The median price of a home has already dropped 2.1 per cent since the start of 2018 but new projections from property analysts SQM Research revealed more falls could be on the way.
The property research firm forecast the median would fall by up to 4 per cent by the end of the year, a revision of earlier predictions of flat growth for the year. SQM director Louis Christopher said his company, which has historically had the best track record for predicting market movements made the revisions due to weak investor activity.
Investors were primarily responsible for driving up prices during the boom from 2013-2016 but have now been struggling to get loans since last year, helping ease the prices down.
Housing experts had earlier thought that prices would start going up again once banks begin lending to investors once more but this prospect is now unlikely.Investors appear to be looking for other opportunities and are not as interested in the Sydney market any more.
With investors largely absent from sales and the number of Sydney properties available for sale up 34 per cent from last year, buyers are in a strong position to negotiate prices down.
Vendors are starting to capitulate, before they were sticking to their guns with prices but they are now becoming more negotiable.
The last time prices were that overvalued was in 2003, which precipitated a nearly 10-year stagnation in prices.
We can probably expect a similar scenario this time around. Prices may fall a little before stabilising for years.
It is a very good time to be a buyer, there is more choice and there isn’t as much pressure from other buyers. Last year you could have got about 15 to 20 couples going through an open home. Now you’re lucky if there is even five.
Sellers are still in a reasonably strong position, despite the weaker market, due to the strong price gains over recent years.
The best homes still get the best prices. Buyers will still pay high prices for well located properties with all the features they want.
It is not as easy for the lower quality listings and these sellers have to price their properties well if they want to sell.
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