An eerie silence has fallen on Sydney open homes, with new figures revealing attendance at inspections has halved since February as would-be buyers digest tax changes and higher interest rates.
Exclusive data from Australia’s largest real estate group Ray White showed the average Sydney listing now attracts two attendees but, for some agents, the turnout has been even lower.
Many are reporting their second and third rounds of open homes have failed to attract even a single attendee, with one declaring on Thursday they had “zero foot traffic”.
First open homes are still attracting splinters of buyers, but many have been reported to be curious neighbours, buyers doing research and so-called “tire kickers”.
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Agent Ryan Wilson at an empty house inspection in North Sydney on Thursday. Picture: Nikki Short
“Even if they come, it doesn’t mean they’re making an offer right now,” said buyer’s agent Peter Kelaher of PK Property.
“Most of the people who would be buying are just sheep standing behind the gate, waiting for the market to bottom out.”
It comes as PropTrack data showed Sydney home prices have fallen an average of 2.5 per cent since the February interest rate hike, with many banks expecting larger falls to come later this year.
ANZ has predicted an 8.4 per cent drop in Sydney home prices this year, while CBA has predicted a 6 per cent average fall.
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Agent Brad Cole packs up after at an empty inspection on Thursday. Picture: NewsWire
REA Group economist Anne Flaherty said many buyers were holding off while they “wrapped their heads” around changes announced in the May budget affecting negative gearing and capital gains tax.
“Tax reforms have structurally changed the market,” she said, adding that the reforms, coupled with interest rate hikes, had created an expectation among buyers that home prices would fall.
This was discouraging many buyers from making moves on properties out of fear they could be overpaying if caught in a falling market, Ms Flaherty said.
Auction clearance rates have been under 50 per cent for weeks, a trend that signalled a buyer’s market, experts said. Picture: Toby Zerna
Ray White data showed the average open nationally drew nearly five people back in February.
Group chief economist Nerida Conisbee said attendance dropped after the first interest rate cut and then “continued to weaken” after the budget announcements.
Two buyers per average Sydney and national inspection was “the lowest result since our series began in January 2020. We now track 13,000 open homes each week,” Ms Conisbee said.
Northside Realtors Crows Nest Brad Cole, speaking to The Daily Telegraph at a Thursday inspection attended by one buyer group, said many buyers were holding back hoping for a discount.
“Buyers are hesitant,” he said. “Buyers have seen a price adjustment, I think some of them are thinking they want more price adjustment.”
B.Invested buyer’s agent Nathan Birch said lower attendance at open homes was not across every property.
“The cheapies are still in demand,” he said. “It’s the higher-end properties, once you go above $1m where the buyers are dropping out.”
Loan Market broker Julian Choo said Sydney was “100 per cent a buyer’s market right now”.
A key sign of this was that agents were pursuiing buyers and not the other way around, Mr Choo said.
“The agents are hounding people who attend their inspections,” he said. “When agents are repeatedly following up it’s usually a sign they are not busy enough. They hound buyers when there is no one else.”
– With additional reporting by Kaylee Cranley
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