In a recent trend across NSW auctions bids are down, which means things are looking up for property buyers across the state.
Almost one-third of Sydney’s home auctions are being passed in. People are starting to dig their heels in when prices are getting too ridiculous, forcing homeowners to lower their expectations if they are committed to selling. That’s great news for those who are looking to purchase a home at auction right now.
CoreLogic issued their preliminary sales statistics showing that November 2017 clearance rate for Sydney auctions are as low as 68 percent per week.
The good news for buyers is that it is normal for this figure to dip a little lower once word gets out. While the data is yet to be verified, at this early stage it appears that there may be a drop in demand for housing. Some auctions having only one or two people bidding.
ANTICIPATING THE PROPERTY MARKET
Anticipating when a trend is about to hit is a tremendous advantage for both buyers and sellers to avoid getting caught out in an unfavourable situation. It’s just a matter of knowing where to look and being in a position to make a move when the time is right.
The data collected by CoreLogic gives an accurate account of auctions across New South Wales. If the final data from last week does actually show that clearance rate of 65%, that would make three straight weeks of 65% or less. This is the point where homebuyers can start to take advantage of the turnaround and make offers on homes that they feel is fair and agreeable.
Rather than a drop in the market, fewer clearances are a possible indicator that the market is starting to settle down after incredibly high prices and high demand over the past four years. It allows the market price and the home value to sit at a more even level, giving a better chance of a profitable return in years to come and more options for families looking for midrange homes.
FEAR OF MISSING OUT
For a while there, people were happy to overpay. The fear of missing out on a home meant that people were clamouring to pay top dollar prices for middle range homes. More and more homeowners were getting excited by the over-inflation and taking advantage or the high demand. Not everyone can afford to manage A-grade prices, especially low-income families and first homeowners. There are great opportunities for potential buyers to approach the real estate agent with a fair price after an auction is passed in.
If home sellers are pressured at auction to lower their expectations and have more realistic prices it would be a positive turn for the market as a whole. It’s more stable, more secure and sustainable.
SYDNEY STILL IN HIGH DEMAND
There are still pockets of Sydney that remain in high demand. While the preliminary statistics indicate that around 65% of Sydney homes were cleared overall, when you break it down by region, it’s clear that the Northern Beaches (at 80%) and the Inner City and Eastern suburbs (at 78%) are still in the seller’s favour.
The biggest falling numbers were in Blacktown where only 6 out the 16 auctions they had on the first weekend of November went through. The listed price for some of the family homes that did not sell were between $700,000 and $800,000.
While it is impossible to accurately predict the future market of any industry, when it comes to real estate it’s good to be on your toes and looking out for times like this where there are few people bidding at auction and a large percentage of homes not being cleared. If you are wanting to buy and waiting for the right moment, it’s worth getting out there and making some inquiries.
Remember, always buy within your budget and talk to a professional advisor if you have any doubts.
Peta Stewart – Certified Practicing Conveyancer