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.

Episode Transcript

Speaker 1 (00:01):
Welcome to today's Morning Minutes.
Billy and I will be talkingabout where are all the bargains
going?
Stay tuned, I'm the ringleader,so let's go.

(00:46):
Transitional property marketwith lots of different ups and
downs and two very differentsectors.
You've got your entry-levelmarket of apartments and housing
with your high-end market, withapartments and housing both
sort of doing their own thing.
We're seeing lots of commoncomplaints or frustrations with
buyers.
But, Billy, maybe this morninglet's start with your
entry-level apartments houses.

(01:07):
What is some of the feedback?
What are the trends?

Speaker 2 (01:09):
you're seeing, yeah and look, we're representing
clients that are often in anapartment trying to then
transition into the entry-levelprice point of a house.
So I call it bracket creep,where you used to be able to
distinguish quite easily what anentry-level apartment was just
by price um on the northernbeaches.
To put it into perspective, 12,18 months ago you used to be

(01:32):
able to buy an apartment, twobedrooms, in a beachside suburb
like dy for 800 000 and to findthem 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 stockon the market for sale.
They're certainly not beingpublished as sold results and
we're using case-by-case studiesum to suggest that the

(01:57):
entry-level price points havemoved permanently.
So where?

Speaker 1 (02:02):
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 tobe within?
You would have said 750 to 850or 8 to 900.
Yeah, now you're saying there'svery little in that market.
What would be that new bracket?

Speaker 2 (02:18):
of that.
The median price for anapartment now on the northern
beaches in a suburb like dy is995 000.
Right, it's a bigger price, soI mean that's the median.
Don't get me wrong.
You can still buy it under that.
Um, but that would be the rangenine to nine.

Speaker 1 (02:35):
Ninety would be would be the entry level price and
where that really affects peopleis who haven't bought at all.
Like, because if you've alreadygot a studio apartment or a
one-bedroom apartment, you neverreally see two-bedroom markets
go up and one-bedroom markets godown.
They run in sync.
So the numbers may be bigger,the loan repayments may be
bigger, but your percentagesshould be very similar.

(02:56):
But if you haven't got thatfirst property paying $800,000
but now potentially a million,that's a big 20% increase.
Are you seeing similar in thehousing market?
So entry-level houses could beBeacon Hill, narrowena.
What are you seeing there?

Speaker 2 (03:11):
We've got some good data to show you there.
But the last 12 months has beenquite interesting because for
houses they have been trendingon an upwards trajectory but
it's almost catching up halfwayin the middle of where they'd
come from in the in the previous12 months before that and and
what what that means is peoplehave a feeling like they missed

(03:35):
the bargain, but they're nervousthat then to buy now because
they think it's still sort of inin that territory.
But the data suggests that it'sthe days of the bargain or the
prices 12 months ago now yeah,like I think it's all within
relative.

Speaker 1 (03:52):
So this graph is showing where the pricing was
middle of next year, or housesin a lambie.
You see the big decrease.
So you could say there was thebargain hunting and that was
around February of this year andit's slowly creeping up.
But so you may think, oh, I'vemissed the bargain.
But it's all relative.
You've got to know where thenumbers started and where they

(04:13):
ended and what direction they'regoing.
To know if you're getting abargain in 2025 compared to.
Yeah, it may not be a bargainif you bought in 2015.
You're looking at the pricegoing.
This is all crazy.
It may not be a bargain if youbought in 2015.
You're looking at the pricegoing.
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.

(04:34):
So you're still less than lastyear if you're looking to buy.
But it also comes down to it'sall quite minute, like all these
figures at that price point 2.2, 2.3, it's almost rounding.
I know people will be governedby what the banks will lend them
, but it's all been very stableand I think that's the biggest

(04:57):
thing, as much as buyers love tosay we love a rising market or
we love it when it's decreasing.
Sometimes that uncertaintygives a lot of family stress
about.
Well, if I sell now will I noteven be able to buy what I want
because the market's going up sofast?
Or if I sell now, same again inreverse.

(05:17):
So we've been in a very stablemarket which means it is hard to
go.
I got a bargain or I overpaid orI just paid fair market values
a lot more consistent.
So I think in this type ofmarket we always advise buy and
sell in the same market to lowerfluctuation.
But I suppose in this type ofmarket you do have a little bit

(05:40):
more time because you're nothaving you're having one or two
percent swings in real estate.
We've seen five, ten percentswings in quarters.
So you are going to sell fortwo, five, three months later
it's around two.
That makes a big change, notnecessarily the hundred grand
change and the the biggest.

Speaker 2 (05:59):
The biggest difference is the number of the
number of properties for sale tothe number of buyers in the
market stock levels we've beenreporting for a long time now
but they have not changed um ina positive way for buyers.
Since spring last year we'vebeen recording it very, very um

(06:20):
consistently.

Speaker 1 (06:21):
I've had on my own back.
I've been manually accountinghow 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 (06:36):
But to put it into perspective, spring last year,
towards the October Novemberclosing quarter of last year,
there were just under 900properties on the market for
sale.
Northern Beach is realestatecom.
As of this morning it's 634.
Yeah, that's sharp.
In addition to that, whereinterest rates have been

(06:57):
trending in a downwardsdirection, it's given people
more affordability and a littlebit more borrowing.
So the entry-level price pointshave been impacted, first
because to begin with there wasnever many properties for sale
in those price points.
But now the challenge is havingmore buyers, more competition,
and that's what I think isbehind some of these price

(07:19):
shifts we're seeing.

Speaker 1 (07:20):
Yeah, and because we're just coming off a market
COVID around that time periodwhere there was 350 properties
available for sale and then itshot up to 1,000 or 1,200, what
Billy said and then it's come to900.
So there's been a lot of shiftsbut it is quite nice to see
that the pricing has been verystable.
In Australia A lot of ourassets, a lot of our asset value

(07:43):
is in property.
So it's not a market you wantto see fluctuating and dropping
and then big increases.
You want it fairly stable.
Sometimes and I was chatting tomy brother about this with his
property, it's not necessarilythe market.
That's the biggest indicator onif he will sell at a profit or
a loss.
It's the timing of when he goesto market.
He has a quite a very uniqueduplex which is up and down, not

(08:06):
side to side, so it's a verysingle-level house feel.
And I said to him you've got abetter chance of getting a
higher price if there's noentry-level single homes on the
market, because that type ofbuyer would also look at yours.
But if you go to market andthere's a smorgasbord of
single-level homes, well, wellobviously that buyer will choose
one.

(08:26):
Choose that over yours, becauseit doesn't have a separate
owner upstairs, so if you go tomarket with one of them on the
market, compared to 10 of them,will impact your price rather
than the consistency we'reseeing, and also the agent can
impact the price as well.

Speaker 2 (08:42):
Um, so yeah um, yeah, I think that's it this morning.

Speaker 1 (08:45):
We can do another one on the high end market, but
that covers us for this morningin in addition to that, if
you're thinking of getting inbefore spring, um no, it's gonna
have the sale pitch.

Speaker 2 (08:57):
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 lotof owners we're talking to,
they're making preparations now.

Speaker 1 (09:13):
I'm sure you can answer any questions they may
have absolutely coach cool belly.

Speaker 2 (09:18):
Thank you, thanks, guys, have a good day.