At present there is a lot of noise about the current state of the Real Estate market in Sydney, with plenty of speculation that the prices have receded, and plenty more that prices will continue to fall for a varying period of time.
Usually when the market fluctuates aggressively, as it has recently, we can attribute that to a few common things; unjustified price rises, exhaustive amounts of stock on the market, interest rate rise and low buyer numbers.
We can all agree that there has been an unjustified rise in prices recently, but for the most part we still have, or at least HAD, buyers who were prepared to pay these prices and service these loans. The issue has been banks not willing to write these mortgages or a lengthy delay in the pre-approval process, possibly due to the Banking Royal Commission.
There has, only recently, been a higher number of property on the market but this may be simply attributed to longer days on market, not necessarily higher listing numbers. Furthermore, we are still seeing a high number of buyers through a lot of our open homes across the Sydney market.
The interesting thing out of all of this is that Banks and Brokers are still offering low interest mortgages with recent stories covering increased discounts on investor loans as well.
Could buyer sentiment driven by market negativity being blanketed across the media be the thing to blame for this downturn, or is there really a justifiable reason for all of this fear?
Macquarie Bank released reports recently with devastating predictions about the market which would defy market performance over the last 20 and 40 years, but we have seen this before. Revising their original figure of around 4% or 6% to a staggering 15% to 20% drop in prices.
The important thing is to read these articles and research these figures in context with the suburbs and micro-markets you are searching in, when buying. Also, be aware of the local sentiment when selling as some pockets of Sydney are certainly not feeling the full impact of the downturn, at least not as much as others. For instance, Cremorne has seen double digit growth recently and Berowra a couple of percent too.
Good luck out there.
Auction clearance rates at the weekend were low at 41% with 681 properties listed for Auction and 326 taking place, 210 properties were reported as sold under the hammer.
The median sale price for property sold at Auction was $1,252,500.
The North Shore Auction clearance rate was a little higher at 52.5%.
Thomas Merriman.
Figures: RPData and Domain
Thomas Merriman 