Lately, the press has been full of stories about the Sydney property boom being over. The boom did last for five years, so the end had to come at some point. The thing is, people are talking about this “boom-and-bust cycle”. They’re all waiting for prices to fall, or even to crash before they buy something. Now that cycle happens in many markets, but in inner Sydney, it doesn’t actually happen that way. So, is it a good time to buy property in Sydney?
Buying in the Inner Suburbs
The thing is when you buying property in the inner suburbs of Sydney, (and this applies to Melbourne as well) if you buy good-quality property, it doesn’t fall in value. The curve gradually goes up and then it levels off and then it goes up again and levels off. However, if you buy in markets that are a lot more cyclical, the curve will likely rise and fall sharply, perhaps multiple times over the same time period. In these cyclical markets, the timing of your purchase is very important.
So the answer to the question, is now a good time to buy in Sydney? Well, the answer is it depends on location, but if you’re buying in the inner suburbs, yes, it’s a good time, if you buy a good-quality property. But you should also understand that there is such a thing as seasonality in the Sydney property market.
Seasonality in Property Markets
Around Christmas and during January, there’s very little stock around because as Sydney’s a very action-oriented area, nobody wants their auction campaign to be interfered with by Christmas, summer holidays, and Australia Day. We find is more stock comes on the market just after Australia Day and February can be quite a busy month. But there’s always pent-up demand and lots of buyers around. Everyone’s had a holiday, they’re relaxed and they’re ready to buy a property. Typically, the clearance rate in Sydney, or at least the auction clearance rate, will actually peak in February. It can be a dangerous time to buy because sometimes prices are a little bit inflated.
During March and April the market will go back to normal for a few months. During Easter break and the Easter school holiday period, however, nobody wants to auction their properties so you’ll likely see the market just plod along. You will see new properties on the market, and there will be people buying them, but the clearance rates probably hover around the 60 to 70% mark. Not highly competitive, but if it’s a good property there will always be competition.
Peak Listing Period
After Easter, if it’s going to be a boom year, things will take off again and the market will go crazy right up to spring. When spring arrives the warmer weather brings lots of new listings. This is great for buyers because the more listings that come on the market, the greater choice makes it easier it is to buy. What often happens is by the time November and December come around, vendors who listed in spring but who have not yet sold will often get quite desperate and really worried about not selling their property before Christmas. We call that buying season. A word of warning though – there is no point buying a dud property just because it’s a bargain.
If you’re buying a blue-chip area and you’ve found a quality property that you can afford, and you’re ready, then the time to buy is now.
Published 10 April, 2018.
DISCLAIMER: Good Deeds buyers tips are intended to be of a general nature. Please contact us for advice that is specific to your individual circumstances. You may also need to get advice from other professionals such as an accountant, mortgage broker, financial planner or solicitor.