So far 2022 has been a very different year from 2021 for the Sydney property market.
According to CoreLogic, the median Sydney property price has fallen for each of the last eight months to now stand -7.4% below its January peak.
We’ve noticed a lot of would-be sellers are holding off listing their homes and putting off their next property move until the market turns and prices start rising again. But if you’re one of them, you could actually be better off selling now. Here’s why.
The property market is driven by supply and demand
Right now, in Spring, is the traditional selling season for Sydney property – a time when a lot of property hits the market, buyers come out, open homes are buzzing and sales are made. People are keen to make a move before the year ends, and we usually see listings peak around October.
Over the past few years, the property market in Potts Point and the 2011 postcode has been defined by a lack of stock for sale – the number of listings in the past few years has been roughly half of what it was a decade ago.
The latest SQM Research data shows that the number of listings for August 2022 was the same as in 2021 and 2020. But we aren’t currently seeing the sudden rush of listings hitting the market for September and October that we usually do – yet.
So, while demand may have subsided a little, a lack of supply is still putting a cushion under potential price falls. This means that although the median Potts Point apartment price has slipped -4.5% since last year according to realestate.com.au, we haven’t seen massive falls, or even falls in line with median Sydney prices.
Plus, despite today’s falling market, you’ll have locked in most of the gains you made over 2021.
Buyers are also sellers
That said, small falls in the property market can actually be a good thing if you’re selling. Because, unless you’re moving cities or cashing in an investment property, chances are you’ll be wanting to buy another property in the same market too.
This can be a great thing if you’re upsizing because the gaps between properties become much smaller. For instance, if the home you’re currently in is worth $1 million, and the one you’re moving into is worth $2 million, there is a $1 million price gap between the two that you’ll need to fund. If property prices fall by 10%, suddenly the home you’re currently in is worth $900,000 but the one you’re upgrading to is worth $1.8 million – a difference of $900,000.
In other words, the falling market means your move suddenly became $100,000 cheaper.
Quality property still in demand
Despite the gloomy media headlines, the reality is that quality eastern suburbs property is still selling. In fact, we’ve recently achieved several record sales. This includes the $8 million sale of a four-bedroom apartment in The Horizon building (the highest per square metre price ever achieved in the complex), as well as the $6.4 million sale of a three-bedroom apartment on the seventh floor of the Toft Monks building.
It’s also worth remembering that, just as property prices don’t rise in unison, they don’t fall in unison either. There are still pockets of resistance, despite current market conditions.
If you’re lucky enough to own one of these properties, you’ll be selling at a time when prices are still elevated for your property, while most of the market has experienced falls.
Buyers are still active
There are still many buyers out there actively looking and wanting to transact. While ABS data shows that over July 2022, new loans fell 8.5% for housing that’s not the full story. New loan commitments for owner-occupiers fell 7% but remained 39.6% higher than the pre-pandemic levels (February 2020) and for investors, they fell 11.2% but, again, remained 78.4% higher than the pre-pandemic levels.
Patience is key
However, with softer demand, sellers will need to be both more patient through the sales process and more realistic about the price they’re likely to achieve. When prices were rising across the board in 2021, vendors could often take a very optimistic view of their property’s value and the market would rise to meet them.
In a flatter market such as this one, sales often take longer. More properties pass in at auction and buyers often negotiate. That’s clear in the data which shows Sydney’s median days on market pushed out from just 25 days in 2021 to 37 days by August 2022.
But, again, this is very much a two-way street because you’ll be in the same boat buying your next home. You’ll also have less competition and potentially more choice when it comes to finding your next place – meaning you’re also more likely to be able to find your perfect next home.
The right time to sell
The simple fact is that property prices continually rise and fall. Buying property should be seen as a long-term play and trying to time the market often leaves us worse off rather than better off.
The best time to sell – or buy – is always simply when it suits you, your finances and your lifestyle to do so.
If you’re interested in buying or selling in Sydney’s eastern suburbs, including Darlinghurst, Potts Point and Elizabeth Bay, contact my team today.