When the property market rises at a rapid pace, naturally, buyers wonder whether or not it makes sense to buy in the high-price, high-stress, competitive environment. Here’s a look at the current market conditions and what all property buyers need to be prepared for:
The Property Market isn’t likely to cool
After the first quarter of 2021, prices are still high, stock is still low and we don’t see the market cooling any time soon.
If you’ve been attending open for inspections in the past three-four months, you’d have noticed the sheer volume of people passing through almost every property for sale. Inspection numbers are ranging from 20-50 attendees at the first Saturday open home. Contract holders during a sales campaign are ranging from 5-10. The number of competing bidders at auction is in the vicinity of 6-8. For more desirable properties in certain locations, we’ve seen situations where these numbers are more than double.
Properties are selling for hundreds of thousands of dollars above their Auction reserves. The properties that aren’t reaching Auction are often selling within a week (sometimes within a day) of being listed.
So, should you buy or should you wait?
Regardless of the market being heated, though, for those who are ready to buy now, it remains our advice to buy now rather than to wait.
Today, some buyers are paying as much 25% more than they would have paid for the same house in January. Conservative predictions are placing Sydney’s Property Price Growth at a further 17-20% this year.
This means, for buyers in the sub $2m price bracket, in the current market, for every month you wait, you’re possibly going to have to extend your budget by another $50,000-$100,000. Buyers in the sub $10 million price bracket are needing another $100,000 – $500,000. Those looking in the $10 million + bracket may need to expand their budget by another $1-5 million.
While it is possible that prices may adjust and that growth will slow, we’re not seeing any indications just yet. What we do know, is that even if prices do adjust, it’s unlikely that they will fall below the current market levels.
For most people, property is a long-term purchase. Capable buyers are still more likely to be better positioned if they purchase today.
What to look out for in today’s market
While it is more difficult to find a property to buy right now, it’s important that buyers continue to prioritise informed decision-making when securing large assets.
We’re beginning to see buyers acting emotionally just to get in before the competition. Increasingly, buyers are making inflated offers and signing contracts without even inspecting the property they’re buying. While it is our advice to act quickly, this isn’t how to do it. It is always important that buyers seek the appropriate advice before purchasing any large asset.
Buyers should have pre-approved finance, understand the market they’re buying into and ensure they’ have their finger on the pulse for upcoming opportunities. If it’s an option, of course, always act with the assistance of a Buyer’s Agent. This way, you have a full picture of the market, a greater choice of potential property, and the necessary professional guidance.
The Bottom Line
Buyer confidence in all of the prime markets of Sydney is soaring, money is cheap, and there are no indicators of change in sight. The depth of the demand is still significantly outweighing supply. Price growth will continue, and for some buyers, this could mean having to spend a few hundred thousand, or a few million dollars more than anticipated.
It’s important for all buyers in this market to be proactive and seek the appropriate advice. With properties selling the same day, or just a few days after being listed, it has never been more important to be ready to act once the right property comes around.
If you need advice or assistance securing your next property in this market, we’re always here to listen and here to help. You can get in touch with one of our local property experts here.