'A lot of buyers coming back' — quality homes attracting quality competition

When you're selling your home, it pays to think like a buyer. 

Having a genuine understanding of what buyers want and how best to appeal to them is a surefire way to drum up competition, regardless of market conditions. 

We spoke to Michelle May, one of Sydney's leading buyer's agents and host of the Buy Your Side podcast, to find out exactly where buyers are at, what they're looking for, and what 2023 could bring.

Buyers are returning to the market after an unsettled year

In 2021 we saw FOMO take hold like never before, with buyers snapping up anything and everything that got listed. 

This year has seen that heat dissipate, though, as interest rate hikes began to inject some fear into the market.

"The media were saying 'prices are going to drop 30 per cent' and of course every single buyer that was talking to us just said we're going to wait and see what happens," Ms May explained. 

Those predictions of a full-blown market crash haven't come to pass, though, and the needs of those same potential buyers haven't faded away. 

"What we're seeing now from about a month ago is that those people are all coming back,"

"They're realising that, A, prices haven't dropped as much as all the experts were predicting, and B, they can't find what they want," she said.

Ms May added that she has been dealing with an increasing number of buyers ready to commit who are finding a shortage of desirable stock on the market.

Quality homes are attracting quality competition

Buyers are taking a much more considered approach this year, but there's no shortage of properties still selling for standout prices. 

"People are still wanting to purchase, and good quality property is getting competition," Ms May explained. 

Well-located family-size homes are seeing strong interest from a wide cross-section of buyers. 

"The three and four-bedroom houses in particular are really interesting to young family buyers who want to live in them for 20 or 30 years. They're the ones that haven't dropped anywhere near as much in price," she said, adding that downsizers are also seeking those same properties and boosting demand. 

Whether it's a study nook at the end of a hallway, a spare bedroom or even space in the garden for a studio, Ms May noted that the home office trend is "here to stay" and sellers should highlight that aspect of their properties. 

Homes in ready-to-move-in condition are also seen far more favourably in a moment marked by high renovation costs and long wait times for trades, she said. "People are really shying away from any house that needs a significant amount of work."

In the unit market, while high-density, cookie-cutter apartments that are in high supply are struggling to sell, there is "a real gap in the market" for quality, established builds with more than two bedrooms which, again, appeal to both downsizers and first home buyers.

How can sellers maximise buyer competition? 

With cost-of-living pressures weighing on the minds of all Australians, Ms May said she's seen some sellers try to cut corners and minimise spending on things like marketing and agents. 

Since buyers are approaching things with a more selective mindset, though, those sellers are ultimately "shooting themselves in the foot" by weakening that all-important first impression of a property. 

"In my experience, a lot of buyers have become lazier. Even if there's a lack of stock on the market, they'll look at listings on REA or Domain and say 'ew, no I don't want to live there.' A lot of them can't look beyond the photos or the styling," she said.

"If you're a seller, you've got to sell them the dream."

"Particularly if the house isn't renovated, you've got to spend that money because you're going to potentially going to cut a whole segment of buyers out of the market who won't even look at your property because you've got your nana couch in the living room."

Things like home staging, a fresh lick of paint, high-quality photos and excellent presentation are all essential in the current climate. So is choosing the right agent rather than opting for the cheapest option. 

"In this market, as a vendor you have go for the right agent, don't just go with the agent who tells you want you want to hear," Ms May said. 

"Go with the agent that has listings of the same calibre as your property, knows the area, has the database, and gives you advice on how to best present your property to the market."

The money saved by choosing an agent with a lower commission could pale in comparison to the final sale price achieved with an agent that's going to excel. 

What's in store for the coming months? 

With 2023 fast approaching, Ms May is convinced that there's a resurgence in activity around the corner. 

"Now we're coming into Christmas, there's less stock, and we're getting a lot of enquiry from buyers who want to sign up yesterday because they realise that 30 per cent drop hasn't happened," she said. 

"Those people who have put their lives on hold, they're at the point where their situation hasn't changed. They still need to buy because they just had another baby, because they've moved to a different state — whatever that reason is, it hasn't gone away."

Her expectation is that, once the holiday period is over and the market kicks back into gear early next year, that buyer-side demand will only be helped by the pressures of an extremely tight rental market. 

Rising rates are still a key factor when buyers are assessing their finances, with reduced borrowing power potentially pushing their property search further out. 

Still, she pointed out that "in the scheme of things, if you look at it over a 20-year period, interest rates are incredibly low."

We're yet to hit the peak of interest rates, but after six months of hikes there's more acceptance of the changed market conditions, and people are ready to get on with things. 

"There's going to come a point where [other buyers] get over that fear and they either start using someone like myself or they go at it alone, but they will come back."