News.com.au – 22 June 2015
IT’S not just high prices keeping crowds of homebuyers out of the property market — many of Sydney’s best homes are being made available only to investors and foreign buyers.
Market analysts have estimated that one in 10 of about 90,000 homes sold in the past year were off-market sales that real estate agents didn’t list and took straight to buyer’s agencies representing the wealthiest buyers in the market.
SQM Research’s Louis Christopher said off-market sales were increasing because stiff competition for properties had encouraged rich investors to seek an edge in tightly held suburbs. They pay buyer’s agents lavish fees to inform them about home sales before the rest of the market.
Onthehouse.com.au researcher Eliza Owen added that demand for these services had helped triple the number of buyer’s agencies operating out of Sydney since 2012.
“Being able to buy a Sydney home now has a lot to do with who you know,” Ms Owen said. “In suburbs with a lot of buyer’s agents, regular homebuyers often have few homes left to choose from.”
Off-market sales partly explain Sydney’s record slump in properties for sale. There are just over 16,000 homes openly advertised on the market, compared to more than 22,000 a year ago, according to Core Logic RP Data.
Simon Cohen, founder of buyer’s agency Cohen Handler, said off-market sales were especially popular with foreign buyers, who made up 10 per cent of his firm’s clients and, in other agencies, substantially more.
“They’re looking for the best rental returns and properties that are going to grow. They need someone to help negotiate a deal on their behalf and in a competitive market like Sydney there’s a big need for that,” Mr Cohen said.
“People think these sales are only in prestige areas, but they’re happening all across the city.”
Ray White’s Gavin Rubinstein said real estate agents often approach buyer’s advocates if the sellers wanted to keep the sale private – usually in the case of a divorce – or wanted to simply see if a lofty price was attainable.
“Many will only sell if they get a very high price, so they won’t want to advertise their house for sale. Real estate agents will often take these sales to a buyer’s agency with clients who they know might pay that price,” Mr Rubinstein said.