September 2016 - Mastering the Spring Property Market
By Rich Harvey, Managing Director propertybuyer
With warmer spring weather in the air, what are the prospects for the property market? Will listing volumes rise to meet buyer expectation or will prices continue to track higher?
This September update includes:
1. Mastering the spring property market
1. Mastering the spring property market
Buyers coming out of a winter of discontent may have a reason to smile soon as the spring selling season finally gets underway. Spring spells a vision of hope, new beginnings and casts a positive spirit of confidence over the market as the weather warms up.
Property prices and listings are driven to a large extent by confidence, but this confidence was sorely tested during the protracted election campaign and uncertainty over the result. A serious lack of listings over the winter period and another reduction in interest rates helped drive prices higher as investors and owner occupiers compete for scant listings.
Agents reported listing volumes down 20% to 50% in some suburbs. As a result of these low volumes we have seen auction clearance rates in August just tipping over 80% which is back to the boom time figures of last year.
As we move into the most active season of year, we are likely to see a significant increase in listing volumes - but don't expect to see a massive rush of new stock early in the season. My prediction is for a steady build-up of stock which should result in price growth moderating - which is good news for buyers looking for more choice.
Core Logic report that Sydney home values have increased the fastest of all capital city markets. However the rate of growth is half that of the recent peak rate of growth in July 2015. Average days on market (selling time) is now 42 days for houses and 36 days for units which is approx. 14 days longer than a year ago. But even though the trend for days on market is slowly ticking up - buyers still don't have luxury of time to make offers and play a waiting game. Buyers need to be ready to move on the right property and make quick decisions - especially in an auction situation.
Another trend Core Logic has picked up is that there is an ongoing decline in the number of homes selling at more affordable prices (i.e. greater than $400k). Although there are more units being built the majority of these new units will sell in excess of $400,000.
To make the trend your friend, have a chat to one of our buyers' agents and they can advise the best areas to buy and position you to the front of the buying queue this spring.
Here's my five quick tips to navigate the spring market:
- Get cashed up:
Have your finances in place with your deposit (either cash, available credit or deposit bond) ready and your loan pre-approved. Ask us for a referral to a good mortgage broker that can arrange all this for you.
- Broaden your search:
If you are priced out of your favourite suburb, consider adjoining areas. Work out the trade-off between another 5 minutes' drive and the extra dollars you need to spend to secure your home in an adjacent suburb.
- Know thy values:
The Sydney market has moved markedly in the last 3 to 4 years. If you have been out of the market for a while you will get a rude shock to see how much prices have risen. Vendor expectations are still high. Make sure you understand current market value and avoid paying too much.
- Endless searching:
Don't give up on the search. It requires consistent energy and effort to find your dream home. It really is a full time pursuit that requires constant monitoring online and stacks of physical inspections.
- Don't panic:
Spring will see a rise in the volume of listings. While there's a lot of frustrated buyers out there, don't let the frustration make you act out of desperation and buy a sub-standard property. Don't fear missing out - another opportunity will come.
If you are looking to buy in spring we would love to assist in your property search. Please call my friendly team of professional buyers' agents on 1300 655 615 or email your property wishlist today.
Rich Harvey is founder and Managing Director of www.propertybuyer.com.au, Australia's most awarded Buyers' Advocates. Propertybuyer helps property investors and home buyers search and negotiate the right property at the right price, every time. Visit www.propertybuyer.com.au or call 1300 655 615.