The Spring selling season is nearly upon us. (Pictures by Julian Andrews).
The Sydney residential market looks set to kick off spring with a bumper number of offerings.
Over the past month 6000 new listings have hit the Sydney market, which is up 27 per cent on the same period last year. These early bird offerings have taken the total Sydney listings to around 20,000, which is two per cent less than the same time last year. So there is not yet an oversupply, but it could be coming.
Interestingly the national 2020 spring selling season is going to kick off with reduced levels of listings across Australia, down by 12 per cent, according to CoreLogic.
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Park your boat for the price of a Sydney home
As much as the pandemic has and will continue to impact on listing volumes, and prices, life goes on for many. There’s always a need for more or less bedrooms, the wish for a tree or sea change, divorce, listings under executor instructions to avoid capital gains tax, and maybe just grabbing the chance to buy the home that you’d always wanted.
Sydney has around 20,000 listings at the moment. John Feder/The Australian
So that provides a floor for consistent property turnover. The rest is a bit more discretionary or mandatory.
The changing job landscape is likely to influence the market over upcoming weeks, and then well into 2021. Sadly much of it will be by employees who have lost their jobs, and business owners who have lost their business incomes.
It has been investors rather than homebuyers who have moved quickly in reaction to pandemic, possibly with concerns about sustaining their rental incomes.
But there will be many more households thinking of selling and taking up renting for the time being. Looking back, the property cycle over recent decades was barely impacted by rising high unemployment, so this is really going to be an uncharted challenge for the market.
It comes as interest rates are at historic lows, but that is little comfort for households without income.
Houses have been taking 45 days and units 46 days to sell this winter. Photo by Gaye Gerard/ SundayTelegraph
AMP Capital chief economist Shane Oliver has suggested the market was in “the twilight zone” with government support and bank payment holidays protecting it.
The Sydney fresh listings data is a spike that could test the market towards the end of spring, should it be combined with the usual seasonal spike. Interestingly, vendors have not yet been forced into any serious price discounting as they meet the market.
Houses have been taking 45 days and units 46 days to sell this winter – a reasonable time frame. Vendor discounting for private treaty does not show signs of distress selling. Sydney discounting sits at 2.6 per cent for houses and 2.9 per cent for units, which suggests estate agents are doing a great job with their advice to vendors on pricing.
Sydney saw a 0.9 per cent decline in values in July and by 2.1 per cent during the quarter.
But the $866,000 dwelling median was still 12 per cent up on the same time last year.
CoreLogic’s head of research Tim Lawless has noted Sydney’s housing markets had remained relatively resilient through the COVID-19 period so far.
It appears the dearest markets have taken the bigger hit.
Sydney’s upper quartile values are down 2.5 per cent over the past four months, while the lower quartile values are down just 0.1 per cent.
The data highlights Sydney has many market segments and just how important it is for agents to closely understand the shifting trends.
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