When it comes to property generally, there are a lot of things people assume are true that simply are not.
The eastern suburbs real estate market is no exception. In this article, we look at 7 of the common myths we hear and reveal the truth about each of them.
Myth 1: Real estate in the eastern suburbs is all unaffordable
It’s true that Sydney’s eastern suburbs boasts Australia’s most expensive real estate. In fact, the average property price in seven suburbs is now more than $3.8m. But that doesn’t mean all property in the East is expensive.
Don’t discount small properties in inner east locations. For instance, Potts Point has a median unit sale price of $632,500, according to CoreLogic. That’s more than $200,000 under the Sydney average. While the standard apartment may be smaller here than in most parts of Sydney, with one-bedders being standard, the area is both cosmopolitan and convenient. That means it makes a wonderful place for first-home buyers to get onto the ladder, or for downsizers who want a crash pad.
Myth 2: The eastern suburbs property market is slow right now
While Sydney property prices may have stagnated towards the end of 2017, the slowdown affected different areas and different types of properties in different ways. Being an established area close to the city, the eastern suburbs has, to some extent, been shielded from the impact of a slowing market with auction clearance rates staying above 70% by November 2017, even when they fell to below 60% across the city as a whole.
In fact, far from slowing down, some parts of the eastern suburbs market continued to gather pace over 2017, especially the market in properties over $4 million. This was partly due to an under-supply of housing in this price range. It was also partly due to the fact that different factors drive the top end of Sydney’s real estate market compared to the rest of the market.
Myth 3: It’s a bad time to sell in Sydney’s east
Largely because of the perceived slowdown, a lot of people will tell you that now is a bad time to put your property on the market. That’s not necessarily true. While the hysteria that gripped Sydney’s property market in early 2017 began to fade from many segments by the end of the year, there is still a reasonable amount of competition for quality property. It is simply that buyers may take their time making an offer and you may be forced to negotiate the highest price with one potential buyer rather than several. But, with the right agent, you can still get a good price for your property.
Myth 4: It’s a bad time to buy in Sydney’s east
On the flip-side, many people are saying now is a bad time to buy, especially with so much uncertainty about rising interest rates and a potential property bubble. However, property – like any investment – will be subject to short-term price fluctuations. What’s more important is that its value rises in the long-term. And, historically, quality Sydney property has done just that. More importantly, when you buy in Sydney’s eastern suburbs, you’re buying into an area that is close to transport, close to amenities and always in-demand, factors that should tend to ensure prices stay more stable than elsewhere.
Myth 5: Every property goes to auction
Perhaps because of media reporting on “hot auctions” and its emphasis on auction clearance rates, many people assume that, in a relatively affluent area like Sydney’s east, every property goes to auction. That’s not the case at all. Increasingly, vendors are choosing to sell property “off market”, relying on their agent to bring people through the door without necessarily telling the public as a whole.
This trend has become so popular that, of the more than $255m in real estate we sold in 2017, almost $128m came from off market sales. We expect this percentage to grow over the next few years. That’s great news for sellers looking to avoid the stress and inconvenience of a full marketing campaign, just as it is for buyers who feel intimidated by the auction process.
Myth 6: You can’t add value to your property
Perhaps because the entry point into many parts of the eastern suburbs is higher than other parts of the country, some people feel that extending their home or undergoing extensive renovation work would mean over-capitalising. That shouldn’t be the case, so long as you do it right.
That means, if you plan to sell within five years of renovating, you should always think about any prospective buyer. You should also prioritise good design and make sure that you execute it well. If you do, chances are you could be adding an enormous amount of value to your home, as some of the best renovations we saw in 2017 proved.
Myth 7: Property in Sydney’s eastern suburbs sells itself
Finally, there’s a school of thought that says an agent doesn’t really make a difference to the sale price you’ll achieve and that in an in-demand area like Sydney’s eastern suburbs, good property will sell itself.
Naturally, the better a property is, the easier it generally is to sell. But that won’t necessarily get you the best price.
Property is and always will be a relationships game. It’s also an emotional process and a decent agent will know how to connect with buyers intuitively as well as rationally. A good agent will do this for you and help you extract the maximum value from your property, no matter how desirable it already is.
You just need to make sure you find someone you can trust.
Sydney’s Eastern Suburbs Market Snapshot
A detailed annual assessment of the property market focusing on the Eastern Suburbs of Sydney, Australia.