The Sydney property market is changing pace at the close of May 2017. Homebuyers and sellers need to take this shift into account when making their next move. Read on for my key Sydney property market tips.
Market snapshot
At auction, we are seeing less aggressive bidding in the Sydney market and more properties coming on for sale. Though properties are still attracting competitive bidding, with more housing stock, comes more choice for buyers and greater competition for vendors.
The Sydney market has been in a boom period for about four years with auction clearance rates consistently reaching above 75 per cent. The Agency’s Sydney clearance rate, since launch February 01 this year, sits at 91 per cent. The change we are seeing over the last month is a levelling towards ‘normal’ market conditions – where there is a more balanced number of buyers and properties.
What does this mean for prices?
Over the last few years it has not been uncommon for an owner’s price expectation to be exceeded by up to 20 per cent. With the boom passing we won’t be seeing the continual increase or record prices every weekend.
This observation is backed by the latest CoreLogic data that shows a - 0.40 per cent change in the average home value for Sydney at the close of April and - 1.32 per cent change in the average home value at the close of May 2017.
Why the shift?
In close to three decades of real estate experience the only thing I have seen slow the market is interest rate changes. And while the Reserve Bank has kept the cash rate at 1.5 per cent since August 2016, there has been an increase in interest rates for both investors and owner-occupiers by the four major banks. This is a flow-on effect from regulatory changes, including the Australian Securities and Investments Commission’s surveillance of interest-only loans.
What’s next?
Spring is not far away and if you are considering selling, now is the time to start preparing. There is an argument for selling prior to spring when there are less properties on the market and hence less competition. Vendors often shy away from selling in winter, though historically high prices have been achieved due to the reduced competition. It is a good idea to let your agent know if you are thinking of selling as we still have many buyers on our databases.
Two recent record breaking sales I would like to highlight are 14 Wilson Street, Maroubra and 21 Dalmeny Avenue, Rosebery. Designed by architect Tim Wright, 14 Wilson Street sold prior to auction within the first two weeks of its May campaign and broke a Maroubra price record. While 21 Dalmeny Avenue went $350,000 above reserve at auction and equalled the Rosebery price record at $3.35 million, both Rosebery records were set by The Agency’s Brad Gillespie.
Vendors should to listen to all reasonable offers they receive, it may not be at a premium, but if you are looking at buying and selling in the same market it’s all relative.
A tight rental market
According to the latest REINSW figures, the average vacancy rate across Sydney has sat at 1.7 per cent for both March and April this year. This extremely tight rental market has resulted in an unusual phenomena – tenants are going above and beyond to secure a lease. The Agency’s National Director of Property Management Maria Carlino explains, “our opens are extremely well attended and applicants are even supplying ‘tenant resumes’ to secure a lease in this market”. Despite the demand, it is still important each tenant is taken through The Agency’s careful tenant assessment process.
The Agency business update
We are thrilled to have received such strong support from the Sydney market, which is reflected in The Agency achieving more than $163,853,000 in residential sales since February 01, 2017.
The Agency team is growing rapidly and we have been attracting elite agents from across Australia. In Melbourne, Peter Kakos has taken the helm as General Manager of Victoria and locally big industry names such as Damien Bickmore-Hutt and Michael Rava have joined the Sydney team.
Buying off the plan
According to Steven Chen, The Agency’s Director of Projects, the level of enquiry and uptake on our off-the-plan products has been extremely consistent – “this is both locally and internationally”, Steven explains.
The Agency Projects division is moving full steam ahead, particularly in the Gold Coast market, with the procurement of two major developments.
“We are representing Northcliffe Residences by Chinese firm CNQC International Holdings Limited, this is an absolute beachfront project worth $113 million in gross revenue,” Steven says. “We are also working with Shanghai-based firm SPG Holdings, managing the release of stage two of the Robina project called Cambridge Residences.”
The Cambridge Residences comprises 227 apartments and is valued at $210 million in gross revenue. “As a result of our entry into the market on the Gold Coast, the Projects division is about to secure another $1.4 billion in projects, which will see the business unit deliver an exceptional line of product over the next two years to the local and interstate markets.”
Steven Chen continues to build The Agency Projects team across Sydney and Melbourne. In the next quarter, there will be procurement of another $600 million worth of projects across NSW and Victoria, including a landmark Melbourne CBD development.