Sydney prices have clawed back all the losses of 2022
- November 30, 2023
A most interesting dichotomy unfolded in the property market during November, and it may be true that prices could be rising and falling simultaneously. CoreLogic data revealed that in November, Sydney property prices clawed back all the losses of 2022 and again hit the record levels of April 2021. However, as Sydney prices reached the price summit, we also saw evidence of price softening, which became more noticeable following the 13th rate increase which fell on the day of the Melbourne Cup. Over the last three weeks of the month, the final auction clearance rate in Sydney was sub 50%. The last time this trend occurred was the middle of last year and at that point in time prices were falling month-on-month.
The strong statement from the newly appointed RBA Governor, Michele Bullock, that “rates would remain higher and for longer” is weighing heavily on the decisions of those moving through the property market. Every year we tend to see buyer fatigue creep into the market, however, as the world seems to be fixated on volatility and drama, we have noticed that people are becoming more exhausted earlier and earlier. Layer this general tiredness with a year of rising costs of living and another rate rise with the threat that more will be coming, and you can understand the apprehension across the market.
It must be said that this sentiment is not being seen across every area or price point. Some sellers will be completely oblivious to a softening market dynamic and are still achieving great prices at or before auction. Sadly, the other side of the market is a noticeably different story, with many sellers seeing firsthand just how swiftly the mood of buyers can change. As a result we’ve seen many campaigns across the market reduce prices, push back auctions and swiftly navigate their sale process in order to find the ideal buyer as confidence weakened. The good news is that most sellers are striking engagement with buyers if they modestly reduce their asking price. This could be a good sign of stability moving into next year and indicates that the new market environment is likely to remain price sensitive while what will happen with rates remains unknown.
The overall market slightly favours buyers, however there are still record outcomes being achieved for marquee properties with the sought-after ingredients that attract a wide and competitive buyer pool. Many buyers remain happy to activate an offer before auction and the results indicate that this is how most properties are trading locally. It’s fair to say that if a property runs all the way to auction in this environment, the seller and agent are confident that there is solid demand and interest.
In another rollercoaster year, the so-called market experts kickstarted 2023 suggesting that Sydney prices would tumble by an average of 8%, yet the complete antithesis unfolded. The more closely we monitor the forecasting from every major bank and property analyst, it’s apparent that their information is entirely unreliable and not worth basing your life decisions around. We suggest a simple game plan – if you find something you like at a price that suits, that’s a sensible purchase.
