Is Sydney a True Buyer’s Market? Here’s the Scoop
Ah, Sydney. The city of stunning beaches, iconic landmarks, and property prices that make your wallet cry. For last few years, if you were a potential buyer in Sydney, you probably felt like you were on the losing end of a bad joke.
Prices skyrocketed, auctions were fierce, and finding a decent property was basically like searching for a unicorn –especially the one’s who deep dived without a buyer’s agent…whoops… (we had to chuck it in there at some point!)
But recently, things have shifted. The market's been cooling off — So, is it finally a buyer’s market?
What Exactly is a Buyer’s Market?
Put it simply, a ‘buyer’s market’ is when supply outweighs demand. More homes are available for sale, and sellers are eager to offload their properties. This gives buyers the upper hand, as they can negotiate prices, ask for inclusions (hello, the fancy fridge!), and generally walk away with a better deal.
A "seller’s market," on the other hand, is when the opposite happens—demand outpaces supply. It’s a fierce competition, prices soar, and buyers end up in bidding wars that can sometimes feel like getting ready to take out a second mortgage.
The Current Sydney Market
So, where does Sydney sit right now?
Here are the key players affecting the market:
- Interest Rates: The Reserve Bank of Australia has been cranking up interest rates to combat inflation, which makes it harder (and more expensive) to borrow money. Fewer buyers can afford to fit the numbers. The cost of a mortgage has been high, so buyers are being more hesitant.
- Price Adjustments: After years of rapid growth, we are starting to see some value in the market again, especially in areas that were previously out of budget. Some sellers are lowering their expectations, but many are still holding firm on asking prices. It's all bit of a dance - buyers trying to secure a deal, and sellers hoping their property is still worth top dollar.
- Vendor Motivation: With fewer buyers at the table, those who need to sell are willing to negotiate. That said, it’s not always the case. You’ll still find sellers holding out for their dream price – this may be one of those rare times when we push for auction all in order to create transparency in the market and more so that the vendor can be conditioned to the current market.
- Stock Levels: We have been seeing a steady increase in stock levels with total listings in Sydney up 18% on last year. The exception to this is prestige family homes and downsizer apartments which are still in short supply in Sydney, which is keeping competition and prices high for these properties, many of these properties are trading off-market. You may have heard that we are in a ‘patchy’ market, this is precisely what means - a patchy market means that there isn't a uniform trend across the Sydney market with ups and downs depending on specific locations and property types - good quality properties in blue-chip suburbs are still very much in demand and are performing well whereas Tier II properties are not performing as well as they were 12 months ago and there are some bargains to be had.
So, how much of a Buyer’s Market?
We say a buyer-friendly market, with a few caveats.
If you're looking to buy in Sydney, you might be able to snag a property for less than what it would’ve cost last year so buyers definitely have more wiggle room when it comes to price, just don’t expect sellers to just give their homes away.
You may have recently spoken to a selling agent who had sent out “20 contracts from First Open” and while this may be true, there’s not a lot of action at the pointy end. The real question or our job as a buyer’s agents is to find out is who out of the 20 will turn up to auction with a bidding card on their hand or have an offer in writing. We think the current market has more non-committed buyers than the real deal - this is not necessarily in the hands of the agent either, it’s just that buyers are circling around the waters with no intention to strike. Committed buyers, including first home buyers should be taking advantage of this.
The Bottom Line
Sydney’s property market is currently in a transitional phase, and this may take longer than expected to fully play out. While it’s not the buyer’s paradise some might have hoped for, it’s definitely a lot more favourable than the peak frenzy years.
While we hold out for an interest cut early next year - persisting inflation concerns, economic growth and global shakedowns now that Trump’s back in his seat may force the RBA to sit back and watch. After all, the Reserve Bank of Australia as we all know is the patient type, checking to see if their previous move has done the trick.
In the meantime, if you've got the right budget, the right expectations, and the ability to strike while the market is still in this transition, you’ve got a solid bargaining chip on your hands.
Ready to make a move? The Sydney market may just be starting to tip in your favour.
Reach out to the team at SydneySlice for an initial discussion!
