Conditions are the best they’ve been in a decade!
While the softening Sydney real estate market is scaring off many buyers, smart buyers and property investors know that now is time to snap up a bargain. Here are five reasons why the real estate market in Sydney is the best it’s been in a decade.
1. Down, down, prices are down
According to CoreLogic data, Australian dwelling values fell 4.8 per cent through 2018, marking the weakest housing market conditions since 2008. The year that was showed consistently larger quarter-on-quarter decline in Sydney and Melbourne. In some parts of Sydney, we are now seeing prices down as much as 20 per cent from their peak. While it’s impossible to perfectly time the market, prices could drop another five per cent by the end of 2019.
2. There’s less competition
Remember the days of turning up to view a property and finding it looked like a party was in progress with would-be buyers lined up out the door? Not so any more. With a lot of buyers running scared, it’s the perfect time to buy real estate in Sydney – less competition means lower prices. Following the Banking Royal Commission findings, banks have significantly tightened their lending conditions, which has considerably reduced buyer activity.
3. It’s a buyer’s market
With less buyers in the market it’s an ideal time to negotiate a better price. Make sure to do your homework both about the property and what other similar properties have recently sold for and use this as leverage. Hold your ground, be willing to walk away, and know that there are deals to be had if you’re patient and firm in your negotiations. Remember that the good properties always have more than one buyer interested, so you need to evaluate the property and move quickly before someone else snaps it up. Get professional help from a buyer’s agent if you can.
Scoring a top-quality investment at a bargain price will pay off big dividends in the long run. Plus, it’s always better to have one on your side, rather than one working against you.
4. The playing field has been levelled
The tighter lending conditions are hitting investors hard, with new restrictions by the Australian Prudential Regulation Authority (APRA) aiming to limit lending to heavily investors, while minimising the impact on homeowners and investors. Because investors are often the main competition for first-time buyers, this reduced investor competition makes life a lot easier for those seeking an affordable entry point into the market.
5. A history lesson
You only have to cast your mind back a decade to see the wisdom of buying now. When the GFC hit, it was the savvy cashed-up investors who were buying while others were selling or running scared. Those who bought then are certainly laughing now. The market will inevitably rebound and those who have capitalised on the short-term downturn will be amply rewarded in the long-term. In its Residential Property Prospects 2018 to 2021 report, economic forecaster BIS Oxford Economics predicts that Sydney’s median house price will bottom out at 8 per cent below its June 2017 peak before turning up again.
6. Act fast when you find a bargain
Our assessment of the current market, given what we see from the 10 or more auctions we attend weekly, is that despite the softening conditions, good properties are still selling above the reserve price. These are the properties that have strong fundamentals such as being located close to public transport, schools, shops and major infrastructure with potential for capital growth.
WRITTEN BY: RODNEY P MCLOUGHLIN