7 tips to help with the difficulty of buying in Sydney
We had a lovely couple come to us recently that had missed out on four properties within the space of 6 months. As I do with all my clients, I asked them to go through their property search so I could diagnose why they hadn’t bought.
Interestingly, none of it came down to missing out because of their budget; they had enough money to buy what they wanted. What it came down to was feeling like they were on the back foot all the way through the process. They had both admitted that when they bought in Tasmania and Melbourne, they didn’t have these kinds of problems.
So what is it about buying in Sydney that makes it so difficult compared to Tasmania, Melbourne, or for that matter anywhere else in Australia? In short, it is the supply and demand theory taking effect *. There is undersupply of properties in every budget within a 10km radius of the CBD, and this is causing prices to rise at a dramatic rate. According to CoreLogic, prices rose 18.2% in the last 12 months in Sydney. This is the largest price hike in over 10 years. Even buyer’s agents like ourselves are finding this current market difficult to buy in, and we do it every day.
We believe that the following reasons are why it’s so hard to buy in Sydney:
- The undersupply and growing demand for quality property
- The way in which properties are opened – twice a week
- Under-quoting that lures buyers to property they ultimately can’t afford
- Having to buy under auction conditions with no experience
- Not understanding the true value of a property
- Not understanding the selling process
- Not trusting the selling agents
So what do you do now? Move to the central coast, another state? Way out west, or become a rent‐vester? If you want to stay in Sydney then please read on.
7 tips for buying in this hectic Sydney market:
- Look at Domain within your price range and instead of entering “buy” enter “sold” so that you can be certain of your of your affordability. This way you don’t have to rely on the agent’s quote price, you can see what prices properties are selling for yourself.
- Next, open yourself up to other areas that could be suitable. Look at the amenities in the area such as village shops, transport links, demographics, price range and proximity to the CBD. Use the automated inspection planner in Domain to highlight what properties you want to see and ask for a day off work midweek.
- If you really love an area and just want to search inside of that area, look at potential properties to add another bedroom to, or at properties without parking.
- Go to as many auctions that you are not bidding at as you can. This way you can watch how the auctioneer is with the crowd. Look at how many people are registering, what price the property is being sold at and any other clues that can help build your auction confidence.
- When it comes down to the negotiations, do not just offer a price at the open. Make sure that you at firstly ask for the contract, and get all due diligence done on the property BEFORE you discuss price. Go back to Domain and look at sold properties in the last 12 months then remember that prices have risen 18.2%. Look at your budget again and the time spent so far and work out the best price moving forward. Also ask for the comparable sale properties that the agent has used to determine their quoting price.
- Have a walk away price whether you are going into an auction or a negotiation. Then walk away and don’t look back as this could affect your decision‐making process.
- Recognise if you are time poor and you don’t have time to carry out these tips, you do need a buyer’s agent. I have met plenty of people that have come to me after looking for a year on their own and they have spent many wasted weekends looking for property as well as the $$$ missed on capital growth.
In microeconomics, supply and demand is an economic model of price determination in a market. It postulates that in a competitive market, the unit price for a particular good, or other traded item such as labor or liquid financial assets, will vary until it settles at a point where the quantity demanded (at the current price) will equal the quantity supplied (at the current price), resulting in an economic equilibrium for price and quantity transacted.
If you are looking for assistance in your next purchase please call Brooke on 0425 221 226.