Sydney Market 2nd Quarter 2014

Paul Wilcox
Wow – haven’t things changed since our last newsletter. Winter is officially here, school’s out for the next few weeks, and the property market is now entering hibernation preparing itself for the traditional Spring selling season.

Our buyers team can report that there has been a change since our last newsletter, this change is slowly being recognised/acknowledged by the media, selling agents have also noticed it, and in fact we can trace this back to Super Saturday auction weekend after Easter where a record 1100 auctions were conducted in Sydney. The main markers of this change is the reduced auction clearance rates (82% down to 75% reported), less buyers through open homes and those buyers being more selective in what they wish to act upon. Long gone are the days of last year/early this year where buyers seemed hell bent on setting new record after new record just to secure their own property, which we referred to in the last newsletter as the “hot house phenomena.” How quickly the market can & does change!

A great example of this change can be shown in one of our recent purchases in Balmain. We worked for an extended period with one of our owner occupier clients that came to us with a challenging brief & budget. During the search we found it difficult to source suitable properties within the acceptable range. We did find a great terrace that offered city skyline views in a brillant location within walking distance to great cafes and local village shops. Sensing that this would be favourably regarded by asute purchasers we moved quickly and offered the agent an unconditional contract with full deposit only to have the vendor (whom had already settled on another purchase) reject this outright. Fast forward to 2 days before the auction, we received a call from the office to see if we had purchased elsewhere, in short we exchanged contracts later that night for a price $35,000 under our appraised value and more importantly under the clients (tight) budget. Just this last week I have seen 2 other properties either pass in on a vendor bid, or be changed from an auction campaign to a private treaty (with a listed price under the agents auction quote guide).

Where does this leave buyers in the Sydney market place at the moment? Interest rates seem to be staying at their current low levels so that should provide the positive stimulus to attract buyers to make purchasing decisions, so now, the time has come again to wear out the shoe leather by constantly inspecting as many properties within your budget/brief and take advantage of the current climate. Remember to take detailed notes (dates inspected, price guide, amount of buyers inspecting etc.) and then continue to follow up and record the end result (sale price) of properties you’ve seen but decided not to buy. Our take is that Sydney will now settle down into an environment of stable growth (slow and steady) remembering that the rapid increase we have come through has been catch up as the last good growth that we have seen was back in 2002-2003 plus a small period back in 2010.