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Potential buyers are flocking to ‘open for inspections’ in Sydney, with one buyer’s agency noting that even less desirable properties are selling fast.
Oliver Stier, director of OH Property Group, said the first weeks of 2014 demonstrated that the Sydney property market was no longer on a Christmas break.
“In December, we were seeing signs that the market was cooling a little. Properties were still selling but prices were not as outrageous and bidders at auctions were not as bullish. Quite frankly, buyers were exhausted after a year of pounding the pavement and constantly missing out. Selling agents too were happy to take a much needed break after running endless sales campaigns at a cracking pace, often condensing the marketing from four weeks down to three, or even two, weeks,” he said.
Mr Stier noted one of the first auctions of 2014 - a three-bedroom unit in Chatswood - as an example. The property was quoted at ‘over $850,000’ but sold under the hammer for $1 million.
Further evidence of Sydney’s strong market is in the high level of attendance at week day property inspections, according to Mr Stier.
The promising start to the year could yield mixed results for investors.
Savvy sales agents are intentionally trying to slow down their marketing campaigns and aren’t taking offers straight after listing in an effort to push buyers to auction and increase competition, according to Mr Stier. In these situations, investors need to stick to the fundamentals, he said.
“If you find yourself continually missing out, you may need to make significant changes to your search criteria and possibly look elsewhere,” he said.
“Most importantly, stay focused on buying a stellar property. Don’t buy a less-than-average property because you are fed up with the search process.”
Mr Stier said it was uncertain how supply and demand issues would impact on the market for the rest of the year, but buyer demand is likely to remain strong, at least in the short term.
“Time will tell if 2014 will turn out to be a rerun of 2013,” he said. “Certainly the early signs show that buyer demand is strong. One factor that will determine whether prices will ease is the supply of new stock. As is human nature, when properties sell for a high price, homeowners and investors are motivated to put their properties on the market. If enough supply enters the market, prices will level off.
“But for this to happen, there needs to really be a continuous stream of good properties entering play each week. For now though, demand seems to far outpace supply, and even the less desirable properties are selling fast and high.”