Sydney’s house growth unsustainable
Sebastian explained: “Sydney’s house price growth has reached 80% over the past four and a half years so it was inevitable that such unsustainable levels of price growth would have to end eventually.
“Home buyers are now more prevalent, and investors have reduced due to lender policy tightening and poor rental yields.
“The market is more volatile now we are past the peak which has caused a big change in sentiment. Many vendors having missed the tail of the boom market are now left with unrealistic expectations which means their properties stay unsold for longer.”
What effect is this having on consumers and buyers’ agents?
Sebastian explained: “The current market situation has created a great deal of uncertainty for buyers, vendors, sales agents and buyers’ agents. When people aren’t confident they don’t take action which results in stock shortages, and a lack of buyers.
“It takes experience to understand the stages of the cycles and this is the perfect time for buyers’ agents to show our value. It is important we see this change as an opportunity and not a negative, because it is a great time to negotiate.
“We will see more consumers going to auction for the certainty of the process. The market is also seeing inexperienced buyers make mistakes whereas previously in a rising market overpaying was not as much of an issue as their mistakes were quickly absorbed.”
How can buyers’ agents remove uncertainty
Sebastian said: “The best way to remove uncertainty from your clients is to provide them with facts and educate them about your decisions.
“One of the most critical parts of a buyers’ agent job is to remove emotion and look at the facts and be analytical. It is important to walk the client through the process and let them know market uncertainty can also be a great time to buy as there is less competition.
“I can see more good deals now even though it is harder to close a deal. My biggest problem, given there are so many overpriced properties, is negotiating with the vendor to reduce the price.
“Buyers’ agents need to be more diligent, patient and negotiate hard, but this is the time to shine and a great chance to show your worth.
“The volatile market conditions mean buyers’ agents are needed more than ever to ensure clients are not overpaying.”
What does the future hold?
Sebastian said: “I believe unless there is a trigger event the price growth will moderate and likely plateau in most areas of Sydney in the short term.
“High quality and well-located property with scarcity will always achieve a strong result. Brand new property is most at risk because it previously sold well due to chronic stock shortages, but now will soften and be at considerable price risk in the medium and long-term.”