The Sydney property market is being buffeted by falling auction clearance rates and prices growth that has halved to about 3 per cent in the September quarter, according to Domain Group data.
Add the potential for the remaining big banks to jack up interest rates and buyers look to be increasingly reluctant to take the plunge.
But now might actually be a good time to seize a bargain. These properties might take some searching out, but they are definitely there and well worth the trouble, experts say.
Go west, young man (and woman)
A low auction clearance rate in western Sydney of 45.1 per cent last weekend means a lot less competition for homes, says Domain Group senior economist Dr Andrew Wilson.
“That might be because there’s less activity from investors and still low demand from first-home buyers, or that prices have reached the affordability barrier,” he says. “But certainly, the further west you go, the better prices you’ll see.”
It means excellent value is now on offer in the west, believes Doug Driscoll, CEO at Starr Partners. “You can find some tremendous buying, a three-bed detached house in Erskine Park for under $600,000 for instance. There’s a lot of nice suburbs with good schools and transport.”
The south and south west
Lots of buyers from the eastern suburbs are now migrating to the Shire to buy bigger, more affordable homes and enjoy the lifestyle near beaches and inlets, says LJ Hooker Miranda agent Bob Dundas.
“They love the thought of a good brick-veneer, three-bedroom house in a quiet street for $1.1 million,” he says. “Then there’s the sailing and boating too, as well as the schools and the great shopping.”
The south-west also had a low auction clearance rate of 58.1 per cent last weekend, and price growth is becoming markedly weaker. “Houses are very affordable and you get good value for your money,” says Tony Khoury of Elders Bankstown. “A modest three-bed brick home would be $800,000-$900,000 and a newer, big two-bedroom apartment under $600,000.”
Look for something you can add value to
Don’t necessarily avoid the regular blue chip suburbs, advises Rich Harvey, managing director of buyers’ agents Property Buyer. There are some good buys hiding out there too, usually in the form of a home in need of a renovation or even a knock-down and rebuild.
“You want a property you can really add value to,” he says.
“It might be in the eastern suburbs, inner west, on the north shore … anything you can do some work on and improve, without over-capitalising.”
Ian Agnew of Architect Select agrees. “The nirvana is to find an untouched property that has character and has been minimally monstered over the decades. It might be ripping out old carpet but keeping the old pressed bathrooms and bathtubs, or it could be extending a property or adding a level on top.”
Find the overlooked suburbs, or homes
There are plenty of suburbs all across Sydney that most people, outside those areas, simply don’t know about.
“They tend to go under the radar,” says Dr Wilson. “There’s a lot of those in the Shire, like Bonnet Bay, and out west that only people nearby know about.”
Lack of local knowledge can also lead to bargains in other ways. “I love working with out-of-area agents who don’t know true values,” says Harvey. “You can pick up some very good-value buys through them too.”
Follow the money in new infrastructure
Check out areas which are due to have new rail or tram lines, new roads, new hospitals, new or improved shopping centres … even a new airport.
“With the train line coming to the north west, prices will definitely go up in the future, so now’s a good time to buy there,” says Phil Kelly of Ray White Castle Hill. “You can pick up a four-bedroom family home in Baulkham Hills for just over $1 million, which is very good value.”
Domain’s top suburb picks for bargain buys
Where – Parramatta, Blacktown, St Marys, Mt Druitt
Why – Auction clearance rates are down, and prices are much more reasonable than other areas of Sydney
Where – Bankstown, Padstow, Campsie
Why – There are lots of areas just outside the inner west, and many of them have plenty of good public transport options
Where – Campbelltown, Oran Park, Macquarie Fields
Why – These are among the most affordable areas in Sydney, and there’s the prospect of a lot more infrastructure coming, with the second airport particularly
Where – Bexley, Bonnet Bay, Hurstville, Kogarah
Why – There’s been plenty of recent price growth in the Shire especially, but it’s much closer to the centre of Sydney than most people think and it has lots of lifestyle assets
Online Source : Dr Andrew Wilson, Domain Group