Has Sydney's Property Market Finally Found Its Floor?

Every time the headlines report falling prices, I get calls from buyers wanting to wait for the market to fall further. Here's the problem. That data is already old news by the time it reaches you, and right now there are early signs the ground is shifting under it.

Why the data you're reading is always out of date

When the media report on falling house prices, they are working off sold price data, which comes from settled sales. That means someone agreed to buy that property six to eight weeks before the figure shows up in the headline at the end of the month. You are reading about a market that no longer exists.

A slightly faster indicator is the auction clearance rate. In a balanced market, clearance rates typically sit between 65% and 70%. Above 70% is a seller's market, where demand is strong and prices hold firm. Below 65% is a buyer's market. Since the May federal budget, Sydney's clearance rate has been sitting between 40% and 50%, historically low, and a clear sign the last few months have favoured buyers.

But even the clearance rate is a lagging signal. It only tells you what happened at auctions that already ran.

The real lead indicator: who's walking through open homes

The number of buyers coming through open homes on a Saturday is the most current read I have on the market, because it captures people looking before they've committed to anything.

There's no single number that defines a "good" open home, since a one bedroom apartment in Bondi and a four bedroom house on 500 square metres in Marrickville will always draw different crowds. But context helps. Through the back half of last year, a first open home regularly pulled 20-plus groups, and anything over 30 had agents telling vendors it was a strong result. Since the budget, first opens have often dropped into single digits, commonly under 15, and subsequent or midweek opens have frequently seen somewhere between zero and five buyers.

What changed in the last two Saturdays

Over the last two Saturdays, I've been at both first opens and subsequent opens, and the shift has been hard to ignore. First open numbers have climbed back to the 15 to 25 range. Subsequent opens have been running at 10 to 15. Both of those are well up on where we've sat for months, even if they're still a touch below this time last year.

One caveat worth noting: the properties I'm basing this on are all within their first four weeks on market, which is when buyer activity naturally peaks. Even so, this is a genuine shift in buyer engagement, and it lines up with the Reserve Bank holding rates steady and buyers starting to see opportunities in Sydney they couldn't see six months ago.

What this means if you're buying right now

I'm not saying prices are about to snap back to where they were a year ago, and picking the exact bottom of a market is close to impossible in real time. You only ever confirm it in hindsight, once enough data has washed through.

What I am saying is this: if you're currently working on the assumption that prices will keep falling, or that you can land a property $100,000 under the first listed guide, it's worth checking that assumption against what's actually happening on the ground. That strategy worked when clearance rates were sitting at 40% and open homes were empty. It may not work in the same way if buyer confidence keeps building over the next month or two. Price guides in the current market are increasingly landing at or above the eventual sale price, not well under it, and agents will be quick to reprice a campaign once they see two or three strong opens in a row.

This doesn't mean you should rush out and buy the wrong property out of fear of missing a window. A shift in sentiment is not the same as a guarantee, and one strong fortnight doesn't undo months of softer conditions. What it does mean is that your negotiation strategy needs to be based on current evidence, not last quarter's headlines.

Pricing a property accurately right now is genuinely difficult. Comparable sales are thin on the ground, because far fewer people have been transacting, and the comps you can find from a year ago don't reflect where the market sits today. They're better than nothing, but they need to be weighed against what's actually happening at the opens and auctions right now, not what the settlement data said two months ago.

Ready to make a move?

If you're trying to work out what a property is really worth, how to negotiate with an agent in this shifting market, or how to structure an offer that gets accepted without overpaying, I'd love to help. Book a call with me here: https://calendly.com/purchasewithpenny/buyer