Whoosh! There goes that unit you had set your heart on! The speed with which properties are selling is increasing, reflecting the return of consumer confidence. According to figures from Australian Property Monitors, the average number of days on the market of a Sydney unit has dropped by 19 per cent in the months from March to June. That’s just 68 days.
And the trend is pretty much across the board with both units and houses in every capital city hanging around the market for a much shorter timeframe. If you look at the average days on the market for both units and houses then there has been a 15 per cent drop in the length of time they are on the market in Sydney, 11 per cent in Melbourne and 10 per cent in Brisbane.
Back in March properties, houses and units could be on the market for three or four months and there was little pressure for buyers to rush. But now it’s turning into a sellers market and demand is outstripping supply in most sectors of the market. Even the reality TV show Selling Houses Australia is touting for properties that are on the market more than three months without selling, perhaps reflecting that few are hanging around for that length of time.
Do Your Homework
Of course just because it is currently a seller’s market that doesn’t mean you have to buy just any old property because you fear you will miss out altogether. Matthew Bell, economist at APM says there will always be other properties to buy within your budget. Never forget that buying property is most likely the biggest investment you will make in your life so you need to be sensible and not let your heart rule your head.
Bell suggests that you work out the maximum price you are willing to pay and stick to it; research the property you are considering; and don’t overpay simply to get in now. As he cautions: “It will cost you more in the end if you have to exit the investment because you can’t afford the repayments.”
And there should always be time to do thorough research. While some properties may be snapped up in the day, the overall trend is still closer to the two-month mark. But in a bid to beat other buyers to a property, buying agent Patrick Bright of EPS Property Search suggests you do the groundwork first so that when you find a property, you can act quickly. “Get your finances pre-approved, select your solicitor to check the contract and get the name of the firm to do your pest or building inspections all beforehand,” says Bright.
While it is currently a seller’s market, the flood of property that traditionally comes up for sale in the spring could see the imbalance shift back towards more sellers than buyers. As a result Bright suggests that if you are upgrading, then now might well be the best time to sell while there is still a dearth of properties around which should translate to a speedier sale and a better price.
But not everybody agrees. Bell says APM does not see the market heading south going forward even after the removal of the first home owners’ bonus so there is no reason to sell just to take advantage of recent median price increases. Real estate is a very segmented market. For instance, first homes (mostly units) are going gangbusters with the first home owners grant bonus still a drawcard while some properties at the top end of the market are struggling a little more.
Indeed Cameron Kucher of RP Data says with the exception of the first home market, it is still more of a buyer’s market. But whether your particular segment is a buyer’s or a seller’s market, make sure you do your homework before you buy or sell.
- Sale times have dropped, Sydney units for example by 19 per cent
- Be prepared: organise finance, solicitor and pest inspections
- Don’t overpay just to get into the market