Sydney’s property market will face its first big test of 2019 on Saturday with around 100 properties set to go under the hammer.
First home buyers and bargain hunters are expected to flock to auctions tomorrow, chasing properties ranging from a North St Marys four-bedroom home with a $550,000 guide to a $2.8 million Lindfield bungalow.
While agents are hopeful following strong inspection numbers in January, prices are still predicted to fall another 6-9 per cent this year as buyers and vendors await next week’s final banking Royal Commission report and looming State and Federal elections, SQM Research predicts.
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Right now an average Sydney home costs $808,494, the same it did in August 2016, according to the CoreLogic Hedonic Home Value Index. A further 9 per cent drop would see that figure fall to $735,730.
REA chief economist Nerida Conisbee anticipates prices will continue to fall until after the Federal election, as buyers and vendors await the fallout from a possible a change of government.
“We’re seeing people sitting on the fence as they wait to see how the Royal Commission and Federal election will affect them, so there will be less properties going to auction in the first part of the year,” she said.
Ms Conisbee said the market could receive a much welcome boost in the back half of the year if there were minimal changes to negative gearing by a Bill Shorten government or the fallout from the Royal Commission isn’t as severe as anticipated.
CoreLogic auction analyst Kevin Brogan said north shore and eastern suburbs markets that bucked the trend in 2018 and remained strong will continue to be the top performing areas for auctions this year.
“These are desirable places for buyers because of what they offer, but they also have tight levels of stock, which has kept demand up while compensating the lack of energy in Sydney’s property market,” he said.
Despite Sydney-wide clearance rates sitting under 50 per cent at the back end of last year, Richardson and Wrench chief auctioneer Peter Baldwin said auctions would still remain the most effective way for vendors to sell their homes.
“The auction process creates a sense of urgency, which is why properties that go to auction gather more interest and sell much faster than private treaty sales,” he said.
One property that a renewed group of younger buyers is expected to flock to tomorrow is a three- bedroom home at 46 Merindah Rd in Baulkham Hills. Belle Property Castle Hill agent Karen Jeffress said first home buyers and young families have been the sole buyer group for the property, which has a price guide of $1 million.
“The falling prices have been a bonus for that sector, they now have more hope and confidence of getting into the market,” Ms Jeffress said.
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