02 July 2024
End of Financial Year Market Wrap
As we step into a new financial year, it’s time to reflect on our dynamic real estate market and its evolving landscape here on the Northern Beaches. At Cunninghams, we’ve been closely monitoring trends and shifts to provide you with the most insightful updates. Below we have summarised market commentary from the last 12 months to paint an accurate picture on how things are looking when it comes to buying, selling, and investing. While the market remains measured and some buyers are acting with caution, we continue to see signs of strength and robustness from our local market, an area that has consistently seen demand outstrip supply.
Current Market Overview
The past financial year has been characterised by a low stock environment, similar to 2023. This year, a brief pre-Winter surge in listings has given way to tightened supply once again. Buyers are navigating the market with caution, influenced by cost-of-living pressures, including more uncertainty around interest rates. Downsizers are moving to more manageable homes – financially and practically, while upsizers are wary of rising building costs and taking this into account when making big decisions.
Buyer Sentiment and Market Stability
At Cunninghams, we had a strong start to 2024 with 109 sales in Q1 and 114 sales in Q2 and significant increases in our market share in key Northern Beaches suburbs with 436 sales for the whole 24 financial year. Our offices in Balgowlah, Collaroy, and Avalon Beach continue to serve the Northern Beaches as one, non-competing team and we look forward to similar, stable conditions on the beaches over the rest of the calendar year.
We observed a slight uptick in buyer sentiment towards the end of 2023, coinciding with a pause in interest rate hikes. The start of 2024 brought a sense of renewed enthusiasm, which has since transitioned into cautious optimism. Many buyers are adopting a ‘wait and see’ approach, awaiting the next interest rate decision. Simultaneously, others recognise that future demand for property is unlikely to wane, making now a prudent time to enter or remain in the market.
When it comes to property prices, we have noted more stability after a spike from mid-2023 to April 2024. This stability is now crucial to stimulate market activity, and we anticipate this trend to continue shaping the market for the remainder of the year. The median sold price for the Northern Beaches has been reported by REA Group as $2.15m as at May 2024, and despite the lack of stock and cautious buyer behaviour, this number has remained in the low $2m’s since February.
Supply and Rental Market Dynamics
A persistent lack of housing has supported the market over the year, and new supply will take time to materialise. The scarcity of investors acting in the market remains a challenge, exacerbating rental shortages and driving rents up by 10% to 20% in some areas over the past 3 years with a considerable 21.1% drop in days on market for leased properties on the beaches. This has put significant pressure on tenants, highlighting the critical need for more investment in rental properties.
This Spring will be an important indicator of market conditions, and with indications from a number of clients that they intend to launch their property for sale in July and August to get a jump on the usual spring stock surge, so we look forward to watching this space with interest.
Importance of Presentation and Pricing
Property presentation is paramount in determining how buyers and sellers perceive a home. We have mentioned this time and time again, however the power of professional styling cannot be underestimated, as it consistently enhances value and emotional appeal for buyers.
Realistic price guides are also essential for market engagement, striking a balance between setting a price that reflects market value without underquoting. Listening to your agent when it comes to market dynamics ensures everyone understands buyer behaviour in the market and can lead to better sales results and more efficient campaigns.
Strategic Planning
Having a well-defined strategy is vital in this market, and whether you’re buying, selling, or renting, a clear plan helps navigate the complexities and seize opportunities effectively.
Our Recommendations:
- For Buyers: Stay informed about market conditions and be ready to act when the right property comes along. With the market stabilising, now is a good time to assess your options and plan for the long term.
- For Sellers: Invest in professional styling and set realistic price guides with your agent. This will enhance your property’s appeal and ensure it stands out in a competitive market.
- For Investors: Consider the rental market dynamics and the rising demand for rental properties and play the long game. Now might be an opportune time to invest in rental properties to capitalise on the upward trend in rental prices. As always, do your due diligence and seek professional advice before making any financial decisions.
As we move forward, we remain committed to providing exceptional service and insights for our clients. Here’s to a prosperous new financial year, with stability and strategic planning at the forefront of our approach.
If we can help you take the next step with your property goals in 2024 or beyond, please don’t hesitate to get in touch.
