Sydney set for Spring property war

Sydney is set to become an extreme “seller’s market” this spring as property investors and first-home buyers scramble for a dwindling supply of entry level homes.

Competition for home sales has already hit fever pitch in some areas, with an average of up to 150 serious buyers vying for every one home listed for sale, PropTrack figures showed.

Experts revealed the stage has now been set for a show down between property investors galvanised by lower interest rates and first-home buyers capitalising on government incentives.

They’re expected to be targeting the same properties, putting high pressure on home seekers wanting the most affordable properties, while sellers will be able to call the shots.

First home buyers have a renewed confidence heading into spring.

Ray White chief economist Nerida Conisbee said it was “definitely a sellers market” with low stock and high demand.

NAB home lending executive Denton Pugh said rate cuts and reformed incentives have restored a sense of optimism among buyers.

“With recent rate cuts and confidence returning, we’re seeing more Australians, especially first-home buyers, taking steps towards buying a home,” he said.

The federal government announced last week that it would be expanding the roll out of its First Home Guarantee Scheme in October, which allows first-time buyers with 5 per cent deposits to avoid paying pricey lender’s mortgage insurance.

Under the changes, the price cap on Sydney properties eligible for the scheme will increase to $1.5m.

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NAB Home Lending Executive Denton Pugh. Picture: Supplied.

Ms Conisbee said there was now an “enormous amount” of incentives available for first-time buyers. “The market (that’s) the hottest at the moment is anything that fits within the limits of the 5 per cent deposit scheme”.

Real Estate Institute of Australia CEO Leanne Pilkington said first-home buyers could expect to be competing with investors.

“Investors have started to come back. The bottom end of the market is likely to see stronger price increases,” she said.

Ms Conisbee said interest rate cuts have largely helped investors return to the market. These aspiring landlords tended to target more affordable properties because they are easier to rent out and the returns were higher.

Rate cuts have seen investors return to the market. Picture: Steven Saphore.

Sydney’s most affordable suburbs have led buyer inquiry figures and experienced strong auction turnouts in recent months. They’re expected to be the main areas of competition over spring.

Properties in the more affordable Blacktown region have received the highest numbers of key inquiries in recent months, with data from PropTrack revealing that homes in Werrington and St Marys were Sydney’s most competitive. In Werrington, houses received 150 “key inquiries” on average.

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Real Estate Institute of Australia president Leanne Pilkington. Picture: Supplied.

Inquiry levels were also high in some pricey eastern suburbs, but the general trend was for more affordable areas to see much higher spikes in activity.

In the auction market, the most competitive suburbs have been in the inner west, including Ashfield, Newtown and Alexandria – where auctions clearance rates have been over 85 per cent, the mark of super hot markets.

On the other extreme, Sydney’s outer suburbs experienced the highest change in total listings, giving buyers more choice. Acacia Gardens in Sydney’s northwest had the highest year-on-year rise in listings at 70 per cent.

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Homeowners Kevin Fang and Ying Ying are selling in Lindfield this spring. Picture: Justin Lloyd.

Ray White Upper North Shore agent Jessica Cao said it was the optimal time to be selling.

Mother of two Ying Ying and her partner recently put up their four bedroom corner block home in Lindfield up for auction, looking to take advantage of the early spring season.

The family are hoping to upsize in the area and feel it is the right time to move.

“It is hard. We’ve already attended some auctions but didn’t get them, and we’ve put our current property up, so the timing is key.”

– With additional reporting by George Al-Akiki

SYDNEY SUBURBS BY INCREASE IN TOTAL LISTINGS

Source: PropTrack. Minimum 10 listings per suburb. Some median prices unavailable.

TOP SYDNEY SUBURBS BY KEY INQUIRIES PER LISTING

Source: PropTrack.

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