When the property market is in the midst of change, buyers and sellers must adjust. The Sydney housing market has been favourable to vendors for several years but the pendulum has swung towards buyers.
House prices fell by 2.6 per cent during the first quarter of this year, with a more modest 0.5 per cent reduction in unit prices.
Several leading market indicators suggest further price deterioration. The auction clearance rate in May dropped to 53 per cent and was weaker in April at 52 per cent. Compare this with the robust 69 per cent achieved in May and 73 per cent in April last year.
Sydney buyers are benefiting from a greater choice of homes, with total stock sitting at the highest level in just over five years.
And then there is the element of days on market. Houses are taking an average of 62 days to sell and units 64 days, spending respectively 15 and eight days longer on the market compared with last year.
This extra time on the market is affecting prices. During the first three months of the year, on average the median house price dropped $344 daily and $38 a day was shaved off the median unit price.
This shows that extra time on the market in current conditions could lead to an adjustment in the market value of your home.
Those homes that languish on the market will often find themselves discounted. Discounting is at the highest level in five years, with houses having 6.3 per cent shaved off the original asking price and units 5.5 per cent.
Sydney’s median house price remains above a hefty $1 million. Photo: Steven Woodburn
The ability to sell your home in a matter of days and achieve an eye-watering sale price has passed. Sydney’s median house price remains above a hefty $1 million, following the 71.8-per-cent price rise that has occurred during the past five years.
But smashing an unrealistic reserve price is a whimsical dream under the current market conditions.
The buyers’ sense of urgency that engulfed the market has been lost. The frantic pace of market growth gave buyers a fear of missing out. Now it is sellers who have a fear of not securing the right deal.
It will be the vendors who understand this new selling environment who will succeed in securing a timely sale. Meanwhile, buyers will be welcoming this change; it presents an opportunity, providing time to ponder a purchase decision and negotiate the price.