More buyer confidence is appearing in an optimistic property market
The start of 2019 has revealed more optimism from buyers, as well as good opportunities for sellers.
Despite a softer market across Sydney and NSW, there are some great benefits for both buyers and sellers in today’s property market, so let’s take a look at how the situation stands now.
A more optimistic property market for 2019
The price drops in the back end of 2018 were great news for keen buyers ready to jump on the opportunity of a more affordable property, but the uncertainty of the market left many sellers waiting to see how it would play out first.
But it seems like that’s all changing in 2019. Our agents are seeing more people at open homes, renewed confidence for buyers and some great sales that benefit both buyers and sellers. This burst of energy is backed up by November research from Westpac, which showed a sudden 11.8% increase in the number of Australians who thought it was a good time to buy property – reaching the highest figure since early 2015.
What’s happening in the Sydney property market now?
Sydney is where some of the biggest price drops have recently taken place. REA Group’s January 2019 property report says that prices have fallen 6.7% since the market’s highest point, with another 5% or so predicted for the first half of the year.
This brings the overall median price down to $840,000 in January – $955,000 for houses and $720,000 for apartments. But longer-term – even over 3-5 years – there’s still been excellent growth and sellers can still get a great deal if they’ve owned their home for a few years.
Lower prices and better value for buyers
The major win for buyers is clear – properties are a little cheaper, making it more affordable to purchase a new home, or to get a better property for the same amount. And the price drop doesn’t need to be huge to make a big impact.
For example, if you buy a home for $750,000 after a 5% decrease, the money you saved will cover your $29,500 stamp duty with some cash to spare.
The benefits of a buyers’ market
Beyond the prices, this market also makes for a more relaxed environment that’s easier to break in to. There’s less competition from other buyers, more choice in available properties and more time to consider your options. This also makes it a particularly good time for first home buyers to enter the market.
Why now’s actually a great time to sell
Vendors are understandably cautious at the moment, waiting to sell until they see prices stabilising again. These sellers are often focussed on maximum sale prices, or just reducing losses, but it’s important to look at the whole picture. If you’re selling into a flatter market, you’re also buying your next property in the same market and benefitting from the price drops. It’s really not something to worry about when considering if you should sell, as long as you’re re-entering the same market.
The best time to upgrade
The benefits for sellers are even better for those looking to upgrade their homes. In the peak of the property market boom, high growth rates meant that a bigger home was a significant financial step up. But as prices decrease across the board, the gap between your current home and the one you want to buy reduces.
For example, at the start of 2018, the median house price in Sydney was $1.17m and the median apartment price was $755,300 – that’s a $414,700 difference if you’re upgrading. Now, the gap is only $235,000 as the median prices are $955,000 and $720,000 for houses and units respectively. It’s much more attainable.
A changing market can throw up questions and possibilities. Contact your local Laing+Simmons office for professional advice.