Sydney’s property market is heating up – but what does that really mean?
In a nutshell, it’s just industry speak for “there are lots of buyers in the market”.
When there are plenty of buyers and not enough properties to meet demand, the market gets “hot”, and that’s when we see prices start to increase.
In recent weeks, we’ve seen evidence that the market is beginning to take off in a number different ways…
Auction clearance rates
The Sydney property market has experienced sky-high auction clearance rates (ACR) over the last month. Of all of the homes that are going under the hammer, at least 80% are selling on auction day, which is a big increase on previous months.
In fact, in the last weekend of February, Sydney’s ACR hit 90% – a clear sign that buyers are very active.
First homebuyers are back
We’ve also got first homebuyers jumping back into the market, with first-time buyers comprising around 25% of all buyers, according the ABS.
There are so many incentives for first home buyers, including the First Home Loan Deposit Scheme, which allows them to buy with just a 5% deposit. And there’s also the fact that we have…
Record low interest rates
Mortgage interest rates are at record lows. They haven’t been this low in decades, and we’ve reached a point where it’s cheaper to pay a mortgage than it is to rent in a number of suburbs.
With all of these things driving buyer activity, there are predictions that prices will increase 10% by the end of the year. Westpac recently released a report stating they believe that Sydney property prices will grow, on average, 10% this year and 10% next year.
If that’s the case, should you act now before prices surge out of your budget?
There’s another factor driving the market right now, and that’s FOMO – which is the one big reason why you SHOULDN’T rush in.
FOMO causes you to rush in. It causes you to skip over your research and your checks and balances – you become so focused on your end goal of buying a home that you ignore the red flags (and they can be costly).
FOMO can cause you to:
- Over-pay for a property in a hot market
- Get so caught up in the hype of the “booming market” that you commit before you’re ready, and put yourself under financial pressure
- Purchase a property that isn’t quite right, because you’re worried you’ll miss out, so you settle.
There is an alternative
Instead of bowing down to the pressure of buying now, we suggest you focus on buying right.
This means buying when you’re ready – when you have your financial ducks in a row; when the bank has given you pre-approval; and when you’re ready to hit the market as a buyer who can take action and make an offer with confidence.
The good news is, we can help you do just this. We can set you up with an experienced mortgage broker who will help you work out your borrowing power, and make suggestions to get your application looking at sharp as possible – things like consolidating personal loans and debts, or paying off credit cards, can make a huge positive impact on your borrowing power.
And, with an experienced buyer’s agent on your side, we can help you find the most suitable property that matches your needs, negotiate the best price, and even find properties off market (or before they hit the open market), which gives you a competitive edge. To get “buy ready”, contact our friendly team today.