| 10.06,19. 01:47 PM |
Sydney property 'stagnant' as listings drop to 12-year low
Photo: The Reserve Bank of Australia has cut official interest rates to 1.25 per cent. (ABC News: Alistair Kroie)
Homeowners are holding off selling their properties, with fewer new listings than at any time in the past 12 years.
The slowdown is most noticeable in Sydney and Melbourne, where there are 30 per cent fewer properties for sale than there were at the market's most recent peak.
The situation has become so bad that the decline of stamp duty revenue in the two states is undermining the governments' budget positions.
Over the same time the number of listings nationally has dropped by 20 per cent.
The housing snapshot is taken at the end of May each year by industry analyst CoreLogic.
It shows the number of real estate listings in Brisbane, Canberra and Perth has also fallen over the past year.
But in some other capitals the market is more positive, with Adelaide listings increasing slightly, and Hobart and Darwin also improving.
'There were just no buyers'
Infographic: New property listings (Source: Corelogic)
The slowdown is being felt even in gentrified suburbs such as Yarraville, in Melbourne's inner west.
Property investor Dana Sawyer spent $30,000 on a renovation before listing her three-bedroom house at $800,000 to $850,000.
But the house went on the market just before the election and failed to attract any offers.
Ms Sawyer said she was surprised that potential buyers were so hesitant.
"Everyone was very nervous; it seemed like people were just reluctant to do anything," she said.
"There wasn't much competition, the price seemed OK, there were just really no buyers."
"Even if it was staring them in the face that they should buy the home, they weren't pulling the trigger," he said.
He believes buyer reluctance has become so widespread it has led to owners delaying the decision to list their homes for sale.
"A lot of vendors are worried that their home won't sell, because the buyers aren't making buying decisions," he said.
"The people who can hold on are just putting things on the backburner and seeing what happens."
But he says the resulting lack of supply on the market has put a floor under prices.
"That's led to multiple bidders at auctions again. That's led to some prices just tripping up higher. It feels like we have bottomed out slightly," he said.
Downsizing put on hold
In Sydney, retirees Tom and Larissa Bergmann have shelved their decision to downsize, due to the sluggish market.
They have lived in their house on a quiet street near Botany Bay for more than 20 years.
"When we first moved here, the prices were going up and up all the time," Larissa Bergmann told 7.30.
"But lately it's pretty levelled out and possibly even — what would you say, stagnant? Lowered?
"Yes, definitely lowered, that's for sure."
It's a big house with a garden, and with both now in their late seventies they have been considering a smaller property that will be easier to manage in the coming years.
"I was looking around because this place is so big," Ms Bergmann said.
"I'm hopeful that we might at some stage soon move out so that I have less to worry about."
But they are not expecting that to be any time soon.
Domain economist Trent Wiltshire sees signs that things are slowly turning around.
He points to the Reserve Bank's recent rate cut, changes to lending rules by the banking regulator APRA, and the result of the federal election as contributors to a shift in mood.
"Buyers are a bit more interested in buying, even just a few weeks post the election, so there's been a bit of a turnaround," he told 7.30.
But he says Domain's property sales records show that earlier this year the number of housing transactions reached the lowest level in decades.
"In the early part of 2019 we did see sales volumes fall to their lowest level in at least two decades," Trent Wiltshire told 7.30.
"It's a bit of a self-fulfilling prophecy, that people see prices falling and delay a purchase, and on the other side sellers are very averse to making a loss."
Mr Wiltshire believes the market will probably bottom out this year.
"But I don't see a big turnaround happening, maybe just prices bottoming out, then pretty steady prices for the next year or so."
When 7.30 visited Ms Sawyer, she was about to try again and hoping for a result at auction on the weekend.
"Definitely more parties have been through," she said.
But if that doesn't work, she has a plan B.
"If we don't get the price we will keep the property and put it back on the rental market."