Property market slowing down! Isn’t this what we’ve all been waiting for?
The headlines are all doom and gloom. We’ve been here before, you know. Back in December 2008 we couldn’t pay people to take the plunge and buy property. The GFC had just hit and there was extreme uncertainty in the market. Then the Federal Government responded with various incentives to buy and we saw the market turn bullish again in 2009 and 2010.
It slowed again in the spring of 2011 and stayed that way until the most recent boom took off in the beginning of 2013.
Over the past year we have again experienced uncertainty in many areas and price points as we watch the property market slowing down to a sluggish pace. In my experience, that means time to buy – carefully of course.
Regular readers will know that I often exhort property buyers to do the opposite of what everyone else is doing. And that is precisely what the people who bought 78 Annandale Street Annandale in December 2008 did. They bought a top shelf property in a great street. A leap of faith some might say – but a mere 15 months, a lick of paint and some new carpet later, they enjoyed an increase in value of over $500,000.
You can read the full story by clicking on this link:
Another example is the buyer who paid $1.73M for 17 Duke Street Balmain East in December 2008. This property had been advertised two months earlier for $2.495M and the month prior for $2.35M before his “cheeky” offer was accepted. In June 2010 it was sold for $2.245M in apparently exactly the same condition in which it was bought only 18 months earlier.
Our message is constant – in blue chip areas there will always be demand for quality property. Recently we have seen competitive auctions for A grade properties (no run away prices, though) and lots of B & C grade properties passing in. We’ve also seen a handful of inexperienced agents panic and sell good properties very cheaply. There has certainly been some excellent buying in recent months.
Here’s an example of an area and property type that has attracted constant buyer demand even in recent months. If we look at some historical sales in Farnell Street, Hunters Hill you will also see a headline-defying upward trend. In 2015, 47 Farnell Street sold for $2,450,000 & 39 Farnell Street sold for $2,330,000. In 2016, 22 Farnell Street sold for $2,700,000 and in 2017, 19 Farnell Street sold for $2,850,000. Just a few weeks ago another home sold, 16 Farnell Street, for an undisclosed price of ‘high $2.8’s’ according to the agent. The 2018 sale is particularly interesting as it doesn’t fit the general pattern of the property market slowing down. The question is, what do all these properties have in common? The answer: 800+sqm land, potential to renovate/rebuild and a desirable location.
So what does this tell us? It illustrates that despite the wide spread doom and gloom of the “Sydney property market”, quality properties, in quality locations, remain desirable and will perform well in any part of the property cycle.
While so many other buyers are saying “we are just waiting to see what the market does” there are opportunities waiting in a buyers’ market. We know how to find and secure them at the right price!
It’s the people who don’t follow the crowd who benefit from a slowing market.
First published: September 2011, revised 2013 & October 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.