Tougher Sydney market ‘just going back to normal’, says agent

The real estate agent said: “A lot of agents are getting caught up with the head noise and we're finding that the media is making it out to be this big, big thing when it’s just gone back to normal. We are working harder, yes, but it’s just normal—we're still getting 40 people through an open house in our four-week campaign, where last year we would get 120.”

Mr Tsounias assists transactions across suburbs in the south and southwest of Sydney, particularly Bryden, South Hurstville, Sans Souci and Revesby. As in most parts of the capital city, agents have to work harder now due to rising prices and the imbalance of supply and demand.

However, contrary to the doom-and-gloom headlines spread across media right now, the current underwhelming sales statistics are not signs of an impending market crash.

Affordability

Despite the process of buying and selling being tougher and longer in most parts of the capital city due to inconsistent supply and demand, investment activity still follows the pattern of the fundamentals, according to him.

A lot of investors, in Sydney and beyond, are flocking in to affordable corridors in order to step up on the property ladder and move further in their wealth-creation journey amidst the softening state of property markets today.

Mr Tounias explained: “Our offices had the worst quarter we've had in the last 10 years in terms of sales results. Stocks are kind of dry as well, so your days on market are more, but if you do the process right, we're still finding that our suburbs are still selling quite well because we are the cheaper alternative to the east or to the inner west.”

Investors who are undaunted by doom-and-gloom headlines and want to invest in Sydney are going to areas like Arncliffe, Hurstville or Kogarah if they can’t afford properties in the east of inner west.

At the end of the day, properties are still selling. It’s only a matter of having realistic expectations, implementing a good strategy and finding the right professionals to back you up.

According to the real estate agent: “Days in the market have gone from 23 days to 30 days, which, for us, it's still pretty good, but if it's not done right at the start, I think that’s going to be the issue. It's not going to work.”

“If the owners have a lofty expectation and they leave it two weeks, agents are back peeling to try and get it done, where if it's done right from the start, we can get three or four bidders at an auction, which is a normal—nothing like the GFC (global financial crisis). We still got people wanting to buy,” he highlighted.

Investment activity

At the moment, there are a lot more houses getting sold in Sydney compared to units largely due to affordability. In the south and south west area, the average price of houses sit at around $1.2 million to $1.4 million, while new units go for over $2 million.

As a result of this trend in buyers’ activity, as well as the reluctance of most investors to buy more assets due to the softening of the markets, the stocks are beginning to pile up.

The dwelling supply is expected to go even get higher come spring, according to Mr Tounias.

However, the real estate agent believes that it’s not all bad news. If anything, it’s a sign of exciting times coming for both investors and agents, and it’s largely because of the falling prices and lack of competition in the market.

He said: “What we're finding is people are going, ‘Wait a minute, we can trade up now, we can go from our three-bedroom house and buy a bigger house rather than renovating.’ I think it's gone back to normal where people can have a look and say, ‘You know what, we like this one, but if we miss out, something else is going to come up,’ rather than saying ‘Let's pay $500 over because the next one is going to be $600 more.”

“Being in a softening market is often a good time to buy real estate to get the cheapest price possible, and, obviously, investors will want to try and get property under market value as much as possible,” the agent added.

The current state of Sydney and other big property markets across Australia may be a cause of confusion for investors due to conflicting insights about the future of property investment. However, as always, it’s a good time to buy if you can afford the asset and have the ability and strategy to hold and manage it for the long-term.

After all, the downward trend that you’re seeing could just be a normal part of the market cycle.

Mr Tounias strongly recommend doing due diligence and engaging trusted professionals in order to thrive in any property market, no matter its movements.

Tune in to Bill Tsounias’ episode on The Smart Property Investment Show to know more about his thoughts on the current condition of the Sydney property market and how investors can make the most out of its investment opportunities.