Families upgrading to larger properties are fuelling renewed demand in the Sydney property market, jumping on the limited number of new homes up for grabs.
Agents across the city are reporting a strong push from those keen to take a step up on the property ladder as the market heads towards its next upswing.
“If they see something they like they’re jumping on it,” said Nick Rigas of The Agency. “They want to try secure something now, before it’s deemed too late.”
The downturn saw many home owners sit on their hands – resulting in the current shortage of new stock – but it was seen as a window of opportunity for some, Mr Rigas said; a chance to get better value for money.
“While taking a small loss on their property [compared to what they could have previously made], they were buying something that was out of reach two or three years ago,” Mr Rigas said.
With clearance rates on the rise, prices beginning to rebound and few properties on the market, Mr Rigas said people were increasingly looking to upgrade now, rather than risk missing out.
That was the thinking for inner-west couple Christine and John Greig, who snapped up a five-bedroom house in Haberfield this week, months after selling their one-bedroom investment property in Dulwich Hill and three-bedroom terrace in Petersham.
While prices fell across all three suburbs over the the year to June, pricier Haberfield took the biggest hit – with the median dropping $236,000 to about $1.8 million.
Keen to move their family of four before their eldest son starts school next year, the pair started to make their move “at the bottom of the market”.
But finding a new home proved trickier than expected – they had not counted on renewed market confidence after the election or stiff buyer competition.
“[The election] was when we realised we had to get on and buy something quick and then by June and July there was no stock, then the loosening of lending; we found we could increase how much we could spend but so could others,” Mrs Greig said.
“There were a lot of people wanting to upgrade … but there wasn’t a lot of four-bedroom properties. Anything that was half-decent was really expensive.
“Back in February, we were thinking we were going to be able to buy a house that is pretty much done … now we are buying a house that needs a bit of work.”
Amit Nayak of Ray White Parramatta Group says the number of buyers at open homes has tripled since the election, with upgraders now making up the majority of attendees. With a shortage of new stock, particularly free-standing homes, he only expects competition between upgraders to increase.
Domain research analyst Eliza Owen said with indicators suggesting the Sydney market was heading into its next upswing, it was not surprising that some urgency was returning to the market.
“Auction results are showing a really rapid turnaround in demand, so buyers may be conscious of getting their upsizing done quickly in order to not miss a window of opportunity while prices are coming off the back of a two-year low,” Ms Owen said.
While upsizers could potentially get better value for money in a downturn, the issue – as found by the Greigs – was that good properties were harder to come by, said buyers’ agent Brooke Flint of Flint Property.
“I don’t think people have necessarily missed the market,” she said. “I’m seeing quality property being flushed out from the downsizers and seeing a lot of deceased estates. The people that have been holding off … are now selling.”
“We are seeing a strong push from local buyers looking to upgrade,” added Glenn Curran of McGrath Lindfield.
“There are several families from the lower north shore, in particular Mosman, that have been looking to relocate in anticipation of the start of the 2020 school year.”
Ms Flint urged aspiring upgraders to work out exactly why they wanted a bigger home, before understanding what it was worth and what they had to spend.
Being open to a wider variety of locations and buying and selling in the same marketplace was also key. She added recent price movements would make little difference for those looking to buy for the long-term.
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