MONTHLY MARKET WRAP – MARCH 2018

  • April 5, 2018
During March we started to see the real 2018 property market reveal itself.

 

With consistent weeks of new properties being listed, auctions conducted and plenty of buyer movement, it was the first month of the year that the market established an identifiable rhythm. We discovered a great deal during the month, the most obvious fact being that so far 2018 has been a buyers’ market.

It has become evident that buyers are operating at a different pace and are no longer feeling a sense of urgency to commit to purchasing a property. This change in attitude means that in many cases, sellers have had to adjust their price expectations to meet a buyer pool that has become price sensitive and very selective. If value is recognised, buyers will engage in order to secure the property but we’re not seeing four or five eager buyers per property as we were last year. If anything, we’re seeing one standout buyer per property with additional secondary interest a few percent below the most interested party’s price.

When compared to the same period in 2017, the auction clearance rate has declined from an average of 78% to 62%. This said, a third of all auctions are not being reported as agents either don’t report the failed outcome or continue to work behind the scenes to secure a sale post-auction. When we look at the revised clearance rate which is released a few weeks later, Sydney auctions are recording a clearance of just 50%.

These results highlight that we’re in a buyers’ market and sellers have to adjust their price expectations to secure a sale. As recognition of these conditions filtered through the market and media, we saw a swift response from genuine sellers who hit back with reductions of around 5% across the board to meet buyer expectations. When this happened, we saw a much higher level of buyer engagement and sales occurring.

The question being asked now is where are we in this property cycle? Are further price reductions likely, have we hit the bottom or will the market improve after this mini correction? From the evidence before us it appears that buyers remain hesitant, in part hampered by ongoing bank tightening and in part market sentiment. It appears the surging Sydney property market simply became unaffordable and we’re due for some downtime. The good news is that there is nothing dramatic occurring – it’s simply a slow moving, easing environment which allows for all of us to adjust to the new pace.

 

Investor outlook

 

If you’re looking to invest in property, we believe that the current buying environment is the best it’s been since 2012. We’re seeing far less competition at auctions and with price reductions evident, rental yields are starting to improve. We’ve always held the view that the Inner West still has so much potential with extensive infrastructure occurring around the region to cope with the rapidly increasing number of residents. We have an excellent selection of houses and apartments in key locations which are ideal for leasing and longer-term capital appreciation. Make sure you check out our website ch.com.au

 

This month’s signature performers:

 

3/24 National Street, Leichhardt – Sold $1.45m

 

 

51 Trafalgar Street, Annandale – Sold $2.03m

 

 

56 Elliott Street, Balmain – Sold $2.33m

 

 

21 Darvall Street, Balmain East – Sold Undisclosed

 

 

30/18 Drummoyne Avenue, Drummoyne – Sold Undisclosed

 

 

21c/14c Wolseley Street, Drummoyne – Sold $1.33m

 

 

54 Victoria Road, Marrickville – Sold $2.05m

 

 

116 Homer Street, Earlwood – Sold $2m

 

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