The Sutherland Shire is known for having its own microclimate when it comes to fluctuations in Sydney and national property prices. Q1 2023 is no exception. Despite ten interest rate rises and global economic uncertainty, our local property market stands strong this quarter leaving people questioning whether we are on the verge of a downturn, stabilisation, or a bounce-back this year.
Auction clearance rates have bucked the trend across capitals combined, with Sydney’s being the highest since October 2021, outperforming all other capital cities. This is an impressive turnaround off the back of declining property prices throughout 2022 and the pressure of mortgage affordability. Whilst it is a little early to predict if this clearance trend will continue, given clearance rates historically do sit higher earlier in the year, it may be a sign of the market steadying.
Local Sutherland Shire auction clearance rates remain strong at 67.2%. The Shire’s lifestyle, coastal appeal, and accessible rail network providing quick transport into the CBD remain steady attractions for those primarily working from home who may need easy access to the office. Sales have been consistent and auctions competitive, showing the region’s resilience despite the media’s negative portrayal of the property market.
The flow-on impact of the urban sprawl continues from the inner west, where house prices in the CBD and city fringe have increased significantly compared to inner-city units. Likewise, house prices in the Sutherland Shire have exceeded unit growth, tempting unit owners to explore areas further south towards Engadine and Heathcote.
Over Q1, the Pulse sales team met 3,600 potential purchasers, many inspecting from out of the area or considering a return to the area. Furthermore, our team continued to achieve strong sales results for our vendors both on and off the market.
Pulse’s in-house Auctioneer and Agent with 20+ years of experience, Lucas Pratt, believes good properties will always attract competition regardless of market conditions. Potential purchasers will still need to compete for quality properties and step outside their comfort zone as these properties are inherently in short supply and high demand, regardless of the market or circumstance.
For example, the auction of 2 Onslow Place, Sylvania, was recently brought forward after attracting registered potential purchasers from all over the Shire and neighbouring regions, including Sans Souci, Sylvania, Hurstville, Caringbah, Gymea, Connells Point & Kogarah. Such high interest levels resulted in 147 inspections (15 registered for auction) and 13 building and pest inspections purchased, selling for $210,000 over reserve.
Another property attracting significant interest with 93 enquiries, 76 inspections and 8 registered bidders was 11 Calliope Road, Miranda which sold at auction for $170,000 above the reserve to an out-of-area buyer from Maroubra.
Lucas reflects that buyer behaviour has traditionally been to enter at the top of the market, resulting in potential purchasers battling for stock over market value in overheated markets with people less reluctant to purchase in more affordable markets – often holding out for the market to bottom out. This apprehension can understandably prevent potential purchasers from making more robust buying and investment decisions and can lead to them losing out once the market bounces back.
Potential purchasers should be mindful that you only know when the market is at its lowest once that time has passed. Buyers who overcome that fear will likely be rewarded with the best time to enter the market to receive the most beneficial long-term gains.
Wealth creation through real estate will almost always come to fruition in time, but mindsets must adapt to the current conditions. Fortunately, with the current interest rate cycle and the market sentiment, discounts are already accounted for, so it is a good time to buy.
And let us not forget property investors and tenants. Our Head of Property Management, Fyonn Wolf, rightly highlights that rental values are increasing substantially alongside rising interest rates. We have seen weekly rents increase on average by $50 per week.
“It is an encouraging trend for investors right now, however, with that comes the polarity that it is getting tougher for renters. Our days on the market are very low at 4.4 days, and with 70% of our rentals leasing at the first open for inspection, our properties are moving fast. My best advice to tenants is to have your applications and deposits ready because you will likely be up against an average of 6 to 10 people competing for each rental property.”
For more insight into the value of your home or to find out if your property is achieving maximum rental returns go to www.pulseproperty.com.au and download your obligation free property valuation report. Alternatively, connect with our team to discuss your situation whether you are considering selling, buying or investing in the Sutherland Shire.
* Information provided is not financial advice.