Today’s real estate industry is moving into an interesting period as from all indications it would appear that Sydney, one of the lighthouse markets of Australian real estate, is now transitioning into a softer market. Clearance rates are on the decline while stock levels are increasing week in and week out. The spring push is well underway with a bushel of property on the market since the October long weekend. As we transition from a seller to a buyer’s market, the disparity between price expectations of buyers and sale expectations of owners is sure to become a hot topic.
For many sellers emotion plays a big part in the pricing process and they will often enter a sales campaign with an “our house is better” mentality. There is no doubt that a home will have created many great memories and experiences for the owner, and while most prospective buyers will want to hear about the previous owner’s relationship with the property, the owner’s emotional attachments to the property will hold no monetary value for the buyer. This pricing conversation can often be a tough one for owners to have with their agents in a rapidly changing market, but it’s a reality that they will need to accept sooner rather than later.
Sydney, one of the lighthouse markets of Australian real estate, is now transitioning into a softer market
On the flip side market conditions are now becoming more appealing for prospective buyers, with the floor size, location and/or orientation all forming part of the key decision making criteria for their dream home. These factors can often influence the price difference between two very similar properties on the same street, however those buyers who had been sitting on the fence or were underbidders in previous attempts to enter the market may now be rewarded with well valued opportunities in the changing market.
At the end of the day price will come down to whatever the buyer is prepared to pay, so it will be very important for owners to be realistic with the price expectations before marketing their properties. Many agents and financial institutions will start by valuing a property using historical data from recent sales of comparable properties of a similar size that are in a close geographic area. Buyers will then add an additional layer to their pricing process by including other homes that are currently being offered for sale and their personal buying criteria. The most educated owners, agents and buyers will have assessed many of these fundamental pricing levers and will enter the market knowing that the market itself will ultimately set the final price.