After two years of pandemic-related disruption, the Sydney property market is in the process of recovering and evolving. While this presents uncertain terrain and questions remain, there’s a few key trends that we can look to that shed light on what we can expect this Financial Year.

Eased path to entry

The first and perhaps most timely prediction is that the re-emergence of first homebuyers will gain pace. Despite the pressure of Interest Rate rises (the latest being another 50 basis points to reach a cash rate of 1.35%) and other barriers to entry, the State Government now offers ‘First Home Buyer Choice’ which allows buyers to forgo stamp duty in favour of an annual property tax on purchases up to $1.5 million. On an applicable property, this could mean paying approximately $3,000 a year instead of a lump sum of over $60,000 in stamp duty. Such initiatives to help boost home ownership in NSW are complemented by the softening market which, in some areas of Sydney more than others, are presenting less competitive buying environments.

It's possible therefore that this will encourage vendors within the sub-$1.5 million price bracket to sell, which could lead to an increase in stock and activity in this sector. We’re already experiencing this, with 13 of our BresicWhitney agent teams closing on sub-$1.5 million properties in the last week alone.

Savvy investors ready to seize

These market conditions will also continue to present opportunities for investors, particularly those who consider themselves towards the savvier end. Often without the emotional drive, ‘must have’ requirements and financial limits that first homebuyers often possess, the market will nurture opportunities for savvy investors to acquire a wider range of asset types than first homebuyers, across an increased suburb pool.

With price, it’s all about the present

As agents, we need to be benchmarking property prices on what happened in the past week or at most, month. It’s no longer accurate to compare the environment to the earlier months of 2022, nor is it to expect to a similar result. Not only is it our job as agents to ensure that we set realistic expectations, but we must also never forget the responsibility that comes with selling a property – it’s often a life-altering decision for vendors and should be treated so.

This of course doesn’t mean that there’s not positive conversations to be had about pricing. The figures show Sydney house prices rose 5.9% year-on-year according to CoreLogic in June, and are 20% above pre-pandemic levels.

Momentum in luxury market  

While the price bracket doesn’t always reflect a property’s holistic value or potential to sell, there will remain a pool of active buyers seeking homes towards the upper end of the Sydney market. Decisive about their desires with a penchant for design, grandeur or rarity, these buyers are often ready to act and will continue to generate demand within the $3 million - $5 million bracket.

As societal values continue to evolve following the pandemic - which has included a deeper emotional attachment to the ‘livability factor’ and lifestyle a home provides – it’s likely properties that have this coveted combination will attract strong interest and trade swiftly.

Lastly, there’ll be more post-auction action

With the Sydney clearance rate sitting at 54% compared to 73% this time last year according to Domain (9 July 2022), it’s obvious the market’s changed. While our BresicWhitney clearance rate remains strong (64% in June), more than 50% of our properties scheduled for auction in the last week of the month were negotiated successfully in post-auction scenarios. This highlights the need for agents to remain committed to a client, not a timeline. The auction isn’t the end of a campaign, it’s a chance to open dialogues with serious buyers.

It's much like how a changing market isn’t always a time for radical concern or action. There’ll be challenges, but there’ll be opportunities too for those who look for them. It’s about assessing the openings, adapting strategies, and always advising with wise judgement. At least that’s my view.