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Why fear of missing out in the property market should ease this year
Aspiring Sydney property buyers are set to have more choice this year as sellers try to take advantage of favourable conditions, resulting in an expected glut of listings.
At the end of last year, Sydney recorded the highest number of new homes on the market since 2015, CoreLogic data shows.
There should be less buyer FOMO as price growth is expected to temper amid a listings increase, agents say.Credit: Peter Rae
That trend has carried into the new year, with the city recording a 10.5 per cent increase in new listings in the four weeks to January 23, despite it being a traditionally quiet period for real estate.
Almost every pocket of Sydney has seen more new listings added to the market compared with this time last year. Ryde led the way, with a 46 per cent increase; followed by the northern beaches (45.6 per cent); and then Blacktown (34 per cent).
The south-west saw the biggest decline, dropping 15.3 per cent, followed by the Sutherland Shire (-8.8 per cent) and the inner south-west (-6.7 per cent).
Source: CoreLogic
Across Sydney, the increase in new listings compared to this time last year is roughly the same for houses (10.5 per cent) as it is for units (10 per cent).
BresicWhitney’s head of sales Thomas McGlynn, who specialises within a 10-kilometre radius of the Sydney CBD, said while the big family homes in the $4 million-plus category will still be hard to come by, buyers will have a lot more choice in the sub-$3 million category in most areas of inner-city Sydney.
“That comes down to a lot of property that did not sell [late last year],” Mr McGlynn said. “Most of them came off the market and were re-launched mid-January.”
Sellers will also come back to the table with more realistic expectations this year, after adjusting to the new normal of more listings and slower price growth, which will benefit sellers and buyers, he added.
Buyers are expected to have a lot more to choose from than last year as seller’s take advantage of favourable conditions.Credit: Peter Rae
“A large driver of why sellers set high expectations is because it’s difficult for them to buy what they want to buy ... The greater number of listings will go a long way in sellers being a lot more realistic.”
Greater choice will also soften buyer’s fear of missing out, as they think twice before paying top dollar on properties, according to Cooley Auctions auctioneer Michael Garofolo, who focuses on selling in the city’s north-west and south-west.
“I feel that prices won’t increase at the rate of knots like they did in 2021. Buyers won’t have that fear that if they don’t buy in February, they’ll be priced out in June,” he said.
Mr Garofolo noted there would be more houses added to the market in areas including Riverstone, Schofields and The Gables, due to newly completed builds and land releases as well as more units and tightly held family blocks along the corridors of the M7, Parramatta and Victoria Road.
In the Hills District, first-home buyers might also get some reprieve, with hundreds of units hitting the market after years of planning and construction around new metro stations.
“There is going to be an unlocking of sub-million properties in the Hills District, which is highly sought after and seldom found,” said Stu Benson of Benson Auctions.
He said house buyers will also have a “fair bit of choice” between now and the start of March, with hundreds of homes scheduled for auction.
“It’s going to be a litmus test. We need a couple of weeks of results under our belt until we gauge what the 2022 market is going to look like.”
CoreLogic’s head of research Tim Lawless said vendors will be taking advantage of lower supply levels overall, as while the number of new listings is up by 10 per cent compared to this time last year, the number of total listings was down by 3.1 per cent.
“Chances are, later in the year, that will start to gradually lose its appeal as stock levels rise and demand diminishes due to affordability and rising interest rates,” he said.