Buyers’ agent, Rich Harvey, says it’s difficult to predict when the Sydney property market will bottom out, but it will be in 2019.
And this makes for perfect conditions for buyers’ agents and their clients.
“The property market moves in cycles,” says Harvey, CEO and founder of propertybuyer and chair of REINSW’s Buyers’ Agents Chapter Committee.
“It is driven by the fundaments of supply and demand, population growth, migration, interest rates, availability of credit, planning laws and other economic factors. I expect the median house price in Sydney to continue to fall before it stabilises later in the year and finds a new floor.”
A changing market
The September quarter 2018 saw Sydney’s median house price drop 3.3 per cent to $1,062,619. It was the fourth consecutive decline in the city’s median house price, with an overall decline of 10.8 per cent since December 2017.
Property transactions are also slowing. According to SQM research, property listings in Sydney grew 16.5 per cent between December 2017 and December 2018. This increased the number of days on market and forced many vendors to lower their prices, contributing to Sydney’s falling median house price and cooling market.
While many agents are feeling the pinch of a cooling market, buyers’ agents – and their clients – are set to benefit.
“The first three to six months of 2019 will provide some of the best buying opportunities in many years,” says Harvey.
“My view is that we have already seen the majority of the price drop. I believe the first part of 2019 will present some of the best buying opportunities for both homebuyers and investors to get a foothold in the market while there is less competition.”
Harvey says buyers’ agents with in-depth, local knowledge of their market are perfectly positioned to take advantage of this correctional phase. However, he emphasises that this is not a reason to rest on your laurels.
“When prices go up sales agents are flooded with listings. As prices come back down, more buyers enter the market,” he says.
“Buyers – many of whom were consistently priced out of the market throughout 2017 and 2018 – are now eager to commit and can see the value of engaging a professional, following their experiences with the market over the last two years.”
Harvey says while finding clients and completing purchases is likely to be easier for buyers’ agents while the market is un a state of flux, it is still important to offer a high level of service.
“There are many headwinds set to impact the property market this year, including the Federal and State elections, changes to negative gearing and capital gains tax, the findings from the banking royal commission and continued tight lending criteria,” he says.
“In times of uncertainty, as we are experiencing now, a client must see their buyers’ agent as a trusted advisor if they are to hold their nerve and take action.”