Five buying tips to make the most of the Sydney market
November 30, 2018 - Blog
Did you know that an average of about 40,000 properties were sold across Australia every month for the past decade?
Of course, a significant proportion of those properties were in Sydney each month, plus the average stats don’t include off-the-plan sales so are technically higher still.
What these numbers mean is that properties are bought and sold every month regardless of the market conditions.
Sellers might need to upgrade to a larger home, or an investor might decide to offload a property in their portfolio – whatever the reason, the fact is that the wheels of the property market keep on turning.
Therefore, with prices softer across much of Sydney and vendors needing to still sell, there are ample buying opportunities to secure great properties for attractive prices.
So, here are five tips to make the most of the current Sydney market.
1 Buying in the same market
Upgraders especially are well placed to make the most of softer prices because they will be buying and selling in the same market.
So, they may sell their current apartment for $1 million in Balgowlah, which might be five per cent less than what they could have achieved last year.
However, they can upgrade to a higher priced house in say Allambie Heights where if the price adjustment has also been five per cent, then the price has reduced by a greater amount.
That means they will also pay less stamp duty than if they had upgraded last year as well as paying a lower price for a premium property.
The caveat is it is best to sell first and then buy because lending is taking a little longer to secure at the moment and there remains solid demand for good properties from savvy buyers, so you don’t want to miss out because of finance issues.
2 Less competition
The reduction in the volume of investors has been well documented, but rather than being a bad thing it is actually rather good.
That’s because fewer investors means reduced competition for properties, which ultimately means a stronger negotiating position.
While sellers are often a little late to the party when it comes to reducing their price expectations, if a qualified buyer is the only one who is interested in their property, well, they’ll have to take a reality check if they want to secure a sale.
3 Better yields
Another tip is that while prices have softened across parts of Sydney, rents have not correspondingly fallen to the same degree.
According to the latest figures from CoreLogic, the median house price in Sydney has reduced by 7.4 per cent over the year to October 2018, but rents have only softened by 2.4 per cent.
What that means is that an investor has more buying power to secure a premium property that is likely to achieve solid capital growth over the long-term while also recording better yields than a year ago.
In fact, CoreLogic figures show gross rental yields have increased by 3.2 per cent in Sydney over the past 12 months.
4 Buying after auction
At the end of 2018 the auction clearance rate in Sydney was hovering around 50 per cent or below, mainly due to sellers not being prepared to meet the market on price.
I had seen a number of properties passed in at auction because too many sellers still had their heads in the property clouds.
In fact, a recent property that had an initial guide price of $1.35 million, went up for auction and was passed in at $1.2 million.
A strategy to implement if the vendor is being totally unrealistic is to wait for the property to pass in at auction and then negotiate with the seller afterwards when hopefully reality has started to sink in.
That same property was then secured for $1.16 million post auction.
5 Expert assistance
Premier locations like the Northern Beaches, the Lower North Shore and the Eastern Suburbs will always be in demand from buyers who want to live there.
The temporary price retraction in play at present means that it is the perfect time to gain a foothold in some of Australia’s most desirable precincts.
Working with an expert can not only ensure you’re securing the best properties for the best prices, but you can also have access to opportunities that have yet to hit the market.
While many people are sitting on the sidelines hoping to be the first person to ever successfully pick the bottom of a market cycle, savvy buyers and investors are making the most of the current buying conditions.
It makes financial sense to be one of them.
If you would like to be one of them and find out how you can take advantage of the current market, please get in touch with STRAND today and ask about our FREE Property Roadmap Meeting to help identify your next move towards buying a property.