Insights

Tools, tips, industry knowledge & market trends.

When a property market turns, the tricks, trends and tactics employed by agents, sellers and buyers change too. If you identify the shift in how the market is functioning, you stand a much better chance of being on the right side of the trade. Those looking to buy or sell in the next few months will be faced with a barrage of dramatic reporting and predictions as mortgage rates rise. Staying calm, up-to-date and pragmatic is the key to winning in the 2022 property market.

 

Bait pricing by real estate agents is rampant, of this there is no doubt. As a buyer, to see a property promoted with a Guide of $2.2 million sell for over $2.7 million can be both disheartening and confusing. Is the market really that strong (some people said it was coming off) or were you misled?

That’s the question many unsuccessful buyers are asking themselves as they leave auctions defeated and disheartened.

The first quarter of 2022 saw listings up and sales volumes down when compared with 2021 numbers and trends. Property prices have stopped rising across the board. There are still sales that exceed all expectation, however this is now the exception rather than the norm. The power balance between buyers and sellers is much more balanced than it was during the 2021 boom.

During the pandemic, Short Stay Rental Accommodation (STRA) in capital cities all but disappeared as landlordsmoved their investment properties across to the permanent letting market. The additional dwelling supply that moved across to the long term rental pool in early 2020 exacerbated the downturn in capital cities, as rental markets were already suffering from oversupply at a time of diminishing tenancy demand.

At the same time, STRA boomed in the regions as Australians holidayed domestically given the International (and many state) borders were closed.

A lot is made of how expensive the Sydney property market has become in comparison with global peers. There is a second market that Sydney is a world leader in when it comes to expensive – real estate internet advertising. Homeowners pay more to market their homes on the internet in Sydney and Australia, broadly speaking, than just about anywhere else in the world.

During the recent real estate boom, there were an unprecedented number of properties ‘Sold Prior to Auction’. Some reports suggested nearly 50% of all auction campaigns were concluded/sold before the scheduled public auction date.

The most common reason a pre-auction bid is accepted is because the agent and the vendor collectively deem the offer to be so strong, they don’t want to risk losing the enticing bid and potentially sell for less later. Quite simply, they are not convinced a higher price could be achieved at the auction and they are probably correct in that assessment.

One of the challenges a vendor is likely to face in 2022 is that the market peaked in 2021. Acceptance of this point will make selling easier. Denial of the fact the market peaked in 2021 and is bouncing off all time highs in 2022 can cause a vendor to unintentionally make a costly mistake.

There will still be strong sales and record prices achieved in 2022. But there won’t be boom time results across the board like there was in 2021. Anyone selling in 2022 needs to be careful as to how they treat/respond to genuine fully priced offers.

One of the challenges a vendor is likely to face in 2022 is that the market peaked in 2021. Acceptance of this point will make selling easier. Denial of the fact the market peaked in 2021 and is bouncing off all time highs in 2022 can cause a vendor to unintentionally make a costly mistake.

There will still be strong sales and record prices achieved in 2022. But there won’t be boom time results across the board like there was in 2021. Anyone selling in 2022 needs to be careful as to how they treat/respond to genuine fully priced offers.

When and if the property boom ends, many sellers think the key to a successful sale is to wait it out and the boom will eventually return.

But if the market suffers any sort of a decline in price, the worst thing a seller can do is ride the market down.

The key to a successful sale is accurate pricing.

Many suburbs in the Sydney market are still performing very strongly and may continue to rise in 2022.

Predictions for the 2022 Sydney Property Market are many and varied. Getting consensus from experts, commentators and analysts on how the year ahead will unfold is impossible.

The best path forward is to listen to the contradictory reasoning of the many opinions out there, assess the likely factors that will shape the market and watch events unfold.

To assist you in reading the play, we have outlined the critical factors likely to determine 2022.

When you are selling a property, the only thing more nerve wracking than an early offer is not receiving an early offer.

As the property market transitions from boom mode to a more stable and predictable market environment, vendors cannot afford to make the wrong decision with the right offer.

In a rising market, a vendor can decline a good offer knowing that another strong offer is highly likely to emerge.

As we head toward a close for 2021, property research house Corelogic has Sydney house prices up 29.1% for the year, whilst apartments are up 15.3%.

The explosion in property prices was a market reaction that few predicted or saw coming at the end of last year.

In fact, the market finished 2020 somewhat subdued, but once the market recommenced in January 2021, almost every sale in the first 5 or 6 months of the year exceeded the agents and vendor’s expectations.

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