Room to Move.

Sydney property data, simplified.  

With seven weeks to Christmas, this is the stretch of the year when decisions usually speed up, and October delivered the lift. The supply of new homes did not keep pace. Listings have been thin since June, and sales followed them down about two months later, so this year’s push to the holidays is being made with fewer homes. 

Across October, BresicWhitney sales rose 30% on September. They remained however, 35% below last October, with new listings 39% below annual volumes. Homes that sold took a day longer than last October. The number of buyers met fell 19% on September and sits 32% below the same month last year, even as sales rose.  

Sydney values fell 1.6% in October, according to Cotality, and now sit 10.1% below their February peak. The Reserve Bank lifted the cash rate to 4.85% on 3 November, the fifth increase this year.  

The pattern traces back to June. BresicWhitney’s own data shows new listings ran 23% ahead of last year from January to May, and sales 9% ahead. In June, the month after the May budget, listings fell 42% on June last year while sales were down just 3%. Sales did not fall by a similar margin until August. Sales were 37% below last year in both August and September, and the gap narrowed a little in October. The October lift on September was larger than last year’s 27%. 

The fall varied by market. Since July, new listings were down 30% in Balmain, 38% in the east and 39% in the Inner West, compared with the same months last year. Cotality’s Pain and Gain report for the June quarter puts the median hold for a profitable resale at 14.8 years in Mosman and 11.8 in Woollahra, against 10.8 across Greater Sydney. Owners with a long hold have more flexibility in choosing when to sell. 

The mix of sales shifted too. Half of October’s sales were apartments. With more in the mix, the average sale price eased. 

Most years, the spring rush runs into the first half of December and activity resumes after Australia Day. 

“I expect the break to be shorter this year,” said BresicWhitney CEO, Will Gosse. “A lot of owners held back this spring, and some are already talking to us about the new year. Interest tends to build over the holidays well before it turns into sales, so the homes that are ready early will be first in front of those buyers.” 

Field Notes. 

With fewer homes to choose from, buyers acted on the ones that came up. October’s results came from a smaller pool, and the competition, where there was any, gathered around a handful of homes. 

Good homes that were priced sensitively sold. Weaker homes found it harder, even when priced sensitively. Comparable sales from three to six months ago, and in some cases six weeks ago, were no longer a useful guide to price. 

Mr Gosse said buyers were moving on homes that offered clear value. “Buyers are taking their time, but they will still move when a home gives them a reason. The competition we saw this month was around small houses and larger apartments between $1.5 million and $2.5 million that gave people more than they expected for the price.” 

Fewer homes came to the rental market in October. New managements were 38% below last October and 24% below September, and leases were 7% below both. Across the portfolio, vacancy sits 0.6 points below a year ago and the average rent is 6% higher. Homes took about three days longer to lease than last October, and under a day less than in September. 

Across 425 rental opens, more than 1,500 people came through, or 3.7 per open, down from 4.0 in September. 

“Fewer owners are bringing a home to the rental market this spring, so there is less for tenants to choose from than a year ago,” said Mr Gosse. 

Leasing picks up from late December. “Demand builds from the end of the year as people relocate for work and study,” Mr Gosse said. “The homes that are ready to inspect before then are the ones that lease first.”  

What Comes Next. 

The Reserve Bank meets next on 8 December. Until then, buyers know where rates sit, and those who have been waiting have a clearer basis on which to make an offer. What comes to market before then will set the tone for January.