"The confidence is really good, it's back," Chris Wilkins of Ray White Drummoyne told SCHWARTZWILLIAMS.
Weaker prices and higher listing numbers are injecting renewed confidence into the Sydney property market, says Ray White Drummoyne agent, Chris Wilkins.
CoreLogic's Home Value Index for February shows that Sydney property prices fell 0.6 per cent for the month, and are down 0.5 per cent for the year, the first time prices have fallen into negative territory for the year since 2012.
Wilkins said listing numbers are up, and numbers at open homes are down, but the return to a more "normal" market is giving buyers and sellers greater confidence to transact.
"The confidence is really good, it's back - I love it. This is a normal market. The whole mindset is one of motivation, confidence and enthusiasm," Wilkins told SCHWARTZWILLIAMS.
Where buyers have been too nervous to sell before buying for fear that higher prices and low stock volumes would mean they wouldn't be able to buy back in, they are now prepared to sell first, knowing there is plenty of stock on the market.
"Prices are down, but people will adjust. They'll find their feet. The element of trading is back," said Wilkins.
The CoreLogic Home Value Index: overall prices down for the year
Australian property prices overall fell by 0.1 per cent during the month of February, making a gain of only 2.2 per cent for the year.
The annual growth rate was the lowest for nation-wide prices in 18 months.
CoreLogic Home Value Index results as at 28 February 2018
Source: CoreLogic.
"The previously high-flying Sydney market is experiencing a correction in prices. More new homes are on the market, giving buyers greater choice. As a result, prices are adjusting to more realistic and sustainable levels," said Craig James, chief economist of CommSec.
Click here to download the CoreLogic report.
Weaker housing prices good news for affordability: HIA
The HIA Affordability Index shows that the softer Sydney prices are helping affordability.
"Softer home prices in Sydney contributed to improved housing affordability during the final quarter of 2017," said Shane Garrett, senior economist of the HIA.
The HIA Affordability Index measures the mortgage repayment burden as a proportion of typical earnings in each market. A higher index result signifies more affordable property.
“The HIA Housing Affordability Index saw a small improvement of 0.2 per cent during the December 2017 quarter, indicating that affordability challenges have eased,” said Garrett.
Home prices in Sydney are now slightly lower than they were a year ago, making buying a more more accessible, particularly for first-home buyers.
However, "affordability conditions in Sydney are still more challenging than any other city," said Garrett.
“It is often overlooked that affordability conditions are favourable in the markets outside of Sydney and Melbourne," Said Garrett.
"Housing prices are more affordable in the other six capital cities today than has typically been the case over the past 20 years – primarily due to very low interest rates.
“Housing affordability is still a very acute problem.
“To win the affordability battle, governments need to make tough decisions on reducing the tax burden on new home building, speeding up the planning process, and releasing new residential land in a more timely fashion,” said Garrett.
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