In some Sydney suburbs we’re starting to see the first signs of a cooling housing market, but that doesn’t mean we’re about to see the much-talked-about bursting of the ‘housing bubble’.
What we’re seeing is a stabilizing of the market, but there is still plenty of growth. Let’s take a look beyond some of the more sensationalist headlines to see what’s really happening for Sydney sellers.
Myth 1: Boom is always followed by bust
As an increasing number of suburbs passed the $1 million median price mark in 2017, talk of a ‘bubble’ in the Sydney market reached fever pitch, with regular predictions of a dramatic slowdown across the media.
As we’ve moved into 2018, those predictions continue to dominate the headlines. A closer look reveals that most experts are only talking in terms of a possible slowdown in property prices that could take place over the next 12 to 18 months, rather than an immediate dramatic drop.
Myth 2: Sydney’s growth was never sustainable
Reports of ‘unsustainable’ growth were also popular as the steady rise in Sydney property values continued over 2016-17. But here again, a closer look at figures provided by the ABS shows that Sydney’s residential property price increase over the year to September 2017 was actually only slightly higher than the national average.
Across all capital cities, property prices rose 8.3% during the year, with Sydney up by 9.4%. This was a lower rate of growth than that seen in Melbourne at 13.2%. Hobart’s growth may have been the most surprising over the year, beating even Melbourne with a 13.8% increase in property values.
Myth 3: If auction clearance rates drop, I shouldn’t sell
One of the more alarming figures for many prospective sellers is the week’s auction clearance rate—the percentage of properties that went to auction and actually sold on any given weekend. Domain Group reports from early March have clearance rates down from 70% at the end of February to 65.3%. But does this actually mean now is a bad time to sell?
When looking at these figures, sellers should keep in mind that competition for properties, and the likelihood of actually making a sale through auction, isn’t the same in every price bracket and suburb. The price point of your home, its location and the features of the property itself all contribute to its chances of selling, not just what happened at the auctions Sydney-wide last weekend.
When looking at clearance rates it also pays to remember that auctions are a three-stage sales process, with many being negotiated as a pre-auction sale, as well as selling at auction on the day, or after the auction.
Myth 4: Lower median prices means less for my property
What if all the expert predictions become reality and Sydney’s property market does indeed fall over the next year? What would that new real estate landscape mean for sellers?
The fact is that even a 10% decrease in property values would be spread across the city. Some suburbs would still be registering growth while others cooled. It’s important to remember that Sydney is made up of many smaller property markets, each with their own trends, hotspots and points of appeal. This is particularly true for areas outside the city’s inner ring, where values still have much more room for growth.
Of course, it’s important to be aware of movements across your local property market, but don’t let your decision-making be ruled by the headlines. Get advice from local property experts on what’s really happening in your area and make the most informed decision possible when it comes time to sell.