Updated: Dec 2, 2020
It might be surprising to some people that there is more stock on the market in Sydney now than there was at the same time last year. According to SQM Research, there were about 34,000 properties for sale in Sydney in October this year versus just under 30,000 at the same time last year. However, when it comes to A-Grade owner occupier properties, stock remains extremely tight, with far more demand than supply. That is one of the reasons why I regularly hear of potential buyers struggling to find a property to become their home. However, sometimes there are other reasons why they can’t find their new home that have nothing to do with supply at all. Here are eight reasons why some people can’t find a new Sydney home at present.
1. Looking for bargains
The Sydney market was strong pre-pandemic, with prices firming. Even during the lockdown, the reduction in properties for sale helped to underpin prices. Now, with case numbers under control, demand for property has rebounded and, with it, so have prices. Of course, this means that bargains are difficult to find – if they exist at all.
2. No formal search brief Some buyers don’t actually know the type of property they’re looking for. They wax and wane between a house or a unit and sometimes even the number of bedrooms and bathrooms. Sometimes buyers even jump around from one part of Sydney to another. This scatter-gun approach makes it difficult for them to not only find a property, but also makes it near impossible to compare like with like. A much better strategy is having a thorough brief that outlines the must-haves and the nice-to-haves to help narrow down the options, but also to create the opportunity to compare similar properties.
3. Unrealistic price expectations As well as searching for bargains that don’t exist, some buyers are trying to buy into areas that they simply can’t afford. They may think that prices are lower than what they truly are, or they’re forever looking for a hidden gem that no one else knows about. We all have suburbs that we desire to live in, but sometimes it’s best to consider sister locations that offer the same amenity for a lower price.
Another option is to buy strategically in locations primed for capital growth that will allow you to leapfrog into your suburb of choice sooner.
4. Not understanding auction price guides
In Sydney, it’s common for auction price guides to start at the lower end of the potential market price for a property. There is a 10 per cent price range with the lower number being the one marketed to potential buyers. The reality is that in robust market conditions, properties often sell under the hammer for five to 10 per cent above the top of the price guide. Some buyers are relying too much on these guides as a measure of property prices in a suburb, when they are often selling well above the upper end of the range.
For example, a property with a price guide of $700,000 could sell for $800,000 or more at auction.
5. Not enough time on the ground
Property portals have made it easy for everyone to see what is on the market. But too many people spend most of their time searching through listings online without ever inspecting any in real life. Plus, they over-think the property photos, which usually make a property look better than what it is or, sometimes, make it look worse, which is why on the ground research is so important. Portals should be used to weed out properties that don’t have your must-haves to select the ones worthy of further investigation.
6. You are not top of mind with selling agents
As well as understanding the market better by physically inspecting properties, you will also meet selling agents. These connections are always useful, whether you end up buying their current listing or not, because selling agents will learn that you are a serious buyer. By speaking with selling agents in the areas that you are interested in buying, they are more likely to let you know when they have new listings coming up or even if there are off-market opportunities. Of course, buyers’ agents have strong networks with agents in the areas they buy for clients, which means we often know about properties before anyone else does.
7. Not making pre-auction offers
Many potential property owners are nervous about buying their first asset – and plenty of people are scared about bidding at auction.
However, to own real estate, you do need to make an offer or bid at auction at some point and especially in Sydney’s desirable suburbs that are always in demand from owner occupiers. Indeed, making a pre-auction offer can not only show you are a serious buyer, but it could also result in you buying the property before auction day. Sometimes, people wait for an auction, but don’t bid – vainly hoping that it will be passed in. In rising market conditions, that’s a non-strategy, because Sydney properties usually sell under the hammer – and often before.
8. Mindset matters Mindset is vital for anyone who wishes to find property success. In Sydney, it’s doubly so because it is one of the most competitive property markets in the world. Indeed, it’s more like a combat sport than a spectator one! So, if you are serious about owning a piece of Sydney real estate, you’ve got to be committed and ready to buy. There are always opportunities for people to buy a home in Sydney, but it can’t happen unless you have the mindset, and the will, to make it come true.
Grant Foley is a Property Investor, Qualified Property Investment Advisor® & Licenced Buyers Agent. Enquiries: firstname.lastname@example.org
© Grant Foley Property 2020
The content of this article is of a general nature. Investors should seek their own independent legal & financial advice