Many Sydney buyers are ‘vultures’ on hunt for bargains, experts say

Sydney’s prolonged housing market downturn and ongoing recovery have attracted a very particular type of property buyer who is hoping to swoop in on sales before rivals flock in.

Auctioneer James Pratt said most homes sold under the hammer for below their peak prices.

Sydney’s housing market has been on the rebound over recent months after a prolonged downturn — but many of the buyers vying for homes have been “vultures”, the founder of a property tech company claims.

Chief executive of property app Soho Jonathan Lui said there was a large contingent of buyers who were eyeing the chance to get a bargain before runaway growth in prices returned to the market.

They were typically active in suburbs where prices had the biggest falls over the past two years and where buyers were no longer active, he said.

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The hope was they could steal a bargain while rival property seekers were too fearful to engage with sellers.

“You might call them vultures,” Mr Lui said. “Counter-cyclical investment is all about being brave when everyone else is afraid. You’re trying to pick a winner when most people only see losers.”

Oran Park in southwest Sydney. The region has attracted counter-cyclical buyers.

Mr Lui pointed to Soho data that showed three of the top 10 most popular suburbs for buyers were also some of the areas with the biggest drops in prices over the past year.

They included Redfern and Strathfield, where values dropped by about 16 per cent, along with the Sydney CBD, where values dropped nearly 12 per cent.

Buyer’s agent and InvestorKit director Arjun Paliwal said southwest Sydney was also popular with counter-cyclical investors because prices were $65,000 to $110,000 off their peak, but few other buyers were capitalising.

“It is a rare client who has the risk appetite to go against the grain. Most (are) buying in rising markets in other states rather than here in Sydney,” Mr Paliwal said.

Auctioneer James Pratt said most of the homes he sold under the hammer in recent months were exchanging at prices below their peak, making it “an excellent time to buy” because some buyers were still scared of paying too much.

These conditions were temporary, he added. “Time may be running out, markets like this don’t last long,” Mr Pratt said.

McGrath-North Ryde agent Stefon Bertram said buyers could pay a high price for waiting too long, since those who missed the bottom of the market would be up against considerably more competition.

“It may be a while between drinks for the investors who don’t buy as a result of missing the bottom,” he said.

“If you buy low, you may then have to wait for a while for it to bottom out again over the next seven to 10 years before you buy again.”

Originally published as Many Sydney buyers are ‘vultures’ on hunt for bargains, experts say