Vendors in parts of Sydney are cutting their asking prices by as much as $800,000 as the market continues to shift.
After experiencing some of the sharpest increases during the past few years, many areas across Sydney are now starting to see values and asking prices decline.
Recently a three-bedroom house at 31 O’Donnell Street, North Bondi was listed for $6.7 million on November 4. This was a $865,000 drop from the $7.565 million the vendor paid for the property in July last year.
Meanwhile, another three-bedroom property at 53 Curlewis Street in Bondi Beach that was purchased for $3.05 million in May last year is currently being offered with a price guide of $2.7 million – $2.97 million.
Leading Sydney-based buyer’s agent and founder of Henderson Advocacy, Jack Henderson said the vast majority of properties are seeing lower price guides, but high-quality properties are holding their value.
“It really depends on the actual property itself,” Mr Henderson said.
“We’re seeing the top 5 per cent of stock on the marketplace is actually selling better than what it was last year in terms of prices.
“However, the 95 per cent underneath that have come off somewhere between 10-15 per cent.”
Mr Henderson said he recently bought a property in Leichhardt which is one of Sydney’s most premium suburbs.
“It had a $1.5 million price guide and last year it would have sold for $1.7 – $1.8 million last year,” he said.
“This year we deducted 10 per cent from that guide and made an offer and ended up buying it for $1.35 million.”
Buyers are now far more confident and able to negotiate, Mr Henderson said.
“The confidence buyers have now when they go in for negotiation is probably triple what it was last year and the main reason for that is that they know there are no other buyers on a property,” he said.
“If they’re negotiating on something and they make a lowball offer, they have much more confidence that they’ll actually be considered as opposed to not even getting a call back like last year.”
According to Mr Henderson, the properties that are seeing the largest drops are the ones that no one wants.
“Things that are main roads, things that don’t have parking, things that have poor floor plans that are not functional,” he said.
“Also properties that are in need of renovation are also taking big hits because people are scared of construction costs and how long it will take.
“Interestingly, we’re actually seeing that as an opportunity, because if you’re willing to do the work to a property because not many people are willing to do it, you can actually make a handsome profit.
“But it’s properties that have hairs on them, like things that you can’t change, like the location, the aspect of a property and the privacy, they’re the ones that are really struggling.”
Chief executive of Sydney-based buyer’s agency Propertybuyer, Rich Harvey said although the level of distressed sales remained low, the numbers will likely increase by the middle of next year.
“I think there’s about a six to nine-month lag effect on the rate rises flowing through the economy,” Mr Harvey said.
“I think that when people with large mortgages come off their 2 per cent fixed rates to 5 per cent mortgage rate next year, they’re going to feel the strain.”
Mr Henderson said that while many homes are seeing lower prices, there are still properties that continue to see strong demand.
“The premium streets in a suburb, they’ve got a house with a large block of land, they’re in the top pockets of each suburb and have a huge scarcity factor to them,” he said.
“They always sell well regardless of the market, but these are the ones that are still selling better this year than they were last year.
“A lot of buyers who purchased in 2021 and sold in 2022 have taken pretty significant haircuts, but there are examples of properties that have made money and they’re usually the ones that have a huge degree of scarcity.”
