- Property values in Sydney declined by 2.3% in August, representing a 7.4% fall from the January peak
- Buyer agent Ben Plohl said lower prices are bringing more buyers to the table, though seeking quality is now a main priority
- Further declines are expected, though prices are set to settle well above pre-pandemic levels
A national buyers agent has advised that softened prices across Sydney have prompted buyers to be more careful in their property selection.
According to the August Corelogic Home Value Index, Sydney recorded the largest monthly decline of the capital cities with a 2.3% fall.
BFP Property Buyers Founder and Principal Ben Plohl said enquiries from buyers have increased over the past few weeks.
This change signals the entry, or re-entry, of buyers into the Sydney market after many chose to watch from afar during price hikes earlier in the year.
“The index reports that Sydney dwelling values are now 2.5% below their level this time last year, but they still remain well above their pre-pandemic levels.”
Ben Plohl, BFP Property Buyers
Mr Plohl noted that Corelogic’s index also reflected a 7.4% decline in housing values since the Sydney market peaked in January this year.
“Many savvy buyers have been waiting for this period to arrive as they understood that there were some crazy prices being paid for Sydney property towards the tail-end of last year and decided to sit it out instead.”
Softening prices prompt buyer enquiries to rise
According to Mr Plohl, the rise in enquiries was predominantly driven by buyers who have significant equity in their current homes, and seek to upgrade or purchase an investment property.
“Even though there has been a rapid rise in interest rates, most of these buyers don’t
have large portfolios, so they are well-placed to secure finance for their next home or
their first investment property under the current lending environment.”
While listings have risen, Mr Plohl believes much of the stock is below investment grade and said this means buyers have been willing to pay sound prices for the best opportunities.
“That said, there is no question that buying conditions this year are far more favourable than last year – simply because they are not as many active buyers to compete against and everyone is a little more sane in my opinion.”
Ben Plohl, BFP Property Buyers
He added that while prices may decline further in Sydney, he expects the price trough to land well above pre-pandemic prices.
“Sydney had such strong market conditions throughout half of the 2010s, so no one
was expecting more price growth anytime soon, yet, here we are,” he said.
“As one of the most desirable locations in the world to own real estate, homebuyers
and investors with a medium- to long-term mindset are the in the boxset in Sydney at
present.”
Mr Plohl reminded buyers that while price declines can seem scary, property has a proven history of price growth over the decades and growth is never linear.
