Tags :Home loanshousingMortgagesPROPERTYReal estateSydney
This fierce competition is driving record-breaking price increases, and buyers in Sydney’s most competitive suburbs are at extreme risk of being overpriced.
Pete Wargent, co-founder of BuyersBuyers, is also the president. He said that even in highly desirable areas, buyers can make too many commitments to get on the ladder.
He highlighted nine areas of Sydney – largely around the Northern Beaches, Eastern Suburbs and Inner west – where buyers carry the greatest risk of capital losses.
History is full history of clues. “First, Napoleon observed that victory is the moment of greatest risk,” Mr Wargent stated.
When things seem to be going smoothly, this is called complacency. This can lead to a lack of discipline. It is possible to lose sight of the larger picture.
“A property boom won’t dispel the possibility of capital losses, as we have seen in previous market cycles.”
Below is a complete listing of the top-booming areas.
Wargent reminds buyers to “keep their cool heads”, reminding them to remember that in today’s boom market, 10% of properties are being resold at a loss.
“Buyers need to remember that the tide will turn eventually. Be cool, do your research and ensure you are getting the right price. Mr Wargent stated that you should not focus on the price if you cannot afford a AAA property. Instead, pay attention to the location and tick as many of your boxes as possible within your financial means.
“You can change many aspects of real estate investments. The location is the only thing you can change. This will never change.”
Doron Peleg is the founder of RiskWise Property Research. He stated that the days when you could make a profit by purchasing property are over.
“Even though your excitement was too high to pay 10 percent in Sydney last year, you still made more than 10 percent because the market has seen a greater than 20 percent price increase. Because there was a shortage in stock, buyers were interested regardless of its quality.
“Overbidding is more common with slower price growth 2022 and possibly a stagnant market or small market 2023.
“Naturally-properties with sub-optimal qualities will see lower demand as market cycles move along. They will also be more susceptible to price drops under such conditions.
Mr Wargent said in Sydney particularly there is a danger that buyers are committing their cash at the peak rate of property growth – meaning they’ll have to hold onto an asset for longer to see a return.
“Many markets in Sydney’s prime areas have seen an enormous rise in their prices over recent 18 months. The price growth will slow down and the market conditions normalize, Mr Wargent stated.
“Regulatory moves to limit borrowing capacity will have an impact on house prices in Sydney.”
Bondi Beach property up for sale at $1 million above reserve
Top Nine Property Boom Locations in 2021*
|City:||Suburb:||Type of property||Median price||YoY Growth|
|Sydney||North Bondi||House||$4,077,890||+ 45 per cent|
|Sydney||Dover Heights||House||$4,941,549||+ 44.6 per cent|
|Sydney||South Maroubra||House||$2,812,271||+ 49.6 per cent|
|Sydney||Strathfield South||House||$1,958,495||+ 55.7 per cent|
|Sydney||Mosman||House||$5,319,283||+ 41.8 per cent|
|Sydney||Neutral Bay/Kirribilli||House||$3,539,335||+ 52.2 per cent|
|Sydney||Balgowlah||House||$3,828,329||+ 51.6 per cent|
|Sydney||Manly||House||$4,061,235||+ 51.7 per cent|
|Sydney||Avalon||House||$3,291,012||+ 61.0 per cent|
*BuyersBuyers data. In no particular order