A winning strategy for Sydney buyers this spring

With supply up, most prices still rising, clearance rates down and different areas emerging for the first time as good buys, it can get confusing.  So what are the five things you need to know when buying in the current market conditions?

1. Where you should look

With prices, growth and demand wildly uneven, cast your mind a little further afield for affordable buys. Domain Group senior economist Dr Andrew Wilson says the areas where competition among buyers is at its weakest is West Pennant Hills, North Parramatta, Chester Hill, Connells Point and Avalon for houses, and Hurstville, Waterloo, Lidcombe, Epping and Ashfield for apartments.

If you’re looking for capital growth, many still tip the inner west, while adding in the St George area to the south, suburbs like Sans Souci and Kingsgrove. “Even though we’ve had good growth in the inner west, it’s still a very popular area,” says Byron Rose of buyers’ agents Rose & Jones. And the St George region has many of the same pluses like public transport and parks, but it’s cheaper, suggests Angus Raine of agents Raine & Horne.

2. Work out what you can afford

You wouldn’t fill a supermarket trolley with food and then peer into your wallet to see how much money you have, says mortgage broker Justin Doobov of Intelligent Finance. So why would you spend three months looking for your dream home, and only when you’ve found it would you then find out what loan you can get? “You should always go to a mortgage broker as early as possible, and even more so in these unusual conditions,” says Doobov.

“Not only do you not want to buy something for more than you can afford, but you don’t want to under-buy either. That can be a false economy.”

As a rough rule of thumb, if you’re a first home buyer he recommends adding your monthly savings to your rent (say $2500), multiplying it by 12 months ($30,000), deducting $5000 for the running costs of a property (which leaves you with $25,000). If you assume a 5 per cent interest rate (to allow a buffer), then divide the $25,000 by 0.05, and this will give you a guide of what loan you may be able to afford, in this case – $500,000.

3. What to do when looking for a home

The most important single thing is to work out exactly what you want, says Brian White, chairman of agency Ray White. Think about your priorities, location and maybe what you’re prepared to compromise on, but don’t get too distracted by what this erratic spring market is doing, with changing prices and varying levels of demand and supply.

“Then if you find something that suits you, and you like, buy it!” he says. “Sometimes people might say this is a little too highly priced, and they’ve been saying it forever, but in this market, you’ll soon have made up on the price. The biggest impact on the market comes from interest rate changes, and no one is predicting they’re going to go up any time soon!”

4. How to approach open homes

Since the market is all over the place, it’s up to you to be single-minded, clear-focused and have done all your homework, says Dennis Kalofonos, principal of buyers agents Sydney Property Finders. At every open home, “keep both ears open to find out what other people are saying”.

He also urges buyers to ask the selling agent whether a property will go to auction, for instance if it’s a deceased estate, or whether the vendor would be open to an offer. Also, always make sure you do a building inspection, pest or strata report – or ask the agent if they’re providing one free.

5. Auction bids and making offers

Over the last two years, the rising market has meant more property than ever is sold at auction. “It’s a very competitive environment, so work out your bidding strategy early,” says auctioneer Andrew Cooley of Cooley Auctions. “I encourage bidders to bid confidently and strongly, and I’m a big believer in starting the bidding to let the market know you’re there to buy.”

Graeme Hennessy, chief auctioneer of Premier Property Auctions, also believes it’s important to bid early. Standing at the back of the room will also help you have a good idea of what’s going on, and who you’re competing against. “It’s too easy for the bidding to go on without you, and you miss out,” he says.

Alternatively, if you want to make a pre-action offer, or an offer at a private treaty sale, make sure you similarly do it decisively, advises Laing Real Estate’s Simon Polito. “If you want something, you’ve just got to go for it,” he says. “Last week I sold two properties to people who’d presented their offer on a completed contract with the 10 per cent deposit and a Section 66W attached, to waive the cooling-off period. That’s very powerful!” 

‘It was the house for us’

Lesley Madden and her husband John with their dogs after selling their house in Castlecrag. Photo: Daniel Munoz

The buoyant spring market delivered wins to retired advertising industry PA Lesley Madden on both ends of the demand and supply equation.

On the sales side, she managed to sell her Castlecrag home in September for a price she was very happy with – and then the fresh influx of property on to the spring market presented her with her perfect new home.

“It was amazing as we exchanged contracts on the same day,” says Madden, 68, who’s now getting ready to move into the two-storey, three-bedroom terrace she and husband John, 73, bought in Balmain. “We just walked in and knew it was the house for us.”

The vendor’s agent, Monique Dower of Belle Property Balmain, said Madden pursued the perfect buying strategy for the current market.

“She made a quick decision and paid the asking price for the property. 

She came out with her offer straight away, she didn’t muck around, and so she knew she’d get it.”

Madden also sold her lower north shore home quickly, accepting an offer before auction, so she wouldn’t have to go through the not knowing how much she had to spend on the new abode for the couple, their two Labradors Sadie and Bella, and any of their adult children when they wanted to visit from overseas.

“It’s worked out very well,” Madden says. “We like the look of Balmain and it’s quite exciting. We don’t know it very well, but it’s close to the CBD, the house has a garden area in the courtyard and it’ll be handy for our two children, who live overseas, when they come to stay.”

Feature property

26 Colston Street, Ryde
$1 million +

This spring, many of the areas around Ryde have shown good price growth, but Ryde is still lagging a little behind.

“Suburbs like Putney and Gladesville are now much more expensive, but they still don’t have as much to offer as Ryde,” says Phil Allison of First National Real Estate Hunters Hill, Gladesville and Ryde. “Ryde has good shopping, great road access to the city or Parramatta, buses from Top Ryde, the train station at West Ryde and schools.”

He’s currently selling a two-bedroom double-brick home in Ryde, just around the corner from Top Ryde, that’s been in the same family for 70 years, with a recently updated kitchen. It still has its original feature fireplaces, bay windows and timber floors and window frames.

“It’s extremely well built but it lends itself to further renovation or extensions,” says Allison (phone 0401 224 883) who’s auctioning the property on October 17. “You can use the existing home, or turn it into something even more beautiful.”

The house has a flexible floor plan with the scope to add a third bedroom, a level child-friendly garden and a lock-up garage with parking for two cars.

Or try these:

43 Fontainebleau Street, Sans Souci
About $1.5 million

In one of the areas tipped as offering great capital growth in today’s market, this three-bedroom, three-bathroom house, with a yard and pool set in gardens, looks a good buy. On a 790sqm block, it’s close to the beach, has a formal lounge as well as open-plan living, and is being auctioned October 17 via George Panagopoulos of McGrath Brighton-Le-Sands (0414 454 000).

173 Hargrave Street, Paddington
$1.9 million+

Although this three-bedroom, two-bathroom classic terrace close to Woollahra village is set for auction on October 24, Phillips Pantzer Donnelley agent Alexander Phillips (0418 404 337) would be happy to accept a good offer to suit this market beforehand. The home, with an original marble fireplace, polished timber floors and tiled verandah, has a loft studio over the garage for a home office or fourth bedroom.

27/98 Chandos Street, Ashfield
Offers over $780,000

With Ashfield apartments top of the pops for value, this large three-bedroom unit in the middle of a security block in a quiet, tree-lined street has an open-plan layout and a large balcony. It has separate lounge and dining areas, a modern bathroom and an undercover car space, and is just a walk to transport. For sale via LJ Hooker Ashfield agent Domenic Bucciarelli (0411 199 466).