In the last month, we have seen continual trends supporting our view of the softening in the Sydney property market. The number of properties going to auction has fallen to over 500 from 900 (-44%) last year in the same weekend. We see a number of properties passed in, withdrawn or sold prior to Auction. Auction clearance rates have lowered to a vicinity of 55% (-33%) across the Sydney metro areas, compared to last year of over 75%. We are also seeing 3-4 buyers per open house and a longer period to sell (up to 9 weeks) for properties to be sold.
These trends prevail due to:
- Properties are not being sold due to the fact seller's expectation have have not adjusted down to match the market;
- Buyer's funding has become difficult to obtain from a number of financial institutions, as result of tightening of their lending criteria, longer due diligence and approval time when assessing home loans for both investor and owner-occupier;
- Sellers of property are not in a stressed or distressed financial position thus are not forced to sell;
- Tapering of demand by overseas investors and migrants; and
- Underlying market demand for property is well ahead of supply.
There is no property crash in sight. Demand for property is still strong in the North Shore area, but it is important to price your property prudently from the start, adjust expectations from both parties (it has been a good 9+ years since the GFC) and work even more closely with buyers and sellers to ensure a successful sales process. Feel free to contact me if you are planning of selling in this market and keen to see what your property is worth.
Stayed tuned for next month's view on the rental market, or get in touch if you have any burning questions on the potential of your rental property.
Clara Chan | Principal | Everest Realty | 0411 228 339 | Clara.firstname.lastname@example.org