Activity in Sydney’s property market in February revealed an improved acceptance between buyers and sellers in Sydney’s property market, resulting in increased transactional flow and a level of price stabilisation.

“A meeting of minds has happened between buyers and sellers, with stronger fundamentals on both sides now more evident than six months ago,” says BresicWhitney’s CEO Thomas McGlynn.

The group listed 118 properties for sale over February and transacted on 100 properties. In August 2022, the group listed 96 properties and sold 72. The number of buyers it met across the month continued to increase, to an average of 220 per day, up 53 per cent from January 2023 and 24 per cent from November 2022. This is second highest month of attendees ever for BresicWhitney, second only to those greeted in May 2021 – a period marked by inflated post-lockdown demand.

Mr McGlynn added that restricted listing levels had in part driven this, as had the upcoming State Government election. “High buyer volumes in 2023 have been fuelled by opportunism and depressed listing levels. A potential change of Government encourages people to assess their property plans with more urgency than they might have otherwise, particularly when incentives to purchase are on offer with the current governing party. We expect that listing levels are likely to rise by a further 5 – 10 per cent in March and that there will be sufficient demand to meet this. We have also recorded a 15 per cent increase across January and February in owners considering a sale on the previous year,” he said.

 

 

The significant uptick in demand from first-home buyers was particularly evident in the sale of 39 Charles Street Forest Lodge in early February. The two-bedroom house was purchased by first-home buyers who outbid others to secure the property for $1.42 million. It had 11 registered bidders at time of auction, in which half of those were first-home buyers.

Auctions across the group for the month saw an average of seven (7) registered bidders, almost double the bidders present six months ago (3.6) and 12 months ago (3.7). The group’s clearance rate was markedly higher than six months ago at 83 per cent, above the Sydney average of 71 per cent according to Domain.

For the first time in twelve months, February also marked a price rise in median values. Corelogic’s Home Value Index reported a 0.3 per cent rise in dwellings across Sydney for the month.

Mr McGlynn said this was evidence that the path to normalisation had begun, albeit gradually. “The data we’re privy to, the sentiment in market and the hundreds of conversations we’re having with buyers and sellers every day demonstrates that this stabilisation is indeed continuing. Corelogic’s findings support this.

“While it’s tempting to pinpoint exactly when we’ll reach the bottom of the cycle, this remains difficult. Instead, we’re focusing on the likely length of time at which we’ll spend in these current conditions, with the knowledge that continual and varied change along the way is likely. As such, we expect a more U-shaped trajectory for the Sydney market, not the sharp V-shape some are expecting. This means a potential six to 12 more months of stagnation, before widespread confidence returns.”

Taking a micro view of markets across Sydney, the Inner West continues to be a generator of demand. Long-awaited infrastructure improvements such as the now-open WestConnex tunnel, and Sydney Gateway to be completed in 2024, will further improve accessibility.  Sales across the month in the Inner West include 12 Wigram Road Glebe, 46 Hart Street Tempe and 50 Moonbie Street Summer Hill.

Demand in the rental market remains a significant consideration for the Sydney market. The average time at which a rental property is on market at BresicWhitney is 7 days with vacancy across the portfolio sitting at sub-one percent. 

Head of Property Management Chantelle Collin said, “There’s very high demand from tenants looking for homes in the rental market and the reality is it’s not going to ease for some time. Our focus is on assisting tenants as best we can while acknowledging the challenges and many complex barriers, they may face in securing a property. It’s incredibly important that as an industry we continue to educate owners of the complexity in the market and evidence how the potential benefits of a quality, long-term tenant for their investment could in some cases outweigh a tenant willing to pay the highest rent. This of course needs to be balanced by our consideration of the pressure owners are feeling from continued interest rate rises and their appetite to secure the best income for their property.

“Attention from the NSW State Government needs to be given to rental housing in Sydney to address underlying issues with supply, as does continuing to ensure investors are incentivised to buy the homes that form part of this critical supply,” she said.