After two years of soaring prices experts have ruled Sydney’s pandemic-induced real estate boom “officially over”.
Auctions in the NSW capital are passing in without opening bids, clearance rates are falling and more properties are taking prior offers, with conditions only likely to get tougher if interest rates rise later this year, as predicted.
The boom is 100 per cent over. In February, we went from nuts to normal. In September, there was the fear of missing out, but now for buyers, it’s been replaced by fear of overpaying.
Now that buyers have more options, new property listings are 13.2 percent higher, according to REA data, than this time last year. Sellers who have got a strong reason to sell are reducing the price to meet the market.
More than one in ten homes in the NSW capital are selling for less than they were initially priced at because the real estate industry is saturated, with too many people wanting to sell and not enough buyers to go around. It could come as a welcome reprieve for aspiring first home buyers who have been largely priced out of the market after property values rose by 25 per cent last year.
The data found that as of last month,10.5 percent of homes in Sydney were lowering their prices. At the peak of last year’s property boom in July, that number was half as much, with only 5.9 per cent of homes having to discount their value to be snapped up.
Now, when a Sydney house reduces its asking price, it goes down by an average of five per cent once, Domain reported.
Meanwhile in Melbourne, the number of discounted properties stands at nine per cent, with a price reduction of 4.7 per cent on average.
In bad news for sellers but great news for buyers, one Sydney home relisted $100,000 cheaper than its original asking price.
Inside the Parramatta home that slashed its price by a whopping $100,000.
Buyers were getting choosier, which was leading to a housing slowdown. Buyers are getting more careful of paying too much rather than paying out of fear of missing out. We’ve gone into 2022 with much better buying conditions
To top that off, there are too many homes on offer, people see it as a good time to sell their properties because “they’re timing it when prices are at their peak and interest rates haven’t gone up,” she explained. However, this had the added side effect of flooding the market with housing stock. With interest rates expected to rise in the next several months, Dr Powell expects to see more houses forced to re-list at a cheaper rate.