September Overview – Navigating a Two-Speed Spring Market

We saw a two-speed market become quite apparent during September, with select properties attracting a strong buying audience and delivering exceptional prices, while others failed to generate much interest at all. This market dynamic kept buyers, sellers and agents on their toes as it wasn’t always clear which properties would move quickly versus those which failed to find a purchaser.

Across the broader Sydney market, the auction clearance rate was consistently below 50%, typically suggesting that there is some downward pressure on prices, while CoreLogic data continues to record very modest price gains across Sydney. However, we’d suggest 20% of strong property sales are carrying growth for the remainder of the market.

Delving deeper into the auction data, we see that each weekend saw circa 22% of Sydney listed auctions travel all the way to selling under the hammer, while the remainder were either sold prior, passed in, withdrawn or rescheduled. This data reflects what we’ve been seeing across our serviced regions – that the depth of the buyer pool is weaker, which is creating choppy selling conditions.

On the upside, quality properties or well-priced properties are generating good interest and typically selling within two weeks of being listed. Buyers are incredibly savvy in this environment and intimately know everything that is being traded. So, when a property is considered fair value, in a good location and meets their lifestyle requirements, buyers are all in, and act very quickly. As a result, we’re seeing price boundaries continue to be pushed to new heights; however, where it gets interesting is that these strong sales aren’t enough to jump start confidence across all property sectors. If a property is marginally overpriced, buyers are simply walking away, even if it’s in a blue-chip location.

The pressure of higher interest rates and sticky inflation across most consumable items is very evident and it’s driving buyers at all price points to be conscious of value. Therefore, all sellers need to align with such market sentiment to avoid enduring a challenging path to securing a sale. We appreciate that every seller has their desired sales figure in mind before they’re prepared to make a move. However, in this environment, the oldest adage in real estate – that a property is only worth what the market is willing to pay – has never been more relevant.

Transaction volumes improved through September, which was expected as we move through the Spring period. Based on what we’ve seen thus far, we’d suggest that prices are largely flatlining, though overall trading conditions are very good. If sellers are willing to massage a conversation on value, then buyers can transact in a civilised manner, and it genuinely does feel like both sides walk away with a good outcome. With rates on hold and likely to remain that way for the rest of the year, we expect to see the current conditions persist through to Christmas, however we’ve learned not to assume nor go too far in predicting any economic movements, as this landscape is not what we used to consider normal.