Real estate Sydney: Why ‘Mixed up’ market offers great opportunities for buyers and sellers

Sydney’s property market is as confusing as it has ever been but significant opportunities are opening up for savvy buyers.

In my 35 years of real estate I have never seen such a mixed up market as the one we have on right now.

On the one hand we are seeing every week some phenomenal results, sometimes $1 million over reserve. Then in the same market, some cracks are appearing.

Two months ago I saw the hot air beginning to slowly come out of the property balloon. I saw a few more properties being passed in, and an increasing number of properties sold prior to auction (normally a sign the agent feels they won’t have too many strong bidders on auction day, hence the decision to wrap up the sale beforehand).

Buyers were also getting fed up with the crazy prices and started shifting from fear of missing out to fear of paying too much. Since then of course, fixed rates have gone up and clearance rates for the last month or so have dropped a touch.

The market is giving off some confusing signals. Picture: NCA NewsWire / Nikki Short

WHY ARE HOUSE PRICES STILL CRAZY?

So why do we still see some property achieving crazy high prices?

The simple answer is, there were too many buyers to start off with. So even if 75 per cent of the buyers disappeared, there is still enough to get a good result if you have a decent home (not unit) in a decent spot.

Furthermore, the deal stacks up for buyers. Even with the price increases in the last 6 months, the deal still makes sense with 2 per cent interest rates.

So what does the near future hold for buyers and sellers?

Let’s start with the people thinking of selling. Go now. Sooner rather than later. Winter has less property on the market than spring. Plus there are buyers around now. Less than before but enough to get you a good result. There may be less in spring. Also like last year, there is no European vacation this year, no one is leaving Australia for sometime. Winter real estate will keep turning over apart from July school holidays that may see some people go to the snow or Port Douglas.

Tom Panos see opportunity in the market for buyers and sellers. John Appleyard

However, the main reason I would be selling now is that come spring I am expecting stock levels to grow rapidly which will mean there will be pressure on prices. Don’t get me wrong, prices won’t collapse, but they will soften. Most sellers have a belief that homes sell better in spring because they look better. Not true, they sell better in winter, when there is less competition.

LIST NOW, LAUNCH LATER

A strategy I love is to list in winter – launch in spring. You get the best of both worlds. If an agent comes across the ideal buyer, you can sell in winter and if not, you can go to a full spring launch marketing campaign.

For buyers, I’ve got good news.

This is the best buying opportunity I am seeing since this market shot up late last year. I am also seeing a lot of buyers not showing up to auctions thinking they are going to go too high, and in turn are missing the chance to buy as there are less buyers to compete with. Furthermore I see spring to be a major buying window of opportunity, so get ready if you are a buyer.

Trying to time the market isn’t a great idea. Picture: NCA NewsWire / Nikki Short

However for buyers who are buying to live in, I suggest that timing the market is not what you should be doing.

You should be buying a home based on your life and not based on the market. You don’t want to buy a home that’s good value but it’s not really going to suit your life long-term, as you will need to sell it at a later stage which is going to mean more costs like stamp duty, legal fees, and agent fees. So if you are a buyer, just buy a home you want, even if it means you will stretch yourself a little.

If you are buying and selling at the same time you need to remember: you are in a revenue neutral position. You sell high – you buy high. You sell low – you buy low.

I occasionally get asked by people, but what about the strategy of sell high, buy low?

My advice is if you’re feeling lucky, buy yourself a lottery ticket and don’t experiment with this plan. I have seen some vendors sell when the market is hot and then wait until it drops to buy again.

Some are still waiting.

Tom Panos has been a highly respected figure in the local real estate industry for three decades. He is Australia’s leading real estate coach, a sough-after auctioneer, founder of Real Estate Gym and a Sky News commentator.