November Overview – It’s back to basics for sellers

November proved to be a challenging month for the Sydney property market as the prolonged period of higher interest rates tested the financial stability of many homeowners and weighed heavily on buyers’ interactions with the market. It’s been well reported that Sydney’s final auction clearance rate has been weak this Spring. With large volumes of property going under the hammer during November, the clearance rate was pegged in the early 40% bracket, according to SQM Research. Traditionally, with a clearance rate at this level, it would indicate downward pressure on property prices, and we’ve seen evidence of this playing out in the market across all price points.

It’s important to remain level-headed when prices are easing in Sydney as there are always hyperbolic headlines and wild forecasts in such a market. In truth, here is what is going down across most suburbs in Sydney right now. Buyers are cautious – they’re susceptible to the higher rate environment just like any homeowner. Their nervousness often stems from what they may achieve for their existing property before they make an offer on a new option. Layered over the market is the fact that property is expensive. Prices are at peak levels, if not above the big markers that were set in 2021 when borrowing levels were at never-seen-before lows. The general sentiment and conversations in the market are that everyone feels financially squeezed and the outcome of this is that buyers are watching their costs and want to see value when they purchase.

There are plenty of transactions unfolding around the market and some top results in the mix too. Many buyers see these conditions as an optimum time to be trading given buyer competition is weaker, and sellers are more willing to work around price and conditions. We’d consider the overall conditions slightly tilted in favour of buyers; however you can be certain that any well-presented and positioned property continues to draw in a decent audience and attract offers. We were doing plenty of arm-wrestling on price between buyers and sellers throughout the month, again a commonplace byproduct of a softer selling market. However, when we assess the prices being achieved, they’re still incredibly strong when benchmarked against the last several years.

The volume of property on the market has been high – 12.9% higher for Spring compared to the same time period going back to 2019. This higher level of listings also tested the depth of the buyer pool, so sellers had to be smartly priced to ensure that they were competitive against other listed properties and attracted the right type of buyer. That said, it’s not an overly complicated market in that if you get the basics right – correct presentation, intelligent marketing and smart pricing – properties are moving. We’re now already gazing into 2025, and the focal points remain the cash rate, inflation and what the RBA will do next. We know forecasts are largely useless so we have to play it day by day, but for now it’s a value-driven market and we can’t see that changing any time soon.