In addition, many of these premium lifestyle areas boomed post-pandemic when people brought forward decisions to move to them, and activity has since softened, Powell says. Listing and trading volumes are likely to be smaller and a few less expensive sales could lower medians disproportionately.
Buyers’ agent Rich Harvey, CEO of propertybuyer.com.au, agrees there can always be a lower volume of high-priced sales that brings the median price down.
North Bond’s median house price has fallen.Credit: iStock
“We’re seeing a general reluctance by vendors to put their properties on the market right now,” Harvey said. “They’d been waiting for another rate cut to buoy the market, but that hasn’t come yet and probably won’t be till next year now.
“So they’re holding off and most agents are telling their vendors to wait until January or February as then they’ll get a better price.”
A shortage of property on the market is having an effect too, he believes. Latest Cotality figures have advertised supply levels over the four weeks to October 26 at 18 per cent below the five-year average.
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That means vendors are even less keen to list their homes for sale, knowing there might not be much on the market that would suit them to buy.
The effects have been evident in some of Sydney’s most in-demand suburbs. Burwood’s median price has dropped 18.5 per cent, North Bondi’s 9.2 per cent, North Willoughby’s 9.8 per cent, Mosman’s 5.8 per cent and Rose Bay’s 5.9 per cent.
Other suburbs showing sizeable falls in value are Northbridge at $314,500, Glebe at $290,000, Lindfield at $289,000, Neutral Bay at $280,000 and Coogee at $235,000.
Buyers’ agent Stuart Jones of Jones Property Advisory sees those falls as a sign of critical supply and demand bottlenecks in some premium suburbs.
With much of the inflation of the COVID years now baked into the economy, as well as a generally rising cost of living, there are major restrictions on some purchasers’ ability to buy and to borrow, he feels. Some top-end vendors have higher expectations than are realistic, but they’re reluctant to adjust them and prefer to hold on to their properties, exacerbating the supply crisis.
“The expectations of vendors aren’t meeting the capacity of buyers to buy,” Jones said. “Labour costs are up and school fees are rising by 10 per cent a year, and many of the home owners in those premium suburbs send their children to private schools, so they’re being affected too.
“Population growth, and people living better for longer, has meant there are more people wanting to buy, and interest rates are lower now than the historic average of circa 7 per cent, but there’s just not that supply to meet the demand. So buyers just can’t buy. It’s a whole supply chain bottleneck.”
Powell believes prices will eventually bounce back in those premium suburbs, particularly if there are more indications that rates could be cut next year.
“As soon as better selling conditions come along, a lot of those potential vendors will move.”
