Tom Haylock and Julia Buckland got a bargain. Picture: Adam Yip
Inner Sydney has become a fertile hunting ground for bargain hunters as panicked investors try to offload apartments at lower prices in the hope of speeding through sales.
Apartments in the CBD and surrounds have recently been listed at more than $250,000 below the prices they were listed at before the pandemic hit, with some listed as “must be sold” or “urgent sale”.
The deals have come as sales data revealed unit prices in the region dropped by an average of 8 per cent over the past three months.
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Advertised unit prices in the CBD were also about 15 per cent lower than a year ago, according to SQM Research’s Asking Prices Index.
The falling unit prices were a contrast to the rest of Sydney, where low housing supply has largely insulated the market from the economic fallout from coronavirus.
$250K DISCOUNT: This three-bedroom unit in a building at 361-363 Kent St was first listed at $1.55m, now it’s $1.35m.
Prices for all housing categories across the Greater Sydney area have dropped by about 3 per cent since the pandemic first hit, with house prices in regions such as the eastern suburbs and northern beaches little changed.
The weaker inner city unit market was largely the result of landlords struggling with long-term rental vacancies.
Many relied on international students, travellers and hospitality workers to tenant their properties but they were no longer getting rents because of travel restrictions, job cuts and younger renters moving back in with parents.
My Housing Market economist Andrew Wilson said the falling rents would encourage more investor owners to sell units but, with fewer other investors in the market to buy them, many would struggle to attract buyers.
$95,000 DISCOUNT: this one-bedroom unit on Wattle St in Ultimo was first listed at $855,000 but is now $760,000. The 2014 price was $770,000.
This would force investor to make further price cuts. “The inner city unit market is Sydney’s weakest and will probably remain so until international travel restrictions are lifted,” Mr Wilson said.
Among the inner city units listed with a major price saving is a one-bedroom unit in a building at 161 Clarence St. The property was listed in February for $1.05m but the price has since dropped to $960,000.
A two-bedroom unit at 361-363 Kent St is currently listed at $1.35m, $250,000 below the March price.
In nearby Ultimo, a unit on Wattle St is currently for sale at $735,000-$760,000 after originally coming to market at $826,00-$855,000. The 2014 price was $770,000.
This two-bedder in Ultimo was for sale at $1.2m, now the price is $1.03m.
A similar unit a few blocks away on Jones St is listed at $220,000 below the original listed price.
Mortgage Choice director and broker James Algar said buyers prepared to act quickly often got the best bargains.
Those armed with pre-approval for a loan, a pre-determined budget and idea of what their repayments would be tended to have an advantage going into price negotiations, he said.
Tom Haylock, 32, and Julia Buckland, 29, recently bought a Warriewood home for about $300,000 below the pre-Covid price.
They were surprised to have snared the bargain after being repeatedly outbid at auctions last year.
“The property just popped up and it had a fair price guide,” Mr Haylock said.
$50K DISCOUNT: this one-bedder in a building at 433-435 Kent St, Sydney, was $780,000, now its $730,000.
“We first thought we had no chance, we were so used to being outbid, but the owner needed to sell in a hurry … our offer was accepted over another couple because we already had pre-approval for the loan. They didn’t.”
He added they were stoked to get the home for $1.4m after realising similar properties were selling for around $1.7m before the pandemic hit.
They later found out the investor owner had sold the property alongside multiple other homes. “We got the feeling it was a panic sale because of Covid,” Mr Haylock said.
“We’re really happy with it. We had gone to so many open homes and many of them were unliveable but they would still sell for crazy prices … this was different.”
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