Why there are no unicorns in the Northern Beaches property market
September 30, 2020 - Blog
There appears to be a disconnect between market reality and market dreaming for some potential buyers in the Northern Beaches property market at present.
Of course, the pandemic has created unprecedented uncertainty for all of us, but that hasn’t resulted in falling property prices in this eternally desirable part of northern Sydney.
For example, the median house prices of suburbs in the Northern Beaches property market have increased by double digit percentages over the past year, including price growth in recent months, too.
Major lenders have also revised their property market forecasts to reflect far more positive outcomes post-pandemic recently.
The 2020 PIPA Annual Investor Sentiment Survey has also showed an increasing number of investors keen on investing in Sydney over the next year.
The survey found that 18 per cent of investors see Sydney as offering the best property investment prospects, up from 14 per cent last year.
However, to make the most of future capital growth opportunities, buyers need to be realistic about the current market and especially consider these four important points:
1. Unrealistic expectations
As I’ve mentioned above, many potential buyers believe they can currently bag a bargain in one of Sydney’s best postcodes because of the pandemic.
They have a number in their head that has more in common with a property unicorn than a potential real estate transaction in the present market conditions.
Some people are looking for superior properties within a certain price range, but when they don’t find any, they blame the low volume of stock on the market.
The truth of the matter is that the property that they are searching for in that price bracket simply does not exist.
2. Northern Beaches property market truth
The market value of any property is what someone is prepared to pay for it – regardless of what is happening at a local, national, or international level.
Because of the historically solid buying demand from property buyers in the Northern Beaches property market, this means that there is usually strong competition for on-market listings, which drives the sales price up.
This is currently the situation with sought-after properties regularly selling for more than their listed price range.
Unfortunately, some buyers are only conducting research on what is for sale and not what has recently sold, which is warping their understanding of current market conditions.
3. Budget reality
On top of this misunderstanding is a misconception about how much property bang they are likely to get for their buck.
Some potential buyers are looking online at listings and dismissing them automatically because they are substandard to their often long-list of must-have attributes.
Perhaps it’s not in the exact street they desire to live in or maybe it needs a coat of paint or a new kitchen.
Rather than compromising on some features, they simply move on to the next listing, hoping to find a property that ticks all of their boxes while remaining within their budget.
Alas, this often results in them forever seeking a mythical property that just doesn’t exist – even when there is a more normal volume of listings available.
4. On the ground research
A key part of our professional services to clients is on the ground research.
This means that we physically inspect properties during the Search phase of the buying process.
Walking through prospective properties not only allows us to compare properties more accurately, we are also able to talk to sales agents about any other listings they may have coming up.
Off-market sales can happen in all market conditions and can provide an opportunity to secure an ideal property for a fair price, that wouldn’t have otherwise been available.
Note that I didn’t say bargain price, because when you are buying quality properties in a popular area, the seller usually knows full-well the value of their asset.
It’s difficult for homebuyers to learn about off-market or pre-market sales, and it can be even more tricky for them to negotiate the buying of one.
On the other hand, buyers’ agents have access to this information and expertise nearly every day of every week.
The Northern Beaches property market will continue to be in strong demand in the months and years ahead.
The buyers who will benefit the most are the ones who recognise that it’s better to buy when they have the finance and are ready to go – rather than wait for some sort of utopian market conditions at some point in the distant future.
If you are currently looking to buy a property in the Northern Beaches property market and can’t find what you want, get in touch with STRAND today. We can save you time, stress and money through the whole buying process and help you find and secure your ideal property.