MONTHLY MARKET WRAP – OCTOBER 2017

  • November 6, 2017
It was a dynamic month for the Sydney property market as trading conditions continued to shift and performance data confirmed that the five year Sydney property boom has ended.

 

The September quarter results indicated that the median house price in Sydney had dropped by 1.9%, with the Inner West declining 4% and the East and Inner City region posting the biggest fall, dropping by 6%.

At ground level, we’ve witnessed the market shifting since April and it now appears the results are reflecting what we were experiencing. We’re now dealing with a pool of buyers who are under more stringent lending criteria and have witnessed fewer other buyers at open home inspections along with a declining auction clearance rate. As a result, the urgency to secure a property is no longer evident as buyers look far more closely at value before making a decision.

There is certainly no need to reach for the parachutes as we’re still recording healthy sale prices. During the month we recorded a peak sale price of $6.5m for a property in Drummoyne, $4.375m for a property in Birchgrove and a host of other strong sales in each price category. When top end prestige properties are trading well, this normally reflects some confidence in the market. This newer market environment is starting to resemble what is traditionally considered to be normal trading and there are many other cities around the country that would be still be pleased with an auction clearance rate sitting at 65%.

There are some genuine benefits to the present market conditions that go well beyond more balanced negotiations between buyers and sellers. As the frenetic urgency to secure a home has dissipated, more options are opening up for people which is a very good thing. For example, we are now having conversations with clients who are content to sell their existing home and secure a lease while they either test another suburb or look for the ideal next property to purchase. Moreover, with less urgency, buyers presently have a fraction more time to weigh up what’s available on the market, assess floorplans, location, aspect and what makes the best sense to pursue. Just having slightly more time does provide comfort as opposed to the intense environment that was in play over the past several years which in many instances applied pressure on buyers to make quick decisions on properties that may not have been ideal.

It’s hard to argue with the fact that rapidly rising property prices create pressure on individuals and families. We saw it first-hand every Saturday at auctions when multiple bidders would attend and bid furiously only to miss out on a property that sold significantly above the price guide. The romance of high property prices may have a feel good element for sellers but we’re all ultimately paying more for the same product, fuelled largely by emotion.

While sentiment about the prospects of the property market may have cooled, we’re still seeing solid activity with quality properties on offer, only now wise sellers have adjusted their expectations to secure a sale. Right now, this is an ideal property environment with buyers and sellers playing an equal role in bringing a sale together, allowing everyone ample time to make smarter decisions.

 

This month’s signature performers:

 

24 Ross Street, Gladesville | Sold $2.2m

 

 

1/15a Blackwall Point Road, Chiswick | Sold $1.56m

 

 

5/24 Alexandra Street, Drummoyne | Sold undisclosed

 

 

3/47-49 Buckingham Street, Surry Hills | Sold undisclosed

 

 

 

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