Sydney Real Estate Returns To A Level Playing Field

After a long period of skyrocketing prices, in 2018 we’re beginning to see signs of a return to a more level playing field in Sydney real estate.

While the eastern suburbs will remain protected from any major fall in property values, the fact is this cooler market does offer benefits for sellers as well as buyers.

Market changes in the eastern suburbs

Since our eastern suburbs market snapshot was released in 2017, auction clearance rates across Sydney as a whole have started to level out at around 60%. There are a number of reasons property is spending more time on the market as 2018 unfolds, including tighter restrictions on lending and an easing in the supply issue that made these areas so difficult to break into in previous years.

But as always, the picture in the east is still slightly different to that seen in the rest of the city. According to Domain Group data released in April, clearance rates for the majority of suburbs in the east remain above average, currently sitting at around 65%.

The benefits for buyers: less competition on auction day

With lending restrictions now keeping overseas investor activity to a minimum, eastern suburbs buyers are finding many suburbs across the east are a little easier to bid for. But our warning to buyers would be not to wait, assuming that prices will continue to fall. According to the latest CoreLogic data, Sydney prices have dropped 3.37% year-on-year but only 0.36% month-on-month in April 2018, which means further dramatic decreases in value could be unlikely.

The benefits for sellers: more choice once your property sells

A highly competitive market is obviously beneficial to sellers in terms of their own property’s value, but what about breaking back into the market once your home has sold? Over the past few years, we’ve seen many sellers holding on to high-value properties for fear of having nowhere to go, especially if they want to stay in the east. Now, sellers are much more likely to achieve strong results at auction and also be able to make their next move and find a home in the area they truly want.

Why experienced agents prefer a fair market

It’s easy to assume all real estate agents prefer a market where steadily rising prices are the norm, but the fact is that almost anyone can sell property when the market is booming. In a market showing sustainable growth, experienced agents know that their ability to give honest appraisals, their communication skills and their ability to negotiate are all valued by buyers and sellers.

What does the rest of 2018 have in store?

The question eastern suburbs buyers and sellers will be continuing to ask themselves this year is: will property values continue to fall? According to NAB price forecasts for Sydney property values as a whole, we could see up to 3.4% decline for the rest of 2018, followed by a further 1.2% in 2019.

But it’s important to remember that these changes come after the Sydney market reached historic highs, with median values in the city still almost $150,000 above those seen in Melbourne.

We continue to stand by our 2018 property prediction that the eastern suburbs will outperform most of Sydney, even as the market equalises.