March property results set a reliable pace

The Sydney property market settled into a most reliable rhythm throughout March however the disconnect between media reporting and reality on the ground was as wide as we’ve seen in our time tracking the market. Each week and particularly each weekend, the media would gushingly praise the market, emphasise a select group of auctions that sold hundreds of thousands over reserve and even declare that FOMO was back. While some very solid results were achieved during the month, to suggest that the overall conditions are delivering outstanding results across the board is entirely misleading.

The market has clearly split into several categories, with A grade property pushing the positive narrative and drawing in the highest level of buyer enquiry, genuine demand and competitive offers, either at or before auction. Our team experienced this heightened demand with a range of sales during the month, leading the charge with Inner West prestige sales and setting new records in several suburbs. A standout was 3 Temple Street, Stanmore, sold by Jono Hammond and Julie Hatch from our Annandale office for a suburb record of $4.555m in front of a robust crowd and nine registered bidders. It’s clear that quality is attracting demand and the old adage of the cream rising to the top in uncertain times could not be more relevant.

 

While many positive results were achieved during the month, it’s important to also reflect on the other side of the equation, being the second and third tiers of the market, which include B and C grade properties which experienced a far less reliable path to sales success. Throughout the month we monitored many sales that saw price guides adjusted up and down to lure interest, auctions postponed or sales completely withdrawn from the market. The auction clearance rate was anchored between 50% and 55% according to SQM Research data, which suggests that the full market conditions are very delicate. Commentary that surfaced during the month from buyers and agents indicated a belief that this is no environment for sellers to test the market in order to achieve a dream outcome. Instead, this is a market for the motivated, realistic and those who need to make a move for a legitimate reason.

 

Looking ahead, we believe Winter will deliver very similar conditions, with supply and demand a key metric to keep an eye on. Low Winter supply will underpin property prices and buyer demand, however more property coming online is likely to put some downward pressure on the auction environment for anything outside of A grade property. It’s certainly very positive that we’re experiencing steady buyer enquiry, which suggests that there is a purchaser for every listed property, assuming the seller is willing to engage with market feedback. In our view, this is a great time to be in the market and looking to purchase as conditions are largely balanced and there has been a nice stream of new listings becoming available weekly. As always, pay attention to the facts of the market, get through the headlines and you’ll make a wise decision.