A changing market

What does a changing market mean?

The real estate market has been a hot topic of late with many wondering what rising interest rates and the changing market means. Whilst average prices have still increased, broader market data including clearance rates, shows that we are past the peak and in what is referred to as a changing market.

Across the quarter, according to CoreLogic, Sydney house prices grew just 0.3%, the lowest increase since March 2021. Closer to home though, prices were more buoyant with single digit growth recorded across thirty suburbs within the Sutherland Shire. It is important to put into context that the changes we are seeing, like lower clearance rates, are normal after a ‘boom’ period and are healthy signs that the market is stabilising after record growth over the past eighteen months.

How will the market changing impact sellers?

Even with the market now stabilising, properties are still selling quickly, in most cases within forty days, due to a continued limited supply of properties for sale. Stock as predicted has marginally increased, but listing numbers remain well below average and aren’t expected to change significantly at least until late June/July or the start of the spring market. Whilst the RBA has risen the official cash rate to 0.35%, most buyers have already factored future rises into their budgets with brokers and banks means testing borrowing capacity at interest rate levels well above what’s available in the lending market today.

Buyer demand

There are still plenty of active buyers with many having missed out on multiple properties late in 2021, but the playing field has levelled out. In some instances, the sense of urgency to secure a property ‘now’ has cooled off and buyers are more mindful of paying too much. We’ve noticed this shift with buyers willing to negotiate with sellers who have set realistic price expectations, but with properties priced too high, they are willing to wait or look elsewhere.

Getting the price right

In a stabilising market, it is important to set the right price guide from the start and to be realistic of your expectations to avoid disappointment. Sellers should always remember that buyers are looking for ‘new listings’ and it is the first three to four weeks on market that a home will typically generate the maximum amount of buyer interest.

Presentation is becoming more pivotal with buyers less forgiving regarding small and large imperfections. In any market the key to creating competition and selling for a higher price is to create an emotional connection between more than one buyer and your home. Removing barriers is also helpful. Investing in building/pest or strata reports that are freely accessible, is a good place to start.

It is highly beneficial when looking to sell to not only engage with a reputable agent who can advise on price, but also to attend open houses of properties similar to your own, to get a real time insight on how your property compares. It will also allow you to verify the price ranges you receive from any agents you are in contact with.

Changes to first home buyer’s incentives

We expect properties on the lower end of the market will increase in popularity off the back of rising unaffordability, an increase in the number of investors and the recent government increases to first home buyer incentives. The government recently announced a number of changes with the intention to help more younger Australians enter the property market.

First Home Guarantee

The government has announced an increase to the price cap threshold to $900,000 in Sydney effective from July 1, 2022. With 35,000 applications each year up from the current 10,000.

Family Home Guarantee

They have also guaranteed 5,000 family home places per year from July 1, 2022 to 30 June 2025. This is up from the current 10,000 guaranteed places over a 4 year period.

First Home Super Saver Scheme

From July 1, people can now build a deposit inside their super, affording a tax advantage and increasing the usable deposit amount. The new maximum number of voluntary contributions that can be released under the FHSSS will increase by $15,000 to $50,000.

Looking to sell in a changing market?

If you are concerned by the changes in the market, don’t be. Homes priced correctly are still selling quickly and for good prices. Winter is looking like a good time to sell, with historically less supply giving buyers a smaller pool of properties to choose from.

The key when looking to go to market is to work closely with your selected agent to ensure you list with the right price guide. To maximise your chances of getting the results you are hoping for, remember to work with an agent you trust and to be realistic in your price expectations in light of the market changes.

To find out more, or to speak to one of our sales agents about your property, contact our team today.