The Sydney property market is changing as more supply hits the market and the volume of listings increases, says a mortgage broker based in the CBD.
“Property prices have started to drop which can be attributed to the increase in supply,” Andrew Hadjidemetri (pictured) said. “This change in the market has created more opportunities for buyers.”
Hadjidemetri, the director of Australian Financial & Mortgage Solutions, said contributing to this drop is the fact that the number of properties being passed in at auction was significantly higher in the last few months compared to 12 months ago.
“All these changes are creating a buyers’ market,” he said.
Hadjidemetri said some buyers were sitting on the fence waiting for the outcome of the federal election. However, many of his existing clients were active local property investors who were in it for the long term and still exploring current opportunities in this market.
The Sydney broker said first home buyers who purchased in the last two years and had locked in an interest rate below 2% were now concerned, as interest rates had risen and their rate would increase upon the fixed rate expiry period.
“With these first home buyers being concerned about their increased interest rate, it’s about educating your client on the change in market conditions,” he said. “It’s also good to know banks add buffers of over 3% to the current interest rate, so from a serviceability perspective borrowers shouldn’t have any repayment issues.”
Hadjidemetri said people expected rates to increase this year as banks had hinted at a hike and markets such as New Zealand have moved its official cash rate by 0.5% in mid-April.
“With pending rate rises, supply continuing to increase, more properties will hit the market compared to 12 to 18 months ago,” he said.
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Hadjidemetri said property price growth could drop this year which shouldn’t be demotivating to people who purchased during the pandemic.
“What the market experienced during COVID-19 isn’t typical as the market increased more than 20% in 2021,” he said.
“Prices dropping 10% to 15% isn’t worrying as we cannot afford an exponential increase every year.”
Hadjidemetri understood the benefits of owning property and told his clients, especially investors, that investing in Australian real estate was a great way to experience growth.
“If you purchase property to sell in the short term you might not make a profit after you consider marketing, agent, and stamp duty costs,” he said. “However, if you purchase, take advantage of tax benefits, and hold long term it’s unlikely you’ll lose.”
