Global AI Wire
Open homes in parts of Sydney are failing to attract even a single visitor as falling home prices and fears of further interest rate hikes fuel one of the biggest buyer retreats in decades. Exclusive data from Ray White, the largest real estate sales agency in the country, showed foot traffic at open for inspections has plunged since this year’s first interest rate hike in February and intensified after the federal budget. Nationally, the average open home over August attracted 2.2 people, down from 4.5 people in February, but visitor numbers were close to zero in parts of Sydney.
This included in suburbs Barangaroo, Putney, Oakville and The Ponds. It comes as CBA Tuesday warned Sydney home prices could drop a total 13 per cent, peak to trough. It echoed similar forecasts from ANZ, which forecast a 14.5 per cent average Sydney fall.
Falls of this magnitude would make the current Sydney downturn the largest since 1982-83, ANZ claimed. National inspection attendees per home. Source: Ray White Sydney’s quietest and busiest suburbs for open home attendance.
Source: Ray White Realestate.com.au figures showed Sydney home prices have been falling for six consecutive months and are now an average of 5.8 per cent below their November peak. Ray White chief economist Nerida Conisbee said both buyers and sellers were sitting on the sidelines. “The market is in a state of uncertainty and people aren’t transacting,” she said.
“If you’re (buyers) seeing prices falling, you’re certainly not in a rush to jump in because there’s a potential for them to fall further and particularly with a lot of the forecasting that’s coming out. “The big unknown at this point is what will happen to interest rates, if they increase again it will lead to a bit more prolonged weakness, but overwhelmingly we can see that open home attendance is stabilising, people are starting to look through the uncertainty.” Ms Conisbee said the busier inspections tended to be blue chip suburbs. MORE: ‘Lost control’: Every Sydney home loses $87k in value Ray White Chief Economist Nerida Conisbee Suburbs with the greatest average attendees per open home included Roseville, Penhurst and Cremorne averaging around six to seven attendees per open home.
Ms Conisbee said interest in these suburbs may have been spurred by the prospect of buyers getting a discount due to recent price falls. “That is probably the biggest shift we’ve seen post-budget,” Ms Conisbee said. “If you go back to pre-budget, we were seeing a lot of attendance at much more affordable suburbs primarily because that was where first home buyers were congregating and the activity from first home buyers was really strong leading up to the budget, primarily because of the 5 per cent deposit scheme.
“Now, what we’re seeing is prices are coming back, it does seem to be that because we’ve got investors pulling back and they tended to congregate a more affordable suburbs, leading to a lot of weakness in more affordable suburbs from an open home attendance perspective.” MORE: Families cop $130k blow in parts of Sydney Buyers and sellers are said to be currently sitting on the sidelines. Picture: Toby Zerna Ms Conisbee added there was a sharp drop in attendees occurring post-budget, but since then it has flattened out. “Nationally, the average open home attendance has been sitting at 2.2.
It’s up from about 2.1 in July, so it’s not exactly roaring ahead, but it’s definitely not still falling,” she said. Ray White Economist Atom Go Tian said home attendance began to fall in February in Sydney, with the data capturing the “uncertainty and caution” coming from buyers. “The great thing about open home attendees is that it captures sentiment better and in advance of any other metric generates,” he said.
“This tells us how buyers are feeling, especially in these suburbs, which are mostly premium suburbs. “These are the suburbs that are mostly affected by the uncertainty that’s happening at the moment and obviously it is those higher priced ones.” Right Property Group Director Victor Kumar echoed that the price points were the greatest factor for the lower attendee suburbs. “If you look at these areas there was a lot of investor activity in there and now with negative gearing not there, a standard $1m purchase comes in with a 40k per year plus holding cost.
“That’s getting people to take a step back and reassess.” However, Mr Kumar said he was seeing reduced numbers across the board in all suburbs. “If you look at the more affordable areas like western Sydney corridor, where it used to be at a home open I’d go in there and I’d see a dozen or two dozen people, I’m lucky to get one or two people that are inspecting the property while I’m inspecting. “It’s not just Sydney, I’m also seeing the same thing in Brisbane where I have agents that are texting me saying they had no one at the open home.” MORE: ‘Never been shakier’: Builder collapse threatens homes
Source: realestate.com.au
