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Sydney’s fastest house price decline in decades has scared home sellers, who were less likely to list their properties for sale in October than the month before.
A seasonal spring rush of properties for sale has failed to materialise and new listings fell 2.3 per cent last month from the previous month, SQM Research data shows.
Home owners are hesitant to sell this spring.Credit:Peter Rae
Sellers are not even tempted by a pick-up in buyers attending open for inspections and auctions.
The average number of buyers attending each open property jumped 12.6 per cent in October from the month before, on Domain data.
Ray White data shows the average number of bidders at auction hit 3.7 by the end of October, the highest figure in the past year.
Economists said the imbalance of more buyers than sellers was helping to blunt price falls, but the downturn was far from over.
It comes as Sydney property prices have fallen 10.2 per cent since the peak in January on CoreLogic figures. The fastest falls in almost 40 years were recorded earlier in the year as interest rates jumped, although in the past two months the pace of declines has eased.
AMP Capital chief economist Dr Shane Oliver said even as buyers remained cautious as the Reserve Bank continued to hike rates, owners were hesitant to list. This meant there were not many homes to choose from, and this was helping to moderate price falls.
“There was a feeling through the spring selling season you’d see a rise in listings, but we haven’t seen that. That has contributed to the ease in the rate of decline,” Oliver said.
“The hit to buyers was probably at its worst earlier this year as the shock of the rate hikes hit in the middle of this year.”
He said that resulted in faster declines at the start of the downturn and has turned off vendors from selling unless necessary.
“This property market downturn will wax and wane until we get to the bottom. We’re still at relatively early days of it because we’re yet to see the full impact of higher interest rates. There is still a fair way to go,” he said.
He said listings may increase next year as distressed sales tick up when home owners have little wriggle room left with future rate rises.
“We’re not at that point yet, we’re in no man’s land at this point.”
St George Bank chief economist Besa Deda acknowledged the pick-up in buyer demand but warned budgets were constrained.
“Demand is sluggish, but it is starting to perk up a little, but it doesn’t necessarily mean they’re willing to pay higher prices in an environment where the central bank is going to raise rates further,” Deda said.
“Deals are still going through, but it is a case of lowering [seller] expectations and bringing the buyer to the party.”
For Glebe seller Rob Wills and his partner, the decision to list their home was brought on because they had to upsize to accommodate their growing family.
Jean Franco Vilaro, Maia, Rob Wills and the family dog Canela at their Glebe property.Credit:Brook Mitchell
“The reason we’re selling is purely because it’s the next stage of life for us,” said Wills, who has upgraded to a larger house in Haberfield.
“For us, we couldn’t sit there and play the market, we’ve decided now is the right time.”
Wills was undeterred by the declines because prices were still above the gains made in the past two years. He also upgraded for less.
“We’ve had the most unbelievable gains in the last couple of years, for a little bit of edge taken off that humongous gain is not a bad thing. [The downturn] could be a lot worse.”
His selling agent Matt Carvalho of Ray White Erskineville, Alexandria, Glebe and Surry Hills said the biggest price reductions were when interest rates first increased in May.
“People froze for a period, sellers at the time had to take whatever they could get because there were fewer bidders in the market,” Carvalho said.
“But as supply has gotten tighter, the quality properties are in much higher demand, instead of one or two bidders at auction we’re back to anywhere between three to six.
“Any seller in the market at the moment is selling for genuine reasons. There are less opportunistic sellers.”
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