Crystal-ball gazing is always fun at this time of the year, but the 2022 property market is so tricky to predict that we should first contemplate the runaway success of the previous 12 months.
Our homes have all risen dramatically in value. Last year, they were being snapped up within 23 days on average, and their batting average at auction was a consistent clearance rate of 70%-plus.
With Covid dragging on but without previous levels of economic stimulus, buyers may no longer suffer bouts of FOMO – fear of missing out – but simply treat the pandemic as simply another thing to navigate when buying. Other factors, such as the federal election in May, however, may cool everyone’s jets.
So if you’ve been thinking it’s time to sell, going early in 2022 could be a good strategy to cash in on the recent price jumps.
Three key indicators are already trending in a way that signals headwinds – time-on-market, auction clearance rates and sales prices. For example, industry researcher CoreLogic says auction clearance rates were 83% last October. Just before Christmas, they’d dropped to 63%.
So, what to do? Here are some ideas to help you focus your thinking.
Don’t overthink this
Trying to time the market for profit is a perilous pursuit. The fortunes of the property sector can swing around in a matter of a few short weeks. So, don’t exit the market and rent a place to wait for the crash. If you’re going to sell and buy, then get committed and see it through.
In your own time
Don’t panic yourself into a decision. The market’s current stability doesn’t necessitate that course of action. Make sure the timing of your sale and subsequent purchase is one that works for your personal circumstances and doesn’t throw the family, or your professional life, into chaos at the worst possible time because you’re chasing some ‘timing the market’ unicorn.
Prepare meticulously
Focus on what you can control – which is maximising the value of your current home before you sell. If you’re thinking of renovating ahead of a sale, bear in mind quality materials and tradespeople are in big demand and so it may take longer than you intend and cost more. We can guide you on the tasks that make a difference for prospective buyers and help you set a budget.
Be ready to pull the trigger
Don’t be lulled into a false sense of security when you bid for your next home and assume that because you’re selling it will all work out. Property is still a competitive business, and you should assume there’ll be rivals wanting to buy your next dream home. In that scenario, it’s essential to have your finances organised so you can act quickly and ideally avoid bridging finance.