Sydney market update: February 2017
Mon March 06, 2017
Welcome back to the latest in our series of Sydney market updates! In this instalment, we'll be taking a look at the current state of the property market, and we'll also touch on a few top tips for buyers and sellers. As always, we spoke with Laing+Simmons Managing Director Leanne Pilkington, so without further ado, let's get into it!
The busy season
As we touched on in our last market update, this time of year is usually a little bit quieter, but that certainly hasn't been the case in 2017. The Australian Financial Review reported an 83 per cent clearance rate over the 18th and 19th of February, with more than $450 million worth of real estate being sold. That's an increase of 10 per cent since this time last year, and Leanne reiterates that it really is a busy time.
"There's more stock coming on the market after the holidays," she said. "There's still a lot of demand, and no indication that things are going to slow down. While that demand is there, the clearance rates and prices are going to stay strong."
Of course, there is still the possibility that the banks could raise interest rates, which will have a definite effect on the number of people who can buy, but perhaps not as much as previously thought. In fact, Leanne predicts that rates would have to go up quite significantly before there is a really obvious change in the market.
However, some of these rate rises will be specifically for investors, as opposed to owner-occupiers. This could have a positive impact in terms of affordability and the types of people who are able to buy in this busy market.
Who is investing in Sydney?
Speaking of investment properties, it's still clear that purchasing a rental in Sydney is a great way to diversify a financial portfolio and make a steady return. Even as the market becomes more and more competitive, some are prioritising the purchase of an investment property over a home to live in. This is because more affordable propositions can be found further afield, but buyers may prefer to live closer to the CBD.
"There are people who can't afford to buy where they want to live, so they are looking at cheaper areas in the city as an investment, or even places in Queensland, and they continue to rent at the same time," explains Leanne.
It's also worth noting that we still have negative gearing, and while there's all sorts of discussion about whether or not this will stay, it does provide an opportunity for buyers to get some tax relief.
A few top tips
So, we know that the market is strong, and that it's an exciting time in the world of real estate, but what does that mean for buyers and sellers? With more stock on the market, and lots of people trying to buy, it can be a bit daunting embarking on the process of either buying or selling. There are so many factors to consider, but what are the truly vital ones?
"People do a lot of research online now, before they go to an agent," says Leanne, "and it's a good idea to understand what else is on the market in your specific area, to know what sort of competition there is and what prices other buyers are offering."
For buyers, Leanne recommends a firm list of 'non-negotiables' whenever looking at a property. These could be anything from school zones to readily available public transport, but having a clear idea of the essentials is critical to making a good purchase. Similarly, for sellers, it's all about doing the research and knowing how much you can expect to get when you do go to auction.
Going to open homes in person can also be extremely valuable, as it will give you the chance to interact with agents directly and get information you may not be able to find online. for example, you'll be able to get a much better idea of what homes in the area are selling for, how much interest or competition there is, and any other facts about a property that you want to know, but may not be listed.
Leanne also reinforces that agents are important for buyers as well as sellers, with buyer's agents making a huge difference to many first time purchasers.
"It makes a lot of sense. It's really hard to buy a property, particularly if you have multiple suburbs to look at, which can take a huge amount of time. There are also sales that happen off the market, and buyer's agents often have an inside running on properties before they are widely advertised."
Regardless of whether you are looking to buy or sell, Leanne's top recommendations are to gather as much knowledge as possible, and to enlist the help of a great negotiator. In a market as busy as Sydney's every little bit of help can make a huge difference to succeeding.
For more information, get in touch with Laing+Simmons today.