Property markets have slowed down over the course of 2022, but it’s fair to say that not all markets have been similarly impacted. While 95% of suburbs have seen some weakness, there are still the top 5% of properties that are performing incredibly well.
Across the country, values have fallen by around 7% according to CoreLogic and that’s been something that we’ve been able to use to our advantage when buying in Sydney. We’ve noticed that a lot of properties that were selling for well above their already inflated price guides last year have now dropped considerably.
With a lack of competition and more stock on the market, there are now some really good opportunities for buyers to purchase quality properties at a steep discount to the price they would have had to pay 12 months ago.
A great example is a property we purchased last week in Leichhardt. It had a $1.5 million price guide and last year it would have sold for $1.7 – $1.8 million. This year we deducted 10 per cent from that guide and made an offer and ended up buying it for $1.35 million.
Lower competition is also really helping buyers when it comes to the negotiation process. Last year, if you put in a low offer, you’d be lucky to have a sales agent call you back. These days not only are they calling us back, but they are entertaining the offer and, in some cases accepting them.
We’ve found that now is also a great time to purchase properties that need a bit of work because buyers are afraid of having to do any form of renovation. Interestingly, we’re actually seeing that as an opportunity, because if you’re willing to do the work on a property because not many people are prepared to do it, you can actually make a handsome profit.
While there is some weakness in the overall market, there are still plenty of opportunities for savvy buyers. For the most part, the properties that you want to avoid are the ones that have hairs on them.
These are properties that have things that you can’t change, like the location, the aspect of a property and the privacy. They’re the ones that are really struggling. If a buyer has a choice between two properties and one has a few issues that can’t be fixed, you can be sure which one the buyer will go with. Unless of course, the seller is prepared to take a big hit on the price. That’s not the type of property I want to be buying, because even if I pay bottom dollar today, I’m probably only going to get bottom when I go and try to sell it in 10 years’ time.
On the other hand, there are still properties in the current market that are seeing really strong gains in value. The common theme with the good properties is that they are the complete opposite of the ones that are performing poorly.
Notably, the best properties at the moment all have a huge degree of scarcity about them.
This is often a property on a premium street in a suburb, with a house and a large block of land. They’re also in the top pockets of each suburb where people want to live and aspire to move to.
These are unique properties that buyers want, and they perform well in all markets regardless of overall conditions. The types of properties that have this scarcity factor won’t sell at a discount price for that reason. But as you can see in the current market, these properties hold their value incredibly well and aren’t subject to the same ups and downs you get with just an average property.
If you aim to buy into that top 5% of properties, you can be sure that you’ve just purchased a blue chip asset that you can comfortably hold onto for a long time through all market conditions.
If you are interested in the above, feel free to reach out to a Henderson buyers agent today for more information.