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Sydney home buyers have fewer properties to choose from this spring as the number of new homes for sale plummets.
New seller activity in some of the city’s most sought-after regions is down more than 30 per cent year-on-year, new figures show, and the number of sellers willing to hit a market where prices are falling has dropped below levels seen during the quieter winter months and the last downturn.
The number of northern beaches homes listed for sale last month was about a third lower than the same time last year.Credit:Steven Woodburn
Spring typically brings a boost in sellers, but the opposite occurred in September, Domain data show, as homeowners stay put and the number of homes listed for sale dropped 13 per cent from August.
That left new listings 17.5 per cent lower than the previous September, when Sydney was still in lockdown, and 10.3 per cent lower than in September 2018, amid the previous market downturn.
The sharpest drops were in the city’s more expensive markets. New listings fell at least 30 per cent year-on-year in the northern beaches, eastern suburbs and north shore, and dropped more than a quarter in the Sutherland Shire and city and inner south.
Buyers face a dire shortage of quality homes, said buyers’ agent Peter Kelaher, managing director of PK Property. Some northern beaches and north shore agents had reported that new listings were 30 to 50 per cent lower than levels typically seen in spring, but he added that all markets were affected.
“A lot of [homeowners] are sitting on the fence … and people are struggling to find a property to buy,” he said, adding that reduced supply could further deter activity as those wanting to move decided to wait until there was more choice.
Annual declines were more subdued in the city’s west, where sale volumes were obliterated last September by tougher lockdown restrictions.
New listings were down 1.6 per cent in Parramatta, 8.9 per cent in the Baulkham Hills and Hawkesbury region, and 10 per cent in the outer southwest. In Blacktown, they were up 14.3 per cent year-on-year, however, like in most regions, new seller activity was lower than that seen in August.
Barrenjoey senior economist Johnathan McMenamin said sellers acted as cautiously as buyers during market downturns. The uncertainty created by falling prices and a rising cash rate would prompt some to delay sale plans, particularly in more expensive markets.
“The top end of the market tends to lead with the most significant [price] swings and this cycle is no different …and it makes sense that sellers will be pulling back from listing in a market where prices are falling faster,” he said.
The drop in sellers coming to the market could help to moderate price declines as it reduced supply, McMenamin said, however, he expected some pick-up in listings as spring progressed.
The total number of homes for sale last month is 23.1 per cent higher than a year ago because some properties that are being listed are taking longer to sell and sitting on the market waiting for a buyer.
LJ Hooker Group’s head of research Mathew Tiller said it had been a slower start to spring. The agency had a similar drop in new listings as sellers pulled back, but also a slight build-up in the total number of homes for sale as properties took longer to find a buyer.
“There is an opportunity for those that are thinking of listing … because there isn’t as much competition [from other sellers],” he said. “It’s a bit of a captive market for those who are willing to list.”
Woolloomooloo seller Casey Castro hopes the reduced supply will work in her favour as her family prepares to list their two-bedroom terrace to upsize. Given the price growth seen since they purchased in 2015, they’re not too concerned about selling in a cooler market than last year.
Casey Castro, with her children, Jupiter, Reino, Monty and Eddie, is preparing to sell her family’s Woolloomooloo home.Credit:ouise Kennerley
“It’s kind of nice to come into [the market] with not too much competition; because it’s not saturated [with homes for sale], we’re in a bit of a better position,” Castro said.
Their selling agent Dean Jarman, principal of Ray White Centennial Park, said larger supply drops in the inner city and east could be due to homeowners in such markets facing less pressure to sell as mortgage rates and the cost of living climb.
“There is a certain point of luxury to [being able to say] let’s sit back and see what plays out and then make a decision. Unless the timing is right for them to make that move they won’t make it,” he said.
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