Its a Buyers Market / Jalil Wakim featured in Sydney Morning Herald
People wanting to buy a home have reason to celebrate at last with 2016 declared the first buyers’ market of the past four years.
As property prices soften and auction clearance rates are tipped to remain close to a modest 55 per cent, eager sellers are racing to cash in before prices slide further, triggering a buying bonanza.
“The market has finally reached a point where it’s no longer a sellers’ market where buyers were forced to meet their ridiculously inflated prices,” Jalil Wakim, managing director of finance broker Lendfin, says.
Prices are now coming back to much more realistic levels and where, 12 months ago, things sold within a week, buyers are waiting much more on the sidelines to see what happens, and they’re now taking two, three and four weeks to sell. That means savvy buyers are now in a much stronger position where they can negotiate both prices and terms.”
CoreLogic data this week shows that home values dropped 1.2 per cent in December and 1.4 per cent in November; the first time since May 2013 they fell for two successive months.
The auction clearance rate also plunged from about 90 per cent in some areas in autumn to 55 per cent in December.
Domain Group senior economist Dr Andrew Wilson says confidence in the housing market is still strong, with the underlying fundamentals of NSW some of the strongest around.
“But now we’ve got a legitimate buyers’ market in Sydney,” he says. “There’s a bit more trepidation among sellers, particularly with headlines about prices falling, and with such a soft start to the new year, opportunity is certainly knocking for buyers out there.
“There’s motivation among sellers to put their property on the market soon, especially those who have already purchased in the boom market last year and now want to sell for as much as they can. Buyers are now often adopting a wait and see approach and they’ll now have the upper hand in the negotiation process.”
Home owner Peter Svoboda, for instance, put his three-bedroom plus studio house in Mascot on the market just before Christmas, hoping to pick up a buyer over the quiet period.
Having lived in the home at 42 High Street for 24 years, retired potter and occasional Elvis impersonator Svoboda, 69, feels it’s now or never to sell for a good price before downsizing elsewhere.
“We feel it’s a good time to sell now to take advantage of the market that’s been so strong recently,” says Svoboda, who lives there with his wife, Aubrey, 56, and his son, PJ, 21, after his daughter, Audrey Priscilla, recently left home.
“We don’t know what will be happening with prices in the future.”
His agent, Veronica Perez of PRDnationwide, says the home is for sale at about $1.4 million but will be put up for auction if it doesn’t sell beforehand.
“It’s in a great location, so should attract lots of interest,” she says.
Buyers’ agent Rich Harvey, managing director of propertybuyer, believes prices are likely to be softer in the west and south-west, where demand tends to be more sensitive to interest rates.
However, buyers everywhere are likely to sit more on their hands, waiting to see if prices will fall further.
“They’ll be desperately hoping they will,” he says. “A lot of the heat and intensity has gone out of the market now, with the pendulum – Hooray! – swinging back towards the buyers. But they won’t be able to take forever to buy.”
Wilson believes the market will pick up again towards the middle of the year, but, at present, the balance between supply and demand favours the buyer.
Wakim says developers are also pushing to bring forward sales of off-the-plan properties to take advantage of stronger prices, and buyers again hold the cards where vendors have bought a property and still need to sell their current one.
“We are bridging a lot of loans at the moment from people who’ve bought but haven’t yet sold,” he says. “The buyers of those properties are then able to negotiate better terms and/or prices, maybe agreeing to an eight to 10-week settlement in order to sell themselves in the interim.”