Does history give us any clues about whether it’s time to buy property in Sydney now? This post was first written at the end of 2010. The property market had been pretty flat for the years following the GFC. See if there are some similarities with buyer behaviour in the current market:
For the first time in two years we are starting to see many good opportunities as property buyers start to second guess the market following this month’s interest rate hike. So is it now a good time to buy property in Sydney?
We have noticed that buyers in the high price brackets (over $1.5M) have been more cautious in recent months but now we are also encountering a bit of reticence with those spending under $1M. 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, for the savvy buyer who knows their market, now could be a great time to buy. Of course, there has to be a suitable property available and a vendor with sensible price expectations… but if you have found one, what are you waiting for?
Some people think that the property market could slow down in 2011 and these are the buyers who are sitting on their hands at the moment. However, we have often seen the market bounce back with vigour in the new year, after buyers have had some time to rest and regain their enthusiasm over the Christmas break. Vendors won’t be feeling the pressure as much then, either, so there may be less bargains around.
Now, hindsight is a wonderful thing. We know now exactly what happened in 2011 and in every year since then. As it turned out, 2011 remained pretty flat generally, with quality properties in blue-chip areas seeing a bit of modest price growth. 2012 was much the same until November when we started seeing some subtle changes. At the time we were wary and continued applying property fundamentals when advising clients – just as we do today.
Buyers who took advantage of these conditions in 2011 and 2012 and bought (I can’t stress this enough) A-grade property then experienced as much as 100% growth over the next 5-6 years. That’s right, their properties doubled in value over that period. If it was their home, that growth is completely tax free. If it was an investment property, that growth provided an amazing return on investment.
In order to go against the tide and buy property in Sydney now, buyers need confidence that they are making wise decisions. They need a solid framework for making those decisions in the face of a lack of social proof. Not any old property will do, only some fit the criteria. Send us an email if you’d like to know more.
First published: November 2010
Updated: January 2019
Please note: 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.