Suburbs where the biggest discounts are offered

She said the regions where the discounts had fallen compared to last year had peaked earlier, such as the eastern suburbs – the northern region.

Westpac senior economist Matthew Hassan said it was clear the market had entered a correction phase and it was time for a seller to get out.

Buyers bid more cautiously at auctions as there is more to choose from and they are wary of future rate hikes.

Buyers bid more cautiously at auctions as there is more to choose from and they are wary of future rate hikes.Credit:Peter Rae.

“There will be more shocks in sentiment and more decline in buyer sentiment, and we think we are already in a correction phase,” Hassan said. “We will see clear evidence of a correction phase and a real shift to a buyers’ market after a seller’s market in the last 18 months.”

He said that with more rate hikes on the way, sellers had a choice to leave now or wait between two or three years before making a “comfortable sale.”

“Unlike previous periods, this time it looks like a much more challenging inflation and an ongoing period of rapid rate hikes. They’re either trying to drum up more buyers by lowering their price expectations, or they’re taking it off the market and waiting.”

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Trent Tarbey of McGrath Brighton Le Sands said sellers in the Rockdale and Kogarah area were initially asking for prices achieved last year, though the market has continued since.

“Anything that has been transacted in the past six to eight weeks is a more true-to-life representation. The reality is that we are going through a weaker market compared to what has been,” Tarbey said, adding that most good-quality homes are still were always sold in a competitive auction environment.

“Sometimes they might go up for sale” [as private treaty] for those who are not so desirable or marketable.”

David Murphy, director of David Murphy Residential, said the gains from the second half of 2021 have already been wiped out in regions like Mosman and North Sydney, which are market leaders in ups and downs.

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“We’re seeing a higher level of price adjustments as some sellers are trying to get prices that were reached in the last quarter of 2021, for example, and are now out of line with the market,” Murphy said. “So those gains have been erased in many cases.”

He noted that for now, prices are still at or equal to 12 months ago.

“These sales prices correspond to the first and second quarters of last year. Prices are still well above the level of 12 months ago,” he said.

“It’s actually a healthy thing for the market. It’s gone down, it’s a slightly more level playing field for buyers.”

Michelle May, head of buying agents, Michelle May, said there were generally bigger discounts in Sydney.

“I get a lot more calls from agents… because they don’t have the depth of buyer pools that there are. That didn’t happen six months ago,” she says.

She said it went hand in hand with regular emails from agents about price adjustments.

“Six months ago the price guides went up and now a lot of them are coming back down and [there are] agents who don’t want to quote at all and say they want to see what the market is saying. The whole conversation has changed.”

May said discounting was often property specific, with Class A properties still finding enough competition to go to auction and get a strong result.

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