Sydney house prices slide another 0.7 per cent and sales strategies shift

Best Asia real estate blog editor's comments : 

Is this the beginning of a long-term bear market for Australian real estate that I've been predicting?

 Perth prices are already down 10% to 20 %.

Now  Sydney is beginning to fall. Although there could still be a few positive months , I believe this is very near the end. 

Those of you that have Sydney property should get out as soon as possible.

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Barron Rothschild said "buy when the blood is running the streets", not after it's going up for years and years.

Bob Schubert at his home in Fairlight in Sydney's northern beaches. AFR

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Bob Schubert auctioned his family home in the popular waterfront suburb of Fairlight near Manly in Sydney last weekend so he and his wife Jan could downsize - but it didn't sell.

While it was in a bluechip suburb, the four-bedroom home with an alfresco courtyard at 249 Sydney Road was on the main road and in a cooling market, unlike the booming days of the last five years when every property "sold itself", interest for homes without the "x-factor" were not as buoyant. Mr Schubert relisted the property as a private sale.

The market has turned, but slowly, particularly in Sydney, which experienced another fall in prices of 0.7 per cent for November, according to the latest update from CoreLogic.

In the three months to November, Sydney house prices posted a 1.3 per cent fall, a reversal from the boom conditions that prevailed during the past five years as investors and buyers continue to withdraw on the back of curtailed bank lending.
Going private or selling on a longer auction campaign gets results like 49 Wellington Street, Bondi Beach. supplied.

Last week 20 per cent of auctions were withdrawn in Sydney, double the number in the same week last year, Domain's APM said. That was not the case in Melbourne which had consistent 3 per cent withdrawal rate year on year.

Auctions, which were more popular when the market was hot, were no longer packed, resulting in a shift in selling strategies to the more traditional private sale. There was less pressure to sell within a traditional four-week auction campaign especially where there were fewer buyers or buyers who were slow to close a sale.

"When the market begins to flatten some of the properties with small anomalies like being overlooked by unit blocks, main road or busy areas may take a little longer to sell than previously," Mr Schubert's agent LJ Hooker's Andrew Reynhout said.

"Price variations, in my opinion, are in line with the overall market they are in and given the Manly and Fairlight market still retains some strength, I don't believe a sacrifice of price is required to sell but may be an adjustment down from expectations of the rapid rise in prices we have become used to."

Since taking it private, Mr Schubert has received 2 offers for his house.
View on top of the sold 9/13 Wood Street Manly. Supplied

Giving buyers time to come to the market has proved effective for Stone's Reece Coleman, who extended the auction campaign on a prized three bedroom house at 49 Wellington Street on Bondi Beach. Mr Reece said the cooling market was not "dead" because there were still plenty of buyers who were taking longer to get finance.

Real estate agency Cunninghams also had to withdraw three apartments in Dee Why, another beach suburb in Sydney. They were all re-listed privately with a 5 per cent asking price reduction.

Reflecting the mixed Sydney conditions, just a few suburbs away, Cunninghams sold a premium apartment with water views at 9/13 Wood Street, Manly for $1.37 million, well above reserve.

Cunninghams' principal John Cunningham was not perturbed and said he expected days on market for homes to double. Even then, it would still be about 40 days, down from a 50 to 60 day average in Sydney.
Going private or selling on a longer auction campaign gets results like 49 Wellington Street, Bondi Beach. supplied


Melbourne was more resilient in November, thanks in part to strong population growth, rising 0.5 per cent in November.

But Perth stole the show. House prices in the western capital rose 0.2 per cent in November indicating a clear "bottoming out", Corelogic head of research Tim Lawless said. In the three months to November, dwelling prices have maintained a positive rise of 0.3 per cent.

"If this is indeed the start of a recovery phase in the Perth housing market, it comes after dwelling values have fallen 10.8 per cent since peaking in mid 2014."

Settled sales were rising and homes were selling faster, Corelogic said. Properties were on the market for 59 days compared with 68 days a year ago.
The Schuberts' lovely four bedroom home in Fairlight, Sydney. Supplied

Advertised stock levels have also fallen about 12.7 per cent compared with last year.

In the year to date, Melbourne house prices have risen just over 10 per cent and Sydney rose 5 per cent. Prices in a resurgent Hobart climbed the most at 11.5 per cent in the year to November.

Read more: http://www.afr.com/real-estate/sydney-house-prices-slide-another-07-per-cent-20171130-gzw8px#ixzz50BPMNQ8Q
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