Home owners told no need for 'panicking' amid Sydney property slump

Sydney's property market is leading a national downturn, with home values in the city dropping by 0.9% in May, according to recent data. Homes in the most affected areas saw values decrease between 1.4% and 2.6%. The median value for Sydney homes, including units, now stands at $1.28 million. This trend follows a months-long cooling period, exacerbated by multiple interest rate increases and changes to negative gearing and capital gains tax announced in the federal budget. Industry experts anticipate this trend may continue, but they are advising homeowners against panic. Tina O'Connor, a licensee at Ray White Annandale in Sydney's inner west, noted a clear "softening" in home prices recently, particularly in higher price brackets. "Prices have been pretty resilient compared to some areas because the inner west is pretty buoyant … but we have seen buyers become a bit more selective," she said. O'Connor assured prospective sellers that the market is still active, though some homes are taking longer to sell. "I don't think we should be panicking … because well-presented homes that are correctly priced from the beginning are still selling," she stated, expecting the market to remain "a little bit flat" for some time. Michael Catalano, managing director of True Property, observed a significant drop in buyer confidence post-federal budget. He reported that buyers' purchasing budgets have reduced by approximately 10% to 15% as banks have tightened lending criteria. The average time homes spend on the market has increased from about 28 days to 40 days, and open-home attendance has decreased by about 5%. Catalano reassured anxious buyers, citing historical data that shows Sydney property markets tend to plateau or slightly decrease rather than crash. He anticipates the market will transition from aggressive growth to a more cautious, price-sensitive environment, with buyers being more selective due to interest rates, affordability, and budget uncertainties. The preliminary auction clearance rate across Sydney for the last week of May was 51.8%.

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I don't think we can deny that, particularly in some of the higher price brackets.