The Sydney property market is currently experiencing conflicting headlines in the media. On one hand, we’re told that the average property prices are declining at a record rate. On the other, we’re told auction clearance rates are healthier than they have been for some time. The Goldman Brothers at Sydney Sotheby’s International Realty takes a close look at what’s happening in our property market.
EXPLAINING THE HEADLINE FIGURES
Sydney property prices fell 7.8 per cent over 2018, according to the ABS’s official figures, and 9.9 per cent according to a Domain Report.
Nationally, prices also fell by 5.1 per cent – the fastest Australia-wide decline in 15 years.
The figures are in line with what we’re generally seeing in the market right now. Lending restrictions are impacting on property prices and, unless a property stands out from the pack [LINK: article 1] buyers should generally expect to receive less than they would have 12 months ago.
At the same time, though, auction clearance rates have been strong ever since 2019 began. Domain has them at around 60 per cent and realestate.com.au is reporting them even higher at around 70 per cent – that’s usually the sign of a strong market, where demand is strong and prices begin to rise.
THE DIFFERENCE IN TODAY’S PROPERTY MARKET
What we’re seeing, however, is that there are fewer properties going under the hammer. On 16 March 2019, realestate.com.au based its figures on just 325 auctions. That’s well under half the number of auctions listed two years ago at the height of the market.
The Cooley Auctions Index also reflects this, showing a considerable decline in the number of properties listed compared to 12 months ago.
In part, this is because vendors simply aren’t listing. It’s also because agents are often only taking a property to auction when they know there are multiple interested parties. Otherwise, they’re likely to accept a pre-auction offer or rely on a private sale.
But the other factor in a higher clearance rate is that sellers are more willing to meet the market than they were even towards the end of last year. In other words, they have accepted that property prices have dipped and are willing to sell for less than they once would have been prepared to accept.
WHAT’S HAPPENING IN SYDNEY’S EASTERN SUBURBS
Interestingly, we’re still seeing a lot of serious buyers in the market right now. Depending on their price point, they may not have as much to spend as they once did and they’re more prepared to take their time and wait for the right property to come along.
Even serious buyers will often wait for a property to pass in at auction and will be prepared to negotiate hard to get the property that suits them best.
We’re also seeing the market fragment – not necessarily along price points or even styles of property but into individual properties. Run-of-the-mill, standard properties that don’t stand out from the crowd are being discounted. Properties that manage to differentiate themselves from what anything else available on the market can still fetch a premium.
TOP PERFORMING SUBURBS IN SYDNEY’S EAST
One part of the East we’re seeing strong activity in is Double Bay, particularly in houses. This premium harbourside suburb remains tightly held and there is still substantial buyer interest in quality properties.
This is reflected in sales prices. According to realestate.com.au, in March 2019 the median Double Bay home sold for $4,462,000. That’s actually a 4.6% increase on the median house price since April 2018, when it stood at $4,265,000.
Bondi apartments are also trading well, with investors and first home owners competing over stock in this always popular beachside area. Here, realestate.com.au shows the median unit price in March 2019 was $1,170,000, already slightly up from the end of 2018, when it stood at $1,159,000.
MICRO-TRENDS WE’RE NOTICING IN THE REAL ESTATE MARKET
Dover Heights houses have also been performing well, with the average house price lifting 3.7 per cent between the end of 2018 and March 2019 – from $3,880,000 to $4,025,000.
A single street we’re seeing real activity on is Wentworth Street, which runs between Military Road and the cliffs. In fact, we’ve sold three homes here in the past few months and have achieved high per square metre rates.
We’re finding this location is especially popular with Bondi residents who want extra space and a decent backyard for their growing family but also want to stay close to the beach.
Growing families are one of the key groups at play in the market today. A slow market has almost always been a good time to upsize – as price differences between brackets become less pronounced – and we’re seeing savvy buyers using that to their advantage.
That said, the opposite is also happening with downsizers remaining a strong market presence. This is partly because there is a real lack of quality property available for this discerning market segment who demand much more than a standard two-or-three bedroom apartment.
With an increasingly ageing population and an acute shortage of appropriate property, we expect to see more luxury developments in the next year or two in suburbs such as Rose Bay and Double Bay. Expect these to have oversized proportions (more than 170 square metres), as well as multiple views, level access and privacy well above the current standard.
KEY SALES IN SYDNEY’S EASTERN SUBURBS
Finally, we thought it worth highlighting some recent key sales to demonstrate the resilience of certain market sectors.
- 20a & 20B Vaucluse Road, Vaucluse – Sold for over $30M
- 22 William Street, Double Bay – Sold $8M ($2M above reserve)
- 6 Georges Road, Vaucluse – $4.5M ($300K above reserve)
- 20B Tivoli Avenue, Rose Bay – $23M
Contact The Goldman Brothers for residential property advice in Sydney’s Eastern Suburbs.
- Posted by The Goldman Brothers
- On April 8, 2019
- 0 Comments