The PROPERTY DOCTORS, Sydney Australia Novak Properties
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The PROPERTY DOCTORS, Sydney Australia Novak Properties
EP. 1451 CAN'T FIND A BARGAIN? YOU'RE NOT ALONE
Wondering where all the property bargains have gone? You're not alone. The Northern Beaches real estate market has undergone a dramatic transformation that's changing the game for buyers and sellers alike.
Today we dive deep into what we're calling "bracket creep" - a permanent upward shift in entry-level price points that's reshaping the market landscape. The numbers tell a compelling story: two-bedroom apartments in beachside suburbs like Dee Why that were available for $800,000 just 18 months ago now command a median price of $995,000. This 20% jump creates a particularly steep hurdle for first-time buyers who don't have existing property equity to leverage.
The housing market presents its own fascinating dynamic. While prices have been trending upward over the past year, they're essentially recovering lost ground rather than breaking new highs. The result? Many buyers feel they've missed the bottom of the market but remain hesitant to commit at current prices. We share concrete data from suburbs like Allambie Heights to help you understand whether today's prices truly represent value or not.
Perhaps most striking is the dramatic reduction in available properties. Our decade-long tracking reveals Northern Beaches listings have plummeted from nearly 900 in late 2022 to just 634 today. Combined with improved borrowing capacity as interest rates trend downward, this supply-demand imbalance continues driving prices upward, especially in the chronically undersupplied apartment sector.
Whether you're looking to buy your first home, upgrade to something larger, or strategically time your sale, understanding these market fundamentals is crucial. Reach out with your questions as you navigate this challenging but opportunity-rich real estate environment.
Welcome to today's Morning Minutes. Billy and I will be talking about where are all the bargains going? Stay tuned, I'm the ringleader, so let's go. Transitional property market with lots of different ups and downs and two very different sectors. You've got your entry-level market of apartments and housing with your high-end market, with apartments and housing both sort of doing their own thing. We're seeing lots of common complaints or frustrations with buyers. But, Billy, maybe this morning let's start with your entry-level apartments houses. What is some of the feedback? What are the trends?
Speaker 2:you're seeing, yeah and look, we're representing clients that are often in an apartment trying to then transition into the entry-level price point of a house. So I call it bracket creep, where you used to be able to distinguish quite easily what an entry-level apartment was just by price um on the northern beaches. To put it into perspective, 12, 18 months ago you used to be able to buy an apartment, two bedrooms, in a beachside suburb like dy for 800 000 and to find them for sale. Now, um, they're just so scarce. There's a huge under supply um, which has been long term now, and we're not finding the stock on the market for sale. They're certainly not being published as sold results and we're using case-by-case studies um to suggest that the entry-level price points have moved permanently. So where?
Speaker 1:would that you're talking about bracket creep. So someone said to us hey, we're looking for an entry-level two-bedroom apartment. What price range do I have to be within? You would have said 750 to 850 or 8 to 900. Yeah, now you're saying there's very little in that market. What would be that new bracket?
Speaker 2:of that. The median price for an apartment now on the northern beaches in a suburb like dy is 995 000. Right, it's a bigger price, so I mean that's the median. Don't get me wrong. You can still buy it under that. Um, but that would be the range nine to nine.
Speaker 1:Ninety would be would be the entry level price and where that really affects people is who haven't bought at all. Like, because if you've already got a studio apartment or a one-bedroom apartment, you never really see two-bedroom markets go up and one-bedroom markets go down. They run in sync. So the numbers may be bigger, the loan repayments may be bigger, but your percentages should be very similar. But if you haven't got that first property paying $800,000 but now potentially a million, that's a big 20% increase. Are you seeing similar in the housing market? So entry-level houses could be Beacon Hill, narrowena. What are you seeing there?
Speaker 2:We've got some good data to show you there. But the last 12 months has been quite interesting because for houses they have been trending on an upwards trajectory but it's almost catching up halfway in the middle of where they'd come from in the in the previous 12 months before that and and what what that means is people have a feeling like they missed the bargain, but they're nervous that then to buy now because they think it's still sort of in in that territory. But the data suggests that it's the days of the bargain or the prices 12 months ago now yeah, like I think it's all within relative.
Speaker 1:So this graph is showing where the pricing was middle of next year, or houses in a lambie. You see the big decrease. So you could say there was the bargain hunting and that was around February of this year and it's slowly creeping up. But so you may think, oh, I've missed the bargain. But it's all relative. You've got to know where the numbers started and where they ended and what direction they're going. To know if you're getting a bargain in 2025 compared to. Yeah, it may not be a bargain if you bought in 2015. You're looking at the price going. This is all crazy. It may not be a bargain if you bought in 2015. You're looking at the price going. This is all crazy. But if you're looking at 2025, you go. Well, the median price was 2.52. It dropped to 2.32. Now we're up to 2.4. So you're still less than last year if you're looking to buy. But it also comes down to it's all quite minute, like all these figures at that price point 2.2, 2.3, it's almost rounding.
Speaker 1:I know people will be governed by what the banks will lend them, but it's all been very stable and I think that's the biggest thing, as much as buyers love to say we love a rising market or we love it when it's decreasing. Sometimes that uncertainty gives a lot of family stress about. Well, if I sell now will I not even be able to buy what I want because the market's going up so fast? Or if I sell now, same again in reverse. So we've been in a very stable market which means it is hard to go.
Speaker 1:I got a bargain or I overpaid or I just paid fair market values a lot more consistent. So I think in this type of market we always advise buy and sell in the same market to lower fluctuation. But I suppose in this type of market you do have a little bit more time because you're not having you're having one or two percent swings in real estate. We've seen five, ten percent swings in quarters. So you are going to sell for two, five, three months later it's around two. That makes a big change, not necessarily the hundred grand change and the the biggest.
Speaker 2:The biggest difference is the number of the number of properties for sale to the number of buyers in the market stock levels we've been reporting for a long time now but they have not changed um in a positive way for buyers. Since spring last year we've been recording it very, very um consistently.
Speaker 1:I've had on my own back. I've been manually accounting how many listings are on the market each week for a decade, so we know the stock levels. To show your age, though, yeah, and we know how many buyers are inquiring.
Speaker 2:But to put it into perspective, spring last year, towards the October November closing quarter of last year, there were just under 900 properties on the market for sale. Northern Beach is realestatecom. As of this morning it's 634. Yeah, that's sharp. In addition to that, where interest rates have been trending in a downwards direction, it's given people more affordability and a little bit more borrowing. So the entry-level price points have been impacted, first because to begin with there was never many properties for sale in those price points. But now the challenge is having more buyers, more competition, and that's what I think is behind some of these price shifts we're seeing.
Speaker 1:Yeah, and because we're just coming off a market COVID around that time period where there was 350 properties available for sale and then it shot up to 1,000 or 1,200, what Billy said and then it's come to 900. So there's been a lot of shifts but it is quite nice to see that the pricing has been very stable. In Australia A lot of our assets, a lot of our asset value is in property. So it's not a market you want to see fluctuating and dropping and then big increases. You want it fairly stable.
Speaker 1:Sometimes and I was chatting to my brother about this with his property, it's not necessarily the market. That's the biggest indicator on if he will sell at a profit or a loss. It's the timing of when he goes to market. He has a quite a very unique duplex which is up and down, not side to side, so it's a very single-level house feel. And I said to him you've got a better chance of getting a higher price if there's no entry-level single homes on the market, because that type of buyer would also look at yours. But if you go to market and there's a smorgasbord of single-level homes, well, well obviously that buyer will choose one. Choose that over yours, because it doesn't have a separate owner upstairs, so if you go to market with one of them on the market, compared to 10 of them, will impact your price rather than the consistency we're seeing, and also the agent can impact the price as well.
Speaker 2:Um, so yeah um, yeah, I think that's it this morning.
Speaker 1:We can do another one on the high end market, but that covers us for this morning in in addition to that, if you're thinking of getting in before spring, um no, it's gonna have the sale pitch.
Speaker 2:You must you must consider, uh, selling in isolation versus in competition, and I do think spring is going to come around very soon. But a lot of landlords, a lot of owners we're talking to, they're making preparations now.
Speaker 1:I'm sure you can answer any questions they may have absolutely coach cool belly.
Speaker 2:Thank you, thanks, guys, have a good day.