Sydney’s Property Clock: A Detailed Timeline Covering Sydney’s Property Boom
A detailed timeline of Sydney’s property boom and the key factors that influenced and affected pricing and sales strategies for all buyers.
In 2011, during the 6 o’clock (or the lowest point) of the property cycle, property prices were typically displayed at a flat price and a very low amount of auctions were the norm. A prospective purchaser would call the agent, take their time to walk through once or twice and start with a low ball offer to commence negotiations, typically shaving a nominal amount off the advertised price.
In 2012/13 the demand for housing grew due to credit easing policies. We then saw the property clock hit 9 o’clock and momentum in auction clearance rates started to rise. A new type of pricing was introduced to the market with a price guide, this would normally be a 10% range to then gauge how strong the current demand was.
After a good 12 months, the property clock shifted into the next gear as sales were recorded in the mid to high end of the sales guide indicating that demand and supply pressures were pushing the prices forward. Auction clearance rates typically stayed around the 70%-80% mark.
As soon as properties were starting to punch above the price guide advertised (2014) the “offers over” strategy was then introduced by real estate agents. This was now the 12 o’clock phase of the property clock. This particular methodology created an insecurity of how much was required to secure the property you were after.
Families who were in the market in 2015/2016 had a sense of FOMO as they would go from one inspection to another only to see an abundance of competing customers for the same stock. Once a property ticked all the boxes, paying the most first would be the best way to seal the deal. Auction clearance rates were above 80% for a brief period of time.
As all bonanzas come to an end – Mid 2017 was flagged as the decline of Sydney’s property demand, slowly turning into a buyer’s market. With an abundance of choice, buyers who were still around could negotiate stronger than ever, playing on vendor’s insecurities of not selling their home.
Unfortunately, old methodologies are out the door and to make a sale, one must meet the market. Brand new turn key products are still in high demand, however a lot of renovation rescue stock or your typical family home which required some work is starting to diminish.
Realistic pricing and understanding current market conditions are two key factors which will assist in the sale of property for 2018 and moving forward. Knowledge of similar stock which may be directly competing, recent sales within proximity and a well thought out sales strategy are also key factors which should be investigated and top-of-mind when making your next property move.
With the royal banking commission still concluding their investigations into irresponsible lending, ‘the banks’ the buyers favorite business partner in any property transaction, are much more conservative this time around.