Property is currently a sellers market because demand for property is outstripping supply. This is supported by a stable and recovering economy, solid jobs market, historically low interest rates that appear locked in for at least the medium-term, plus an array of government subsidy and stamp duty discounts for first-time buyers.
The latest figures say the national stock of homes for sale is 28.5% lower this year than the five-year average. Over the same timescale, new listings are down 12.9%. That’s a tight supply.
As a result, seller discounts are almost non-existent. They average just 3% nationally and 2.7% in the state capitals, according to the latest data from CoreLogic.
Auction clearance rates across the country stand at 78%, a thunderous performance that we last saw in heady days of late 2016 and early 2017. Homes are selling one-week faster on average than they were a year ago when most states were in a boom that was stopped overnight by the coronavirus.
While this means that it’s generally a great time to sell, we know real estate can be complicated at a personal level so it is always sensible to consider your steps carefully rather than rushing to be part of a perceived trend.
Below we’ve outlined some key insights into selling in a hot market.
- It’s about local, not national
Regardless of the national or capital city headlines, property is all about local markets. So while a general environment of positive price growth is good news, always check what is happening to prices in our neighbourhood. Have some conversations with local agents (we’d be happy to help!) and conduct research online to help you to understand how home prices in our suburb is performing and the supply and demand equation locally.
- Is your home hot?
The market may be on fire, but how do buyers feel about your particular house style? While all boats float in a high tide, some property types will be more in demand than others from suburb to suburb. So if you’re selling an unrenovated and dated property in a market of all near new homes, even a hot market may not offer the dividends you hoped for. On the flip side, if you’re selling a large family home in an area clamouring for upgrades, you could be in luck.
- Swings and roundabouts
If you sell when the market is rising, it’s highly likely you’ll also buy your next property in an upward market too. While this can be daunting, there are things you can do. If you’re worried about not being able to find a suitable property to buy, consider renting while you assess your options. Moving to a different suburb or property style – even considering a sea or tree change – can also ensure you cash in on the benefit of the higher price in your original suburb.
- Watch the supply and demand curve
The economic data points to us being in a sellers market, but changes to interest rates, employment or even the calling of an election can change this quickly and it pays to be vigilant. It also pays to ask what is most likely to happen. We are heading towards winter which is usually always a time of fewer homes for sale. This means we can probably expect strong prices off the back of low supply for a few more months to come.
- What’s your life plan?
Regardless of what the market is doing, the most important thing is to consider your own personal life goals and the role that property plays in these. Your property is likely to be your largest financial asset – and your shelter, security and place to raise your family. Lifestyle desires should always be an important influence when you want to sell, not just money and optimising the market. If this feels like the right time for you, then get into the market.
If there is a way we can help, don’t hesitate to reach out. We’d be happy to discuss local prices, buying trends, time-on-market expectations and the type of marketing campaign that will maximise the value of your home.