The latest report from Corelogic RP Data shows that the median house price in Sydney has dropped 2.5% in the first quarter of 2018.
 
This is the largest three-month decline since August 2008 at the height of the GFC. And this is also following a 1.3% drop in the final quarter of 2017.

And speaking of the GFC, a report has come out that homeowners in some pockets of Sydney have had to reduce their asking price by up to 30% in what is being described as ‘GFC-style’ price declines.
 
This report has named many areas of Sydney but as to be expected, none are located in the Northern Beaches.
​
But before you get too worried, it’s important to know what price these homeowners started from.
 
It is a common symptom of the homeowner who sells after the peak to expect a boom-time price for their home, and at the same time a symptom of the buyer to expect to pay much less after a boom.
 
Both parties are exaggerating the price change and both inevitably will meet in the middle after a generally longer selling campaign, hence why the average selling time in Sydney has blown out to 60+ days.

As you may already know, I’ve been a professional in this industry for 33 years and I’ve seen my fair share of market cycles, and this same thing happens every time.

History shows that property values in Sydney have a period of flat growth for a number of years after a boom period.
 
In 1987 to 1988 we had a boom where property values doubled in price, which followed a period of slow growth in the early 1990’s after ‘the recession we had to have’.
 
​From 1996 prices started to rise again as interest rates began to drop. This lead to another phenomenal rise in property values, with a huge spike after the 2000 Olympic games through to 2003.
 
This again lead to a fall in prices with a period of flat growth to 2009, before a quick sharp rise in 2010, followed by a plunge in 2011, which was setting the scene for the meteoric growth we experienced from 2012-2017 as interest rates dropped significantly in this time frame.

The period that follows next is just following the historical trend in​ the​ Sydney real estate​ market, where we have seen a pullback in prices from its peak mid-2017, and if history is to repeat itself we will experience a period of flat to negative growth over the coming years.

Sure, auction clearance rates and property values have dropped however the bottom line is that this is to be expected from the meteoric rise we have experienced over the last 5 years. 

For the realistic homeowner who understands the importance of preparation in a sale, and coupled with an experienced real estate agent, your selling campaign can still be very successful.

If you know of anybody who is thinking about making a move but is concerned about timing, I’d love to continue the conversation. Please pass on my contact details.

Thanks for reading,

Tony.

There are a few statistics coming out now which are definite indicators of a cooling market in Sydney.

First of all, dwelling values have changed by -2.4% in the three months ending in February.

Second, there were 9.4% fewer sales in February of this year compared to February of 2017, and this is from a much larger sample size too – there is 27.4% more property for sale at the moment in Sydney compared to March 2017.

Thirdly, this glut of property on the market and lack of transactions has caused the average selling time in Sydney to balloon out to 68 days. This is a stark contrast to the sub-30 day selling time we have witnessed over the preceding 4 years.

First home buyer demand is still climbing, however this is in part due to the mass exodus of investors in the market as they struggle to obtain finance.

Check out this graph showing the dramatic drop of interest-only loans from Sept 2015 to Sept 2017:

As the year draws to a close, it’s a good opportunity to reflect on the year that has passed.

2017 has been an eventful year with real estate topping the national headlines almost every week.

We started the year with auction clearance rates on the Northern Beaches around the 80% mark, however the last couple of months has seen the Northern Beaches underperform the city average at 63%.
 
Auction clearance rates are seen as one of the ways to define how the market is performing. It must be noted that a normal Sydney market would see clearance rates around 55%-60%, so we are tracking back to typical market conditions as opposed to the buyer frenzy and double digit returns over the past 5 years.

Market growth has been declining into negative territory since July. In fact, Sydney house prices have declined by 1.3% over the last 3 months. This is the greatest decline over a three month period since March 2016.

The cream has now been wiped off property values, so vendors trying to achieve the prices obtained earlier in the year and in record time have been caught unexpectedly. 

The supply of homes on the market has also slowly risen as the year has progressed. Although it is worthy of note that this number is also reverting back to the mean as we have had a very low supply of homes on the market for the preceding 4 years.
 
This also has a direct correlation with the fact that homes are taking much longer to sell now than they were at the start of the year, causing more homes to remain on the market for longer.

So it’s no question that the market has now reached its peak and buyer sentiment has definitely changed. 

The market has been trying to reach this point for a while now. It’s only kept going because of monetary policy and interest rate cuts. This life support has now been switched off, as banks have been forced to make it harder for people to borrow, and an interest rate cut by the RBA is quite unlikely for the foreseeable future.

So we’d rather deal with a market correction now than continue to kick the can down the road and deal with a potential market crash later.
  
And let’s not have short-term memory loss here – your home has increased in value by as much as 75%-100% over the last 5 years.

So the next 5 years are not going to be like the preceding years. I’ve seen this point in the market many times over my 32 year career. I know it takes a special kind of marketing and negotiating strategy to ensure you get sold quickly and for a great price when dealing with buyers who perceive to have the upper hand at the negotiating table.

To discuss further about preparing your home for the upcoming market conditions, please do not hesitate to contact me at anytime.

Let me be the first to say: I wish you and your family a very merry Christmas and a happy, healthy and prosperous 2018!

Thanks for reading,

Tony.

Well the median house price in Sydney has now fallen for the second month in a row, causing many commentators to officially call the end of the 5 year boom.

Combined with dwindling auction clearance rates, it’s no wonder the media is churning out negative comment over negative comment, which is having a major effect on buyer sentiment.

However the actual numbers are nothing to lose sleep over, a 0.4% decrease over October and a 0.2% decrease over September. And remember these are Sydney-wide statistics, incorporating the troubled outer west and south-western suburbs of Sydney.

In all likelihood, the Northern Beaches has not witnessed a decrease at all, and in the last 12 months your home has still increased by about 8%.

The auction clearance rate last weekend Sydney-wide plummeted to 64%. The same weekend last year it was 80%, however last weekend on the Northern Beaches the clearance rate was a respectable 75%, the highest out of the Sydney regions.

We are at a defining point in the market at the moment. The last time this happened in late 2015, it took two interest rate cuts through 2016 to bring heat back in to the market. This rate-cut lifeline will very likely not occur this time, leaving us in housing-market limbo.

But, these are the machinations of the property cycle, or in fact, any economic cycle. Values do not go up in one straight line, rather a combination of peaks and troughs that over time causes a steady rise in values.

It is easy to have short-term memory loss about this, as it’s not something we have experienced for a while. The market is owed a breather after rising 75% since 2012.

We are due a correction in the housing market, and we’d rather have this sooner than later and not risk a debilitating crash in values.
 
And this means sellers have now got to change their mindset, and need to stop comparing with the prices their neighbours were achieving in the sale of their homes months ago.

With the frenzy now disappearing from the marketplace it is now important that any seller has to realistically price their home in order to achieve a good sale.

As we’re getting towards the pointy end of the year, we are in the process of helping our clients prepare for an early 2018 sale. If you would like to know more about how best to prepare over the holiday period, please do not hesitate to contact me.
 
Thanks for reading,

Tony.

As we enter into the final quarter for 2017, there’s no doubt that there’s been a slowdown in capital growth in Sydney.

In the last three months, Sydney home values have fallen by 1.9% citywide, with the largest areas hit being the inner city, south-western suburbs. Compared to the same quarter last year when Sydney values rose 6.4%, it’s a noticeable difference.

It’s also taking longer to sell a property. Over the past three years, the average time on market in Sydney has been under 30 days. Currently, the average is approaching 40 days.

On a positive note, your home is 8.2% more valuable than it was this time last year.

Sydney has now become a tale of two cities. The outer suburbs of Sydney are feeling the heat at the moment, and with that, they’re bringing down the statistics for the rest of the capital.

Realistically, the slowdown was always going to happen. How long can you have double-digit returns?

Since January 2012, your home has increased by an astonishing 75% approximately. I think we can chalk this period up as unprecedented times.

But are house prices going to go down? What’s going to keep the market buoyant?

Negative sentiment definitely plays on the mind of purchasers and the frenzy has definitely come out of the market.
 
However, Housing demand in Sydney is not going to go away, as it is fueled by strong population growth. In the 1st quarter of 2017, Sydney posted the 3rd highest quarter of overseas migration on record.

And first homebuyers are making a comeback, especially in NSW. The stamp duty concessions granted by the state government appear to be working. First homebuyers reached their highest level since 2013, and they will help fill the void left by investors unable to continue in the Sydney market.

The Northern Beaches market is still holding up despite the negative press.

We have begun working with clients who are looking for an early 2018 sale. This gives us enough time to adequately prepare the home for a record result.

If an early 2018 sale is on the horizon for you or someone you know, now is the time to talk to me as this may well be the best time to sell!

Thanks for reading,

Tony.

Spring has Sprung! It’s that time of the year again when real estate dominates the headlines – and it’s not always positive.
 
The auction clearance rate Sydney-wide last weekend was 18% lower than this time last year. This was the first ‘Super Saturday’ of the year, and it was the slowest start we’ve had in 5 years.
 
It’s not all doom and gloom on the Northern Beaches however, as we saw a respectable 72% clearance rate. It’s still a tale of two cities with areas like Sydney’s southwest felling the brunt of the slowing market, with a clearance rate of just 46.51 per cent. In Parramatta, it was 52.94 per cent.

There are currently 16.4% more listings on the market in Sydney when compared to this time last year. This, combined with stricter bank lending on interest only loans would be the main drivers leading to zero capital growth in Sydney over the month of August.
 
However we are still 12.7% higher than this time last year and properties are taking a little longer to sell, but still inside a month.

Sydney's housing crisis however has reached an alarming new threshold with a key measure revealing it now takes more than two average full-time wages to affordably service a loan for a typical city home.
 
The Housing Industry Association's housing affordability index, which measures the capacity of households to service mortgages, shows Sydneysiders must fork out $4,729 per month, or nearly $57,000 a year, to service a standard mortgage on an averaged-priced home in the city.
 
That is more than 30 per cent of the earnings of a Sydney household with two average full-time wages – the portion of income widely accepted to be a manageable housing repayment.

While interest rates remain at historic lows, Sydney’s appetite for property remains.
 
But as more and more negative headlines come, buyers will try negotiating harder with their purchases and although it is likely that interest rates will remain on hold for at least another 12 months, watch out for when they eventually start to rise.
 
This is a time when the correct marketing and negotiating is crucial to obtaining a boom-time result.
 
Just like a great teacher will have a direct bearing on a child’s education, a great agent will have a direct bearing on the sale of a property and its result.

If you would like to have your property sold before Christmas, now is the time to begin the preparation phase. Feel free to contact me any time to schedule an initial meeting
 
Thanks for reading,

Tony.

Despite the gloomy news headlines regarding the future of our property market, there are no real head winds on the Northern Beaches with a very healthy 86% clearance rate last weekend.
 
In contrast nationally, house values dropped for the very first time in a while – down by 1% for the month of May. This stagnant growth could be explained by the increased supply – there are 6.2% more listings on the market when compared with June 2016.​ However the market is still 11.4% in front when compared to June 2016.

So although recent media reporting may entice you to think that property values are about to tank, I believe we are in a transition period to the next phase of the property cycle. Put simply, the buying frenzy seems to have dissipated, however properties are still selling.
 
Sure, some areas of Sydney that are investor hotspots with an abundance of vacant land will possibly experience a downturn, but the desire to live on the Northern Beaches will always bring demand. The only way we will see red across the board is if interest rates were to rise and ​they were put on hold once again this month by the RBA.

However it is interesting to note that many economists are now predicting that interest rates may drop once again later this year if the economy does not improve. It’s ironic that if this was to occur it will surely prolong the strong growth in property values as money to borrow becomes even cheaper.

Now that Winter has well and truly set in, there is a misconception that the selling season is over until Spring. However, this could not be further from the truth in this current market.
 
As many sellers follow this trend, it gives the home seller who goes against traditional thinking a huge advantage.

You see, when Spring comes around, everyone who has been holding off selling during winter all come onto the market at the same time, causing those huge Super Saturdays you see in the news every year with the number of properties on the market and going to auction increasing dramatically.
 
This can actually work against the home seller, as they will be competing with more homes on the market all at the same time giving buyers more choice. It then becomes simple economics - More supply will put downward pressure on home values.

By placing your home on the market in quieter winter times, this effect works to your advantage. There will always be buyers still looking to buy in winter, and with less to choose from, they all come to your doorstep and push the price upwards.
 
Once Spring has sprung your home becomes less isolated in the marketplace.
 
Thanks for reading,

Tony.