One of the major drivers of property prices is sentiment. If you feel confident the market is about to explode, you are more likely to push your budget a little higher with some comfort that if you don't buy now, the price will likely be higher in a few weeks. The opposite is true when buyers feel the market is slowing. They are less likely to make decisions, and with few buyers ready to commit, this eventually becomes a self-fulfilling prophecy.
Our opinion about the housing market so far this year is that it has largely gone sideways. Not up, nor down. Prices remain elevated from last year. But you wouldn't think that looking at the media. As we write this in early April, we have seen conflicting headlines in the space of one week:
'The party's finished': Why Sydney's real estate boom is officially over. It's been a wild ride, but Sydney's pandemic-induced property boom is over – Daily Telegraph March 26, 2022
'Sydney entry-level house prices soar, widening the deposit gap' – SMH April 2, 2022
It seems reporting that the market is actually 'business as usual' does not encourage clickbait to sell advertising space. Given this, prepare to see more doom and gloom stories in the months ahead.
To put things into perspective, our map on page 3 indicates the growth across each of our suburbs over the last ten years. Probably no surprise that almost all have more than doubled in this time.
A year ago, we tried to summarise how different people in the market were feeling. A year later, we have updated this. The overall emotions are less extreme now that the heat has come out of the market. For us, this indicates it is actually a better time to move than a year ago. Although we always find it unusual that most people prefer to make decisions when the media message is all about a red-hot market. Interesting, right?
To try and summarise what we are seeing on the ground, price growth has levelled off here in Newcastle.
For properties that are well presented and with above average marketing in place, we are seeing multiple buyers and healthy levels of competition (but certainly down on last year). A few properties are starting to lag on the market and, in some cases, see their asking prices lowered. Most buyers are just happy to get an offer accepted though some buyers have started letting us know 'they have heard prices have dropped'.
As we write this, it's now early April. It's still raining heavily, Omicron cases are surging, and many people are in isolation. There is also a federal election just around the corner. Given the many things to keep people's attention elsewhere, it wouldn't surprise us if the transaction numbers are lower over the next couple of months and sales pick up heading into spring.