Why Now Is the Best Time for Sydney Homebuyers
The New Year is here and with it are signs that the Sydney market has started the year anew as well.
What I mean by that is market conditions are continuing to moderate following the significant price growth that occurred last year.
According to CoreLogic, the median house value in Sydney increased by 29.6 per cent last year to reach a new record price of $1.37 million. Units also recorded annual price growth of about 15 per cent as well.
Without question, last year was one like no other. For those of us who were actively transacting in the market for our clients – or doing our best to do so sometimes – there were some heady prices being paid.
However, more generally, the strong price growth was due to a confluence of factors and metrics occurring at the same time, with low stock levels being a big part of the equation.
Most Sydney property owners have seen their portfolio value skyrocket over the past year.
And for those who have been active in the local market for five or 10 years, their equity positions are likely to see them with hundreds of thousands of additional dollars at their disposal.
Some property owners are choosing to recycle some of these funds into investment properties, while others are considering whether now might be a better time to purchase a new home – which, in my experience, it is.
Metrics moderating
In the final months of 2021, the heat in the Sydney market started to cool down.
Now, I’m not saying that the market is not still posting sound results because it is, but the power balance has started to ever so slightly shift toward buyers.
We saw this happening in action with low auction clearance rates as well as an increase in the volume of listings for sale.
Likewise, the time it takes to sell a Sydney property is beginning to increase as well, with the latest CoreLogic data showing that median days on market for houses in Sydney has increased to 32 days from 27 days three months before. Likewise, the median days on market for Sydney units is now 38, up from 36 days, over the same period.
At a professional level, agents are calling us again trying to drum up interest in one of their listings – last year, it was only our strong agent networks that got them to return our phone calls at all!
The market is in an interesting phase, which always happen when conditions shift from booming to one that is more balanced.
That is, it does take a while for vendors to catch up with what buyers are prepared to pay, which is part of the reason why days on market are increasing.
Homebuying opportunities
However, property buyers who are keen to purchase their next home are better placed this year than last year to make their dream a reality.
Not only are there more listings on the market there are also fewer active buyers on the ground.
Part of the reason for that is the sheer volume of properties that were transacted last year.
According to CoreLogic, sales volumes climbed to an estimated 614,635 nationally in the past 12 months – the highest level in almost 18 years.
This means that many buyers brought forward their buying decisions last year for a variety of reasons with FOMO unfortunately being one factor.
People were paying some silly prices because they were fearful of missing out on the “property party”. Alas, only time with tell whether the price they paid stands up to scrutiny is more normalised market conditions.
Sydney homebuyers this year are likely to benefit from more stock to choose from as well as fewer buyers to compete against. Plus, they will be buying and selling in the same market conditions.
It is for reasons such as these that I believe this year is a far better one for Sydney homebuyers than last year which, let’s face it, sometimes made little sense at all.
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