October Overview – Value dilemma for buyers and sellers amidst auction uncertainty

October listings continued to surge forward across the Sydney market, with significant auction volumes occurring weekly which saw sellers largely jostling to find reliable buyer interest. It’s an unpredictable market with significant fluctuations for sellers – certain properties are flying off the shelf while others are seemingly stuck in the mud. We’re seeing the mixed results play out through the auction market, with Sydney’s final clearance rate pegged well below 50 per cent throughout the month and producing the weakest results since the beginning of 2022 when the cash rate started to rocket up. Such an outcome would indicate that there is downward pressure on property values and while this may be the case for some properties, it’s certainly not the case for all.

The dichotomy of the market is challenging for buyers who are typically spending more time reviewing and assessing the market to best understand why certain properties produce standout results while others are seeing multiple price adjustments throughout the campaign. For buyers, this is very important. It’s an acquired skill and takes quite a bit of time to really understand the nuances of the current market, so they can then best approach a negotiation. On the sellers’ side, these conditions are also bringing no shortage of challenges as they also see some signs of positivity mixed with a wave of uncertainty. The challenge for every seller is that they tend to lean into the positive space and shut off receptors to the growing list of failed auctions. It’s human nature – we all love our homes, we’ve shared many fond memories, we understand how everything works and all the little things like how the light hits in the morning and how close it is to our favourite park or café. Unfortunately, for most buyers, our personal moments, memories and fondness of our home doesn’t always equate to the same level of connection to the vast majority of the buyer pool.

This is a property environment that is predicated on value. Buyers are craving to see it and even the very best homes are susceptible to this level of reaction and assessment from the active buyer pool. If a seller’s property is not identified as ‘value’ against recent sales and competition, the sale process will be a challenging experience. Value is so subjective and for sellers it’s hard to grasp what that means. However, from a strategic point of view, it essentially means finding a price point that the majority of the buyer pool will agree is a reasonable position to make an offer. We tend to drop away feedback from the bottom-feeders and also neighbours who tend to over-inflate local sale values, and we stick to the core feedback from active, genuine and reliable buyers.

With a short window remaining to close a sale before Christmas, there is no question in our view that the word ‘value’ will be raised a lot in conversations among buyers and sellers. Those sellers who nail down value will enjoy a successful sale and those who chase an unrealistic price will struggle to get a deal closed this year.