Analysis: Turning Point in Sydney Housing As Seller’s Mkt Becoming Buyer’s
- Published on
- 21 Mar 2020, 11:28 AM
By Sophia Rodrigues
Housing markets go through cycles where at any time either the buyer or the seller dominates.
This weekend, however, looks like an interesting time in the Sydney housing market where there is both a rush from buyers to buy and from sellers to sell. But that will soon change.
SELLERS MARKET NOW
Currently the Sydney market is a seller’s market because the strong price gains in recent months and low interest rates have seen a rush from buyers.
The coronavirus pandemic and its impact on the economy is bringing about a reality check but some buyers might still go ahead with their buying plan. This is because they are either emotionally invested in their buying decision or don’t expect the economic downturn to affect housing prices.
The remaining buyers are likely to pause as housing prices are expected to come under pressure in the next few months, and they will hold their purchase to buy at a lower price later.
Importantly, there will be many existing and potential buyers among those facing job losses and an uncertain future, who will no longer either qualify for mortgage or don’t want to risk taking a mortgage.
This means the seller’s market will soon become buyer’s market.
SEELER’S RUSH HAS BEGUN
In anticipation of this, sellers are already entering the market hoping to capitalize on the current buying demand, and before the buyers change their mind. My own observation is that the number of listings have risen sharply in the last few days.
Some of these may be speculative sellers, taking advantage of the property market cycle while others would be those who no longer have the capacity to hold on to a property.
The record low mortgage rate is offering the best opportunity to buy the first home, or upgrade or to invest. But uncertainty over the economic impact of the virus, including on housing prices, means buyers will move to the sidelines.
How deeply this would impact housing prices is anyone’s guess.