Tight Stock, Big Dollars
It is no secret that Sydney’s residential property market continues to race ahead. Stock levels are at record lows so we are seeing buyers (and some buyer’s agents) are sometimes paying whatever it takes to secure a property in this hysteria. We have just had the chance to compare almost identical apartments that have sold six months apart in this market to see how the market is tracking.
Recently I was told of a two bedroom apartment that had been purchased in Neutral Bay for $1M. Sure, the price is a little high though the unit has a lot of positives (renovated four years earlier, quiet location, lock-up garage on title, coupled with its accessibility into the city for prospective tenants). My surprise comes from the fact that I bought an identical apartment for a client in the building next door six months ago for $890,000. And in a fortuitous turn of events, an unrenovated two bedroom apartment across the road also sold on that same day for $875,000 (almost identical size internally, quiet location, lock-up garage on title, just with an original kitchen and bathroom). So why did our unit in question sell for $1,000,000?
It is no secret that Sydney’s market continues to push forward. Residex suggests that the Neutral Bay units market has seen 9% growth in values over the 12 months to February 2017. Though a jump of $890,000 to $1M represents a 12.4% jump in six months, which is hard to justify. It is sale prices like there where logic and reason are not welcome. Newspapers sell because it is the data and statistics that gets excited. When Sydney’s median house price booms at over 20% per annum we stand up and listen. It is the same statistics that is the basis of our comparison. In the heat of an auction, or as is more the case at the moment when buyers buy in true desperation after months and months of disappointment. The big figures we are seeing be achieved in these scenarios can truly be illogical.
Sydney’s residential market has to slow down sometime soon. While we have very low rates of properties for sale we can only expect to see more and more a illogical purchases being achieved. Be patient with your purchase and enlist the services of a professional if you want a prompt and well-priced result. Just do your research to make sure that your buyer’s agent’s previously purchased properties confirm that they do achieve the best possible price for their buyers.