Property buyers are always wanting to know the best time of year to buy a house in Sydney. Now that clearance rates have dropped, the question on everybody’s lips seems to be: do I buy now or wait for property prices to fall?
You see, this is what’s called a ‘transitional market’, meaning that we are moving from boom conditions to ‘normal’ conditions. This period of change brings uncertainty which, in turn, brings inaction from buyers. The fact this is occurring in spring is no surprise because typically the market slows down every year at this time. In short; yes, now IS the best time of year to buy a house in Sydney. Well, at least in some parts of Sydney. It’s important to recognise that not all areas operate in the same ways.
I can, however, say with confidence that now is the best time of year to buy a property in Sydney’s inner ring. History tells us that this is the case. I often write about changing market dynamics and you can see a pattern when reading back on the blogs of previous years. I have compiled a selection for you here.
Written in September 2016: “I have now been in real estate for 16 years and over that time there have only been 2 years where the market did not peak in September.” It’s more common than not for clearance rates to fall in the last 3 months of the year. Instead of taking advantage of these conditions, many buyers sit on their hands and elect to ‘wait and see’.”
Written in March 2016: “The Sydney property market bounced back in February with clearance rates well over 70% after it spent the last couple of months of 2015 in the doldrums.” Those buyers who sat out the spring 2015 market waited and saw that prices took off again in the beginning of 2016. They had missed their chance.
Written in November 2015: “Sydney property market and its wild ride had to run out of puff. Well, it had to happen and it has done so at precisely the same time of year that every other boom has ended during my property career: spring.”
Written in December 2014: “Last week in Dr Andrew Wilson’s column in the Domain there was much mention of falling auction clearance rates. Auction clearance rates drop most years in the spring months and December because of simple economics. More property is listed for sale, so the balance between supply and demand is skewed more in the buyers’ favour. Which, in turn means that there is less competition per property and an increase in the amount passed in at auction.”
Written in February 2014: “Traditionally in the new year we see property prices increase on average 2-5% from the pricing we did before Christmas. We have ascertained that it’s created by a combination of factors: the downtime of holidays, sunny weather and general good cheer that get people thinking.” Buyers who experience decision fatigue in spring often bounce back after they recharge their batteries over the Xmas break. These buyers end up paying more for property than they would have had they purchased in spring.
Written in October 2013: “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.” Talking of the GFC, that is the only time we have experienced a true buyers market in inner Sydney. That is, when quality property was offered at great price reductions by vendors under extreme pressure to sell. It only lasted a couple of months, though.
Written in November 2010: “Agents are telling us that there are less people attending open homes and less buyers registering to bid at auctions, translating into lower clearance rates. As Christmas draws closer, many buyers have decided to put their property purchase on hold until next year and many vendors are getting nervous, wanting a result before the end of the year.”
So, you see, this is an annual pattern and this is why I say that now is the best time of year to buy a house in Sydney. Or an apartment. Even if the boom is over (as we believe it is), the spring market is not necessarily indicative of how the market will move forward into 2018 and beyond. If you want to buy a property (whether it be a home or an investment) and are in a position to do so, I encourage you to take advantage of favourable conditions this spring. Contact us now if you’d like to find out how we can help you to buy the right property.
Published: October 2017
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.