April proved to be a delicate month for the property market

As anticipated, April was a disrupted month for the property market, with an early Easter rolling into school holidays and ANZAC Day. As a result, we witnessed some buyer hesitancy and a choppy auction market that saw the Sydney clearance rate anchored in the very early 50 per cent range for the month, according to SQM Research. While many indicators in April suggested that buyer urgency and demand were delicately poised, the media seemed to be overly positive, which in our view wasn’t a true reflection of how agents were experiencing market conditions. Perhaps it was the CoreLogic data that continued to reflect very marginal monthly property price gains in Sydney or the few weekend auction results that were well above the reserve that generated such media confidence.

In our assessment of the April market conditions, we saw reasonable buyer movement and activity, however the depth of ready-to-perform buyers per property was not that strong. The exception to that rule was for marquee property in all areas, which continued to drive strong demand and competitive interest. An example was 6 Simmons Street, Balmain East, which attracted more than 100 buyers to the inspections, 15 issued contracts and nine registered bidders on the day who drove the sale price well past the reserve, and for good reason. The original 1970s property was perfectly positioned with north-facing water views, secure garaging, 240sqm of internal space and scope to add further value. Aside from impressive outcomes such as this, the vast majority of April transactions seemed to be negotiated with one or two key buyers before the auction. In fact, there was one April weekend that failed to deliver a single sale from nine scheduled auctions.

Interestingly, the supply of new listings is quite tight, which would suggest that buyer demand should be increasing, however it’s not quite playing out that way. There was growing chatter throughout the month that the cash rate may not be cut until 2025 and it’s possible that the RBA may have to hike rates once more given that inflation seems to be rising once again. We’re already working our way through a tricky financial period, so it’s understandable that buyer confidence is on a knife’s edge. It’s apparent that sellers need to maintain a very realistic view on value and set their campaign up correctly. There is sound local evidence that many agents are over-promising outcomes to potential clients and as a result those sellers are having a torrid time chasing the market down to find a buyer well after their original auction date.

We remain positive about the property market, which has already absorbed the rapid rate increases, cost of living and building cost increases to be holding firm. We suggest that the weaker auction clearance rate and buyer hesitancy are mostly the result of some ambitious price expectations, which, if slightly softened, would see a better clearance rate, less time on market for sellers and improved overall buyer confidence. However, many smart buyers enjoy these conditions as there is less intensity to secure a property and more favourable terms can often be negotiated. So, as we enter the cooler months of the year, the table is set for an intriguing period of negotiation between buyers and sellers, with a sensible approach set to deliver the best returns.