Spring is the traditional time to sell a home, but many owners are seeing the benefit in moving early this winter.
Some are driven by changes in circumstance or hope their property will stand out while there is less competition from other sellers, while others are pushing ahead in hopes of getting a better deal than they might come springtime as rising interest rates put downward pressure on prices.
McGrath chief executive John McGrath said buyer and seller confidence had already been affected by rising interest rates, and uncertainty about how high they would go.
About 10 to 20 per cent of buyers had stepped out of the market, but the volume of homes for sale was also down 15 to 20 per cent year-on-year, McGrath said. Most sellers on the market now were driven by life changes.
“The traditional drivers – births, deaths, marriages, divorces – are still the main reason properties are turning over. Life goes on, people for various lifestyle reasons [need to sell].”
Vendors were also keen to act sooner rather than later, concerned
prices could fall further, as interest rates rise and the number of homes for sale increases once the busier spring selling season arrives.
“Even though [sellers] know prices are down, they know listing inventory is down now and are making their own assessment that it might still be a good time to go to market.”
McGrath Real Estate had seen prices pull back 10 to 15 per cent, he said, but A-grade homes were holding their value well. He expected the correction to last another 12 to 18 months, and felt prices would decline about another 5 per cent, then plateau for a few years.
He said the pullback in prices made little difference for those buying and selling in the same market, and sellers with realistic expectations would have no trouble finding buyers.
The falls have been uneven and CoreLogic data puts Sydney’s overall peak to trough dip so far at 4.4 per cent.
Buyers are still out and about, if the price is right. Photo: Peter Rae
New listings in Sydney last month were down 8.4 per cent from May, and 2 per cent year-on-year, on Domain data. But total listings were up 13.1 per cent year-on-year, as homes languish on the market longer.
ANZ head of Australian economics David Plank said vendors would likely pull back from the market, as rising rates cut borrowing power and reduced buyer demand. This would result in fewer listings, which could moderate price falls, but he still expected an orderly decline in values.
The bank revised its cash rate forecast this week, predicting four more double hikes to reach 3.35 per cent by November.
“We’ve been saying since the start of the year that the
cash rate would be higher than 3 per cent, and prices would fall by 20 per cent over this year and next year, we’ve just brought forward that timing.”
Accurate pricing was key for those coming to market, BresicWhitney sales agent and director Shannan Whitney said. Buyers were still active, but no longer prepared to pay a premium.
Most vendors were being driven by lifestyle changes, and knew they needed to lower price expectations from last year’s heights. While prices had pulled back, many felt selling conditions in the quieter winter months would be stronger than later in the year.
“I don’t think anyone in the marketplace thinks it’s going to be better [later this year],” he said.
For Randwick seller Leeanne Martinez, 53, the timing was right to
downsize from her three-bedroom family home of more than two decades, which has a $3 million price guide. Her decision to sell was less motivated by the market, and more the timing of a recent renovation.
She has her “fingers and toes crossed” for a good price, but has realistic expectations.
“I’m not overly worried. I’m not overly confident, but I’m also not overly greedy and I think that makes a difference,” she said.
“I [decided to sell] now because it’s ready. To me, winter, spring or summer doesn’t matter, it’s such a beautiful space, even when it’s raining outside.”
Martinez, who plans a
sea change, wanted to sell first and then take her time to buy.
Her selling agent Cristian De Nigris of Ray White Eastern Beaches said house prices in the region were holding up relatively well, due to more limited supply, and renovated homes were performing best, as increased building costs and delays reduced the appeal of
Life changes were the key factor for most sellers, but some were bringing properties to market early to take advantage of lower supply levels, and get in before further rate hikes.
“People are pulling the trigger now before prices get grimmer … it’s going to get a lot harder before it gets better, given more rate rises are coming,” he said.