To act or to wait: The New Year Question - October 2023
October 19, 2023 / Written by Leanne Pilkington
By Guest Blogger, Leanne Pilkington, CEO,
Laing & Simmons and Immediate Past President REINSW
Each year, as the spring selling season progresses, many buyers and vendors weighing up a property play ask themselves a well-worn question: should I act now or wait until the new year? Are current conditions right or is an improvement around the corner? Laing+Simmons CEO Leanne Pilkington considers the choice from both sides.
We all experience the end of year rush. Pressing work deadlines compounded by Christmas shopping and holiday planning make for a busy time. A property sale can add to stress levels and many vendors who hadn’t organised their affairs prior to spring may feel it’s best to put a sale off until the new year, when things quieten down.
But will things really quieten down? Selling a property need not be overly stressful with the help of a good local agent. They’ll be able to advise on the work vendors need to do to be in a position to mount a strong campaign, in line with what’s reasonably achievable to meet their objectives.
Vendors who don’t view the logistics as insurmountable might benefit from a pre-Christmas listing this year. The current lack of stock is very much on their side. The volume of listings this spring has been down on years past.
This is due to a number of factors, not least the general uncertainty surrounding the trajectory of interest rates and concern among some vendors that they may not be able to find a suitable home to move into, given the current stock shortage.
Nevertheless, demand from our increasing population is strong and the competitive environment for buyers gives vendors reason to be confident in going to market without delay. Not everyone can put off selling indefinitely and there’s no doubt more stock will become available after Christmas than before, which bodes well for those listing sooner rather than later.
The supply shortage is not a quick fix. Demand will still outweigh supply next year. In making the decision whether to list now or in 2024, vendors need to consider the other variables, beginning with the most important: their own individual circumstances.
Vendors should talk to local agents to understand where their property sits in the local context. Get a ballpark price expectation. If they need to buy as well, this will need to be factored in, and research into the suburb of interest will be needed. These basics apply irrespective of timing.
As of October, the next direction rates could go is up in the air. Some feel another rise may be on the cards though the long-term consensus is they’ll begin to trend back down again, perhaps in 2024.
Interest rates are only one of the cost-of-living factors to consider. Worryingly, there are various macro factors which could have a trickledown effect on peoples’ budgets.
There are multiple wars currently playing out. An El Nino event has been declared which brings the likelihood of a particularly hot summer and of course, bushfires. Buyer interest in properties in coastal locations and rural areas might be impacted more significantly this year.
Buyers have a lot to weigh up too. Interest rate uncertainty and the rising cost of living make it more difficult to do the sums. General economic concerns can weigh heavily on peoples’ minds and for first home buyers who are currently renting, the situation is delicate.
On the other hand, the spiralling cost of renting is making first home buyers who have the means to buy all the more encouraged to do so. There’s a sense of urgency among this cohort which might play into the hands of vendors, particularly those selling properties in more affordable suburbs.
Buyers’ mindsets are always alert to economic uncertainty, so the wars and their possible impact on inflation and therefore interest rates will be of concern. But it can work the other way too. Competition among the banks is active and we are likely to see some competitive offers come to market. Buyers should do their research, be clear on their repayment obligations and factor another rate increase into the equation to be safe.
Some buyers may think the new year will bring the opportunity to snag a bargain. If a property fails to sell in the lead-up to Christmas, the vendor may be more willing to negotiate on price. Or so the thinking goes.
But it’s flawed. Failure to sell in the current environment is more likely an indication of unrealistic price expectations in the first place. Experienced local agents will always advise against this. Most vendors who can’t get the price they need are more inclined to hold onto their properties.
Based on their own budgets, it makes sense for buyers to be actively looking in the lead-up to Christmas. A relationship with a buyer's agent with expertise in the area they’re interested in will help, as they’ll have a more complete picture of what’s available.
Despite broader uncertainty, buyers who find the right property within their budget can feel comfortable in the current environment to put their best offer forward in order to secure it. In doing so, they’ll be set for 2024 and beyond.
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