At the end of October 2018, Sydney dwelling values* were down by 7.4% compared to 12 months ago. In a market with falling prices, the incentive is for buyers to postpone purchasing because the longer they wait, the lower the price.
In the three months August to October 2018, the volume of property transfers in NSW was down by almost 10% compared to the equivalent period of the previous year. Indicators are that the volume of sales activity continues downward. Recent auction clearance rates are between one quarter and one-third lower than 12 months ago.
Such indicators point to a possible downturn in the conveyancing market of around 25% from a year ago. That represents a significant reduction in work for conveyancers. Will it get that bad and will it get even worse?
Sydney property owners are pulling back from selling in the current market. The number of property (for sale) listings in Sydney is 18.6% higher than 12 months ago. There are ‘too many’ properties on the market. Vendors have responded by holding back from selling. The number of new listings in October 2018 in the Sydney market was down by 12.3% compared to 12 months ago.
Reduced supply of properties will help to stabilise prices and get buyers moving again. In the current environment of static interest rates, ‘lethargic’ lenders and buyers waiting for prices to hit absolute zero, what happens next may be in the hands of vendors.
*statistics from CoreLogic. Image from CoreLogic