“People can’t save as much towards a deposit, there is a risk towards mortgage serviceability. So we’re coming into a bit of a weaker period for the Sydney housing market, and that’s already become quite evident at the high end of the market.”
Loading
She said while some pockets were doing better than others because of a spillover of buyers chasing affordability, it would not last with signs of the economy already falling to its slowest annual growth in GDP in three decades (outside of the pandemic) at 1.1 per cent in the year to March, ABS figures revealed this week.
Westpac senior economist Matthew Hassan said buyer activity in Sydney was slowing.
“The market has become extremely stretched again in terms of prices,” Hassan said. “Whilst we have a dwelling shortage, the extent in which the buyers can meet the market is becoming trickier.”
He said while the market was patchy, with some regions performing better than others, the property market was broadly cooling as most buyers were hampered by the rising cost of living.
“Market-wide people would be very conscious of affordability. There are some segments of buyers that are less stressed. Those buyers would have no qualms about interest rates. In general, for this market, affordability is a central concern for most owner-occupier buyers,” Hassan said. “What we’ve seen today is consistent with a cooling market.”
Marrickville seller Paula Kensington has decided to tap out of Sydney’s property market while her family is still ahead.
Paula Kensington said she feels lucky to have bought the home 15 years ago and wants the next buyer to love it for the next 15 years.Credit: Louie Douvis
“We’re faced with two options: We either do a more thorough renovation and upgrade because it needs it, really. That means we either go in and borrow more money or cash out and move out of Sydney and take the pressure off financially,” said the 54-year-old business owner of CFO advice as well as building regenerative companies.
Kensington and her husband, who will soon become grandparents, are searching for a better quality of life and want to make a tree change. They will take her elderly parents-in-law with them.
“It would be nice to allow myself to have the financial runway to build my business instead of the financial pressures of escalating mortgage repayments.
Paula Kensington with her dogs Miss Stevie and Sir Allan.Credit: Louie Douvis
“How are we supposed to build a better future when all of our money is going into lining the pockets of huge financial institutions that don’t really need it? And that’s from someone who is a finance person themselves!”
Her selling agent, Adrian William’s George Milionis, who works in the inner west where the clearance rate has hovered around 70 per cent which points to price growth, said the fundamental supply and demand imbalance was holding up the market.
He said units were now benefitting from growth as many were priced out of the housing market, and those buyers left were leaning on the bank of mum and dad.
When asked how buyers were still competing for houses in this environment, he said: “With the help of mum and dad. A lot of buyers need help these days, and some of the buyers I’ve spoken with recently are getting help from mum and dad, even upgraders, not just first home buyers.”