
Median sales price units $765,000
If you looking to buy or sell in Alexandria or Erskineville contact our team today.