Real estate in Sydney Australia
Real Estate in Sydney Australia is attractive, with a wide range of opportunities for investors, whether in the residential, commercial or industrial market. While traveling in Sydney, I had the pleasure of meeting Dean Jarman, real estate agent from the Ray White network in Paddington. He agreed to answer my questions for the Agence Etoile website.
Is demand for real estate in Sydney remaining strong?
There is a good chance that demand will always be greater than supply, it has not always been like that. This is very specific to the Centennial Park district, 4 kilometers from the City. My team and I are local specialists. The neighborhood is pleasant and well served. The market is ideal for holding auctions. The average registration for an auction is 3 to 6 prospects.
What is the impact of rising interest rates on the Sydney property market?
Clearly, not much.
There are two reasons that move the market: one is people’s perception, the other is what is happening in reality. People may lose confidence in the market and stop buying. So the market freezes. The example is the financial crisis of 2008. In Australia, when the crisis started, the Australian markets were not affected at all. On the other hand, people lost confidence and the market contracted. At the moment, despite the rise in interest rates, the residential market remains dynamic because there is a shortage of inventory and demand is strong. Confidence in real estate is holding up. As a result, prices are holding up even though we have been experiencing thirteen monthly increases in interest rates since May 2023.”
Owners are starting to sell mainly investment products. Of the seven properties sold this week, only properties were rented. Owners are selling because it costs them too much with the rise in rates. (In Australia, the rates are fixed for the first two years, then become variable – Editor’s note)
What is the average duration of loans?
In Australia, most loans are for 30 years. But banking practice has changed since 2019 with the Responsible Lending Act. Before 2019, Australian banks lent easily and now they are more responsible. It becomes difficult to obtain a 30-year loan because banks only lend for 20 years depending on the age of the borrower.
How do you estimate the selling price of a property?
We look at the logic behind the sale, the properties recently sold, the composition of the property, its condition, its environment. But in reality no one knows how much each property will sell for. We make an estimate, discuss it with the seller. Depending on the visits, we take the pulse of the buyers. Buyers are very sensitive to what has sold in the neighborhood. It is very important to listen to the market. You have to know how to ask the right questions.
Also read: What about real estate in the world?
When do you propose to the seller to organize an auction?
In case the demand is higher than the supply, we always offer the auction. In my opinion, the price from the auction is the true market price. It is the principle of supply and demand and we can say that we are really at the right price.
If we do not arrive at the reserve price, we can negotiate with the seller and the buyer Whoever has the highest bid, below the reserve price, has priority to negotiate amicably.
How do you set the listing price and the reserve price?
It is the seller who sets his reserve price, the starting price of the auction. The amount of the starting price, the guide price, cannot be less than 10% of the reserve price, this is generally the amount of our evaluation.
What are the guarantees for the seller if the buyer does not obtain their loan?
The buyer always presents a pre-approval from his bank to finance his acquisition; When he registers to participate in the auction, he waives any suspensive conditions. He undertakes to deposit 5 to 10% of the sale price as a deposit. This down payment, the deposit, is deposited into an account in the name of the seller which earns him interest. If he did not obtain his loan, he would lose his deposit.
How long does it take for the final sale to be signed?
It is a notary who carries out the transfer of ownership. It takes about a month for the final sale to be made and for the seller to receive the sale price.
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