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‘As a buyer, now is a great time’: Housing experts weigh in on property prices

By Sue Wiliams
27.Jan.2023

 

Weaker prices, more modest interest rate rises on the horizon and a flurry of homes coming up for sale have dramatically turned Sydney into a buyers’ market for the first time in three years.

And while housing experts might be divided on many topics, they’re united on this: now is the time to buy before the cash rate stops being hiked up and prices start to recover.

“As a buyer, now is a great time to get in there,” says Lloyd Edge, author of the real estate book Positively Geared. “We’re now seeing it as a buyers’ market with prices down and the Reserve Bank of Australia [RBA] being a bit more conservative about interest rates.

“Some buyers are still a bit nervous, but others are having a go. It’s a good time for home buyers, especially if they’re in rented property with rents rising, and rents more expensive now than mortgages, and for investors who are after cash flow because of those high rents and low vacancy rates.”

With Sydney home values experiencing a peak-to-trough fall of 13 per cent, on CoreLogic figures, the bottom of the market might not be far off, believes Nerida Conisbee, chief economist at Ray White, making this the best time to look for good properties to buy.

“Prices are now down but may not come down much more,” she says. “The market is moving slowly, so there’s more time to make decisions without that fear of missing out, and the bottom of the market could be quite soon. As soon as the RBA stops increasing interest rates, prices may start to rise again.

“Sellers now really want renovated places, too, which are hard to find. While unrenovated homes can be picked up for a good price, construction costs are still high, so you’d have to hold onto them longer, which mightn’t be ideal. So, renovated homes are in the highest demand.”

Bridesmaid suburbs are also increasingly stealing the limelight too, giving buyers a bigger bang for their buck and more room to move within their budgets since most are facing tighter finance conditions. Edge advises potential purchasers to look at areas that are cheaper than their neighbours, which offer amenity and are gentrifying.
 

“So, instead of looking at Bronte or Bondi or Maroubra, somewhere like Botany or Brighton-le-Sands can offer good value,” he says. “They’re good bridesmaid suburbs that will take off because of their infrastructure and amenities and comparative affordability.”

On Domain’s latest House Price Report last year, Botany had a median house price of $1.7 million, rising 8.9 per cent over the previous 12 months, compared to Bronte’s $5.7 million after a 6.5 per cent rise, Bondi’s $3.96 million (with not enough sales for a reliable calculation of the percentage increase), North Bondi’s $4.375 million up 6.6 per cent, and Maroubra’s $2.75 million, up 13.6 per cent.

One couple currently selling in Botany, say the suburb has changed enormously in the 12 years they’ve owned their house. The suburb is far more residential, with great cafes and restaurants, parks, an Olympic-sized swimming pool and yoga studios.

“It now really is a hidden gem,” says Tania Flack, 55, a naturopath and nutritionist. “I really love Botany as it’s so quiet and you can walk everywhere, yet it’s so close to the airport and just 10 minutes from the nearest beach and 20 minutes from the city. I’m going to really miss it.”

She and husband Steve Williams, 60, a safety consultant, are sea changing to Port Macquarie on the north coast and have put their three-bedroom, newly-renovated house at 111 Banksia Street on the market. McGrath Coogee agent Marnie Seinor takes it to auction on February 11 with a price guide of $2.05 million to $2.25 million. With two living areas and a huge open-plan kitchen-dining space, as well as a deck with a barbecue, and a landscaped private garden in one of the suburb’s quietest streets, it was a hard decision to sell.

“It might not financially be the right time to sell because of the fall in prices and the market, but it’s the right time for us,” says Williams. “We bought a house on the coast 20 months ago and want to have a change of pace, so we’ll have to accept whatever the market dictates.”

Supply is still generally an issue everywhere in Sydney, says First National Real Estate chief executive Ray Ellis, although more listings are now starting to come in.

“But we’re not seeing the mortgage stress sales some people predicted as a result of the rise in interest rates as average savings went up during the pandemic, which has provided a buffer,” he says. But we think, with the expectation that interest rates will go up again but not as dramatically as last year, that now is a good time to buy.”

The difficulty is always not being able to accurately pick either the top, or the bottom, of the market, admits Thomas McGlynn, chief executive of BresicWhitney and the deputy president of the Real Estate Institute of NSW.

“But as soon as interest rates stabilise, the property market will start to gain some momentum again,” he says. “At the moment, however, the uncertainty around interest rates creates better opportunities for buyers. It’s a good time to pick up A-grade property you would have had to pay a lot more for previously, particularly if it doesn’t require a lot of renovation.”

Buyers could also try to negotiate on price if some homes have been a while on the market, recommends Arjun Paliwal, head of research at data-driven buyer’s agency InvestorKit. “And buyers should check comparable sales for the past two to six months to make sure vendor prices have been adjusted downwards in line with the market,” he says.

“We’re not far off the point where interest rates will steady and then buyers should look for the key turn of the market. And that might come quicker than they think.”

CategoriesNews

Does a swimming pool add value to your home in Sydney?

By Tawar Razzaghi
22. Jan. 2023

 

Home buyers have been splashing out: a swimming pool can add hundreds of thousands of dollars in value to a home, agents say.

Pools are in hot demand among young families looking to upgrade their homes since the pandemic hit, but they are not for every buyer type or suited to all properties.

Spending, and spending intentions on swimming pools is up in the past year on Commonwealth Bank figures and “pool” was the number one search term among prospective buyers for the past three years on Domain.com.au.

In general, a swimming pool can add value to a property, especially if young families are interested in the home, said James Sarzano of Stone Real Estate North Ryde.

“The majority of properties with pools have been going for more than ones without, typically,” Sarzano said. “It’s based on buyer preference first and foremost.”

But adding a pool just for the sake of having one was not always guaranteed to add value to a property, he warned. If it eats into precious backyard space then it can be a negative.

Properties that strike the balance right in having a pool with enough green space for kids to run around, and an alfresco area for entertaining, were popular, such as his listing at 5 Napier Crescent, North Ryde, asking $2.4 million.

The seller of the North Ryde property Carolyn Gibb said while the pool needs regular upkeep, it has paid for itself off over the years since they built it and their house two decades ago for their then-growing family.
 

“When they’re [the kids] little they love it, then they go off it and when they’re older, they’re back again, and now we’re at the stage where we’ve got our grandchildren who use it,” Gibb said.

“It ebbs and flows with how it goes … Definitely during COVID we used the pool a lot more again. I think that’s why they’ve come back into fashion.

“It does take up your time to keep it maintained but for me and the family, value wise, it’s been good. [My husband] Doug may say differently because he’s had to maintain it and clean it, but it’s a beautiful aspect of the property.”

Even properties by the beach can sell for less if they are without a pool.

A five-bedroom house with a pool at 54 Austral Street in Malabar sold for $3.275 million just before Christmas.

A nearby five-bedder at 65A Victoria Street without a pool sold for $2.8 million. Although it was on a smaller block than its neighbour, Agents and Co Property Group’s Nick Papas handled the listing and thought it could have achieved $200,000 more if it had a pool.

Papas said properties with pools remain attractive even if they are close to the water.

“The reality is if Victoria Street had a pool it would be hitting the $3 million mark,” Papas said, adding that the property was sold to an older family.

“If you’ve got young families, they want the pool for the family. Packing the kids up to go to the beach can be quite difficult.”

On average, pools added between $100,000 to $200,000 in value from young family buyer types, Papas said, but single-level homes with pools could deter downsizers.

In Baulkham Hills, a four-bedroom house at 26 Gleeson Avenue sold for $1.662 million by David Gennusa of McGrath Castle Hill.

It sold for $52,000 more than a recent comparable sale at 7 Priory Court in the same suburb due to the swimming pool being a point of difference, Gennusa said.

“The owners [at Gleeson Avenue] created an entertaining family oasis. That’s priceless having the pool as part of the backyard,” he said.

“Some buyers do see it as a negative from the maintenance side of things. But then also some people see it as an asset, it’s a point of difference when it comes to selling.”

In Western Sydney, pools are even higher on families’ list of criteria when hunting for a home so far from the beaches.

Blaze Real Estate’s Aldo Ianni sold a five-bedroom house at 25 Braeside Avenue, Smithfield for $1.341 million to a young family willing to stretch their budget.

“They specifically were looking for a property that had a pool for their kids. They wanted to go that extra mile,” Ianni said.

“Their second option was to find a property with the space of adding a pool, but they didn’t want to go through all that effort and all that work. They paid a bit extra for the convenience of it already done.”

Nearby, a property with an extra bedroom at 148 Dublin Street but without a pool sold for $1,035,000.

 

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