What is going on in the Sydney market?
In short it’s no longer crazy but it’s still moving along nicely. Patchy seems to be the word du jour and I’d have to agree. This weekend’s auction results paint a bit of a picture. There are great deals to be had, like the unit I bought for my client, yet other properties are smashing reserves and expectations.
This is how my weekend's auction result went.
17/54 Penkivil Street, Bondi came on the market a few weeks ago and I always knew it was a great unit.
As the auction drew nearer, my detective head told me that it could prove to be an opportunity for my client, who was happy to renovate. On the Monday prior to the auction, I called him to say, "it’s top floor, has 2-bedrooms, 2-bathrooms, a separate laundry, a 24m2 lock up garage, ocean views, is light and bright and has a blue ribbon address. Get the contract looked at, buy the strata report and let's have a go".
He took my advice and five days later, I bought him this cracker for $1,025,000 at auction. Oh, and by the way, the lock up garage is on a separate title - congratulations Dan!
The Auction Strategy
I had my pre-auction strategy meeting with my client.
The agent had been quoting $850k - $900k but my own research showed it was worth more – what a surprise!
After going through my research again, we settled on a maximum bid, which he then gave me in writing.
It’s always good to suss out the competition so on the day, I got there early to see who was registering to bid. My heart sank when I saw a baby boomer helping their adult child buy the property (the worst kind of competition to come up against!).
By the time registrations closed, there were four of us ready to bid and at 11:15 am, we were off. I stuck to my strategy and opened the bidding at $910k.
I heard a young farther, with toddler in tow, tell his partner over the ‘phone that they were already out. I felt bad for him but I had to stay in my bidding zone!
Only one party bid against me and they were two male developers. I knew immediately that I had to be super aggressive to slow them down. Every time they made a bid I immediately came back with mine. I varied my bids, back and forth, between one, five and ten thousand. Until we reached $1m they were almost as fast as me but from then on, they started whispering to each other.
Bingo! They’d met their reserve.
For the next couple of bids I made strong eye contact, laughed and smiled. I made it look as if I had all the money and time in the world.
Finally, the auctioneer turned to me and dropped the hammer.
Sold for $1.025m.
I couldn’t wait to call my client and tell him the good news.
Sign of the market
Would that have happened this time last year? Highly unlikely but that doesn’t mean that the market is in free-fall.
Yes, the madness that started late 2012 has mellowed but at the very least it’s become more of a level playing field between buyer and vendor.
A 15% drop is big but let’s get perspective. 80.1% wasn’t a hot market, it was a volcanically sweltering and sizzling market where a lot of people got burnt.
Today, in my humble but professional opinion, when a vendor sells a good property at a realistic price, there is equality between them and the buyer.
Just like the property I sniffed out, you can find good buys, but mostly it’s the rubbish properties that aren’t selling. This is why you never panic buy “a lemon” in a hot market but that’s a whole other story for another day!
On Sunday I decided to nestle in and read the paper. I imagined a relaxing read and a coffee but that was not to be. I didn’t get further than the Hot Auctions on page 105. Yes, the headline implied that the journalists went looking for hot auctions but they didn’t have to look too hard.
This is what they found…
If you’re in the market to buy a property, click below for my free download:
8 Questions You Must Ask The Real Estate Agent Before You Buy
The Key To Buying In This Market
As I said earlier, this weekend has shown that the market is truly patchy. So, if you like a property, don’t sit back. Move just as quickly as you would have last year and get your unconditional offer (on contract with a 10% deposit cheque) in long before auction. Ultimately, the race is with yourself and time is money in real estate.
The only caveat, is that you need to know when to move quickly and as with my auction on Saturday, when to hang back. I guess that comes down to market experience and knowing the right questions to ask.
The Key To Selling In This Market
A really fantastic and highly recommended agent, who has worked every market be that cold, warm, hot and sizzling and who knows how to deal with buyers. Listen to their advice.
I’m looking forward to hearing your thoughts on the Sydney market.
Until next time…