August Overview – Buyer energy remains elusive to close off Winter

A late surge of warm weather to see out Winter was welcomed, following a wet, cold, and largely drab three months. Whilst the balmy weather is wonderful, dissecting the performance of the property sector in August is crucial, being the springboard into the traditionally busier Spring selling period. Historic data indicates that the peak time for listings and transactions in Sydney is October, so August plays a large role in setting the initial market tone and sentiment.

The August auction market for Sydney wasn’t pretty. SQM Research recorded a final clearance rate consistently below 50 percent for several weeks. The firm’s director Louis Christopher noted on the X platform, that if the clearance rate hovers in the early to mid-40 percent range, it’s probable that there will be price declines in Sydney of between 4 and 8 percent. While the clearance rate didn’t quite fall to those levels, the results reflected a disconnect between sellers’ expectations and buyers’ willingness to engage. The weight of higher rates and affordability constraints is evident across the broader market and this sentiment will carry into Spring.

Our open home inspections across the market delivered mixed results too. It’s clear buyers are searching more thoroughly across multiple regions, they have intensified their due diligence, and they have crystallised their key buying requirements. It’s the type of market where buyers are less willing to compromise on their ‘must haves’ and are content to wait for their ideal property. We talk a lot about value being the key driver to engage buyers in the current climate but let’s be frank, this is Sydney property and value isn’t something exactly synonymous with the city. That said, when you become ingrained in the buying and selling process, one has to become an immediate expert on the nuances of their selected market and develop a keen eye that can detect when a property is priced well versus one that is ambitiously positioned.

It was clearly evident through August, that buyers would act swiftly when a new property entered the market, provided it presented value in the eyes of the active buyer pool and the sellers were ready to negotiate. In these cases, sellers could expect to see some competitive tension and a solid price achieved in a relatively quick timeframe. Such a selling experience was available for about 20 percent of the market with the remainder of sales a more delicate journey. We did see a number of big price swings with a few local agencies guilty of dropping initial guides by more than 20 percent, which highlights just how far apart buyer reactions could be from a seller’s ambitions.

As we turn a corner into Spring, we expect the market to remain somewhat of a minefield. There is decent buyer demand available but as expressed, buyers are driving where the watermark of value is currently sitting. This isn’t a market where sellers can pick a number, list their property and expect an outcome. It’s a market where curated advice and a focused strategy are required to engage interest and enjoy a successful sales experience.