Sydney’s real estate listings are beginning to pile up as falling property prices shift the harbour city firmly into a “buyer’s market”.
The surge in listings creates more choice for buyers, but properties are also taking longer to sell as vendors adjust to new price expectations and buyers hold out for bigger discounts, no longer driven by the fear of missing out that fuelled the booming market.
The new figures from SQM Research show total residential listings in Sydney climbed 6.6 per cent in July to 39,400 properties, up from 30,776 listings at the same time last year, representing an annual increase of 28 per cent.
The higher volume of properties in the middle of the traditional winter slowdown was driven by a growing backlog of old listings (6.6 per cent), while new listings grew by just 0.6 per cent.
SQM Research show total residential listings in Sydney climbed 6.6 per cent in July to 39,400 properties, up from 30,776 listings at the same time last year. Picture: Sam Ruttyn
Nationwide, a similar trend emerged, with listings climbing 12.4 per cent in July. This included a lift in new stock (5.1 per cent) and an 8.1 per cent increase in older listings, suggesting more properties are staying on the market longer across the country.
Recent price falls are one of the greatest reasons for the accumulation of listings, with Sydney recording the nation’s steepest price decline in July, with values falling 0.6 per cent for the month, and house prices now sitting below where they were a year ago.
Ray White Chief Economist Nerida Conisbee said the main driver for recent price falls have been the sharp change in financing conditions with three interest rate hikes this year and the federal budget adding another layer of uncertainty by changing negative-gearing and capital-gains-tax arrangements, causing some investors to step back from established housing.
“The result is fewer buyers, lower auction clearance rates, less urgency and properties taking longer to sell,” Ms Conisbee said.
“Importantly, this is primarily a demand-led correction, not a distressed-sales crisis.
“Listings are accumulating because homes are taking longer to sell, rather than because we are seeing a major increase in forced selling.”
Sydney recorded the nation’s steepest price decline in July with values falling 0.6 per cent for the month, it follows this year’s three interest rate hikes and tax reforms
Ms Conisbee said for buyers, conditions are becoming more favourable with more choice, less competition and greater scope to negotiate.
For sellers, Ms Conisbee said the most important thing is to price for the market that exists today, not the market from six or twelve months ago.
“Properties that are well presented and realistically priced are still selling, but ambitious price expectations can lead to long campaigns and repeated discounting,” she said.
Aurum Advisory Co-founder and Senior Buyers Agent Leon Jacques said it’s the hardest and fastest price fall he has seen.
“I think it’s the best time I’ve seen to buy, but it just comes down to whether vendors meet market and that’s the biggest struggle that most of us are having at the moment,” he said.
“But when vendors are actually meeting the market, you’re going to buy 10, 15, maybe even 20 per cent better then you would have bought six months ago.”
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Listings are accumulating with homes are taking longer to sell, particularly at the top end of the market. Images/Russell Millard Photography
PRD Chief Economist Asti Mardiasmo said Sydney’s price-sensitive market means the top end is seeing the most stock linger longer.
“When it comes to the more premium blue chip market, that’s where we’re seeing more stock sitting,” she said. “Whereas if we’re talking about the middle affordable market, that’s where we’re starting to see more off the stock actually shifting and selling.”
Ms Mardiasmo said properties around Sydney’s $1.5m median are seeing the most shifts, whereas blue chip suburbs with prices $2m or over were lingering with smaller price falls in comparison.
“That’s simply because with a higher pricing it means that you do have to cough up a little more for the deposit and then higher interest rates mean you have to pay more in your mortgages,” she said.
“They don’t get as much swing or as much sudden buyer activity as the more median and below median affordable pockets.”