Sydney buyers sniff opportunity as interest rates rise

The Espinozas’ selling agent, Bianca Field of Ray White Surry Hills, said many buyers have already cut their budgets in anticipation of rate hikes.

Even tree changers like Emma Hawthorne, who hopes to move from Helensburgh near Wollongong in Tasmania, are finding themselves cautious but hoping they can buy in a less frenetic market.

“While there may be a fear of overpaying, I don’t think FOMO [fear of missing out] will dissipate immediately.

Besa Deda, Chief Economist of Westpac Business Bank

“If anything, it gave us more confidence to accept a lower offer than we would have a few weeks ago, because we have to take that into account. [rate rise] in, Hawthorne said.

“But I don’t know how it will be answered to [by vendors]. It could be a silver lining rather than feeling hopeless and throwing away our last two cents.

Hawthorne mortgage broker Bernadette Christie-David, director of Atelier Wealth, said buyers were reviewing their buying power, but also saw it as an opportunity to enter after the boom.

Sydney’s property market has already started to slow, with the city recording its weakest sales results in the first three months of 2022 since the early stages of the pandemic, according to data from Domain.

In April, the city also recorded a clearance rate of 62.9 percent, down 12.5 percentage points from the same month last year.

More than a third of homes sold ahead of the auction in April, another indicator of reduced competition. More than one in five homes have been removed. And despite the highest number of auction listings in April since domain registrations began, this weekend only 559 homes are expected to go under the hammer, down 41.9% from one year to the next.

“Nationally, this is the quietest weekend since early February, excluding weekends when a public holiday occurred,” said the head of research and Domain Economics, Dr. Nicola Powell.

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“Volumes are expected to pick up next week, which will continue to test sellers’ price expectations and buyers’ depth, especially with the recent rise in interest rates.”

Business Bank of Westpac chief economist Besa Deda said the rate hike would hit parts of Sydney unevenly as tightly controlled areas with very few homes to choose from continue to perform well.

“While there may be a fear of overpaying, I don’t think FOMO [fear of missing out] will dissipate immediately,” Deda said.

“There are more rate hikes in the works. This will contribute to a slowdown in prices and buyers will be aware of this. »

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