Hans and Alicia Beck at their Kingsford home up for auction. Picture: Sam Ruttyn
Savvy Sydney buyers can snap up homes at bargain prices as the property market continues its slide in what experts predict will be an unprecedented spring selling season.
First-home buyers with their eyes on out-of-reach suburbs may be able to expand their search area if expert predictions that Sydney values could fall by at least 10 per cent in the next year are realised.
Sydney’s median home price has already dropped by about 2.6 per cent over the past four months, research from CoreLogic revealed.
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Further price falls would likely equate to an additional 0.5-1 per cent drop in values each month until midway through 2021.
But major differences have already emerged in city regions, with housing experts revealing an increase in families wanting better houses could lift detached house values in some areas.
Meanwhile, sellers in areas heavily supplied with units will have to slash prices because of a drop in activity from investors.
Home values in the unit-heavy Parramatta region dropped by about 1.1 per cent over August, more than double the 0.5 per cent drop for the Greater Sydney area as a whole. There was an even bigger drop of 1.3 per cent in Ryde, another emerging high-rise apartment hub.
Prices in Sydney’s tightly held eastern suburbs were unchanged for the month, while strong upsizer demand also kept prices flat in the Hills district.
The biggest drop for the month was on the northern beaches at 1.5 per cent but CoreLogic analyst Eliza Owen said this followed a surge in values in the region before the pandemic.
“Prices have further to fall because they had just gone up,” she said, adding sellers may have acquiesced to this by lowering their expectations.
Marlene and Michael Richardson, with kids Levi ,12 and Liliana, 10, are taking their East Ryde home to auction this weekend. Picture: Tim Hunter.
Realestate.com.au chief economist Nerida Conisbee said Sydney was normally an “uneven” market but the pandemic made those differences “extreme”.
“Not every property in every suburb is going to be affected the same,” she said. “It will be easier to get a bargain on a unit than a house.”
Ms Conisbee added the biggest risk for the market was apartment landlords defaulting on their mortgages due to plunging rents.
“The strength of the market will depend on how long banks keep giving support but we are in a very different market from previous (downturns) because banks remain well capitalised,” she said.
McGrath Estate Agents founder John McGrath said lower unit prices could give a leg up for first homebuyers.
Auctioneer Stuart Davies at the auction of a home sold for over $7m. Picture: Gaye Gerard
“The softest section of the market for the next six months is the investment unit market,” McGrath said.
“There is a window of opportunity for first homebuyers and investors to buy units below $750,000 at subdued prices. I think this window will close by mid-2021 as things normalise.”
Marlene and Michael Richardson are taking their East Ryde house on Jeanette St to auction Saturday and said they were trying to stay “realistic”.
“We know we’re in tough times,” she said. “We have had a lot of groups through but it could go either way … we wish the new owners luck. I think they will love it here.”
Kingsford homeowners Hans and Alicia Beck will be taking their three-bedroom house on Marville Ave to auction on September 19 and said they were feeling confident.
The Beck’s home on Marville Ave in Kingsford.
“Not many good quality houses are in the market in this area,” Mr Beck said. “We are a bit nervous because of the economy but we are hoping a family will fall in love with it. It’s a great home, there’s not many like it.”
The couple’s agent Charles Stevens of McGrath-Coogee said upsizer activity was strong and many of the buyers looking for larger homes had big budgets.
Some were prepared to spend more money because of the lack of travel and entertainment options during the pandemic, he said.
ANZ has projected Sydney home values will have fallen by about 13 per cent from the start of the pandemic to mid-2021. NAB’s outlook is for a 10-15 per cent drop in prices nationally, while CBA forecasted a drop of 10-12 per cent.
HOME PRICES CHANGES IN SYDNEY REGIONS
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