3 tips for selling before the end of the year
A lot can happen in 12 months and as we draw close to the end of the year, it appears we are in quite a different marketplace compared to where we were a year ago.
Even at the beginning of the year, the market remained relatively bullish in many areas however many pundits, including myself, forecasted that a change was on the horizon. I believe the changing market dynamics we are seeing indicates a market that is levelling, rather than one that is spiraling into downwards territory as some seem to think.
According to CoreLogic’s recent Quarterly Housing & Economic Review, values are continuing to rise, albeit at a slower rate. Over the third quarter of 2017, national dwelling values increased by 0.5%, which was their slowest quarterly rate of growth since the June 2016 quarter. Values saw an 8% increase nationally over the year, which is a very healthy result.
What remains consistent is that no two markets are really the same across Australia.
It is interesting to see that while the Sydney and Melbourne markets have often competed side by side, there is a growing disparity between the two. Sydney dwelling values increased at a slower rate of 0.2% over the September 2017 quarter, compared to a 2% increase in Melbourne dwelling values, according to CoreLogic.
Auction clearance rates are lower than this time last year, however the exception to this is in Perth and Brisbane where their performance has improved.
We are continuing to see conditions pick up in ‘opportunity markets’, which are areas that people often talk negatively about, however ones that I believe can hold strong prospects for investors. With more stock available, you may have a better chance to negotiate a good price for yourself in such places.
This is supported by CoreLogic data that reported typically smaller auction markets have experienced an uplift in clearance rates over the September quarter. Tasmania recorded the largest increase over the September quarter, up 13.2% to 65.6%, followed by Perth, up 6.3% to 43.4%, while Canberra increased by 2.8% to 71.1%.
Vacancy rates are at all-time lows in many places. Melbourne is sitting at 0.83%, and Sydney at 1.64%. We continue to see declines in Perth’s vacancy rates, down to 7.35% from over 10 which is a significant improvement in a market that has long been suffering.
We are seeing increases in listings leading into the end of the year. This could be for a variety of reasons, with people wanting to complete transactions before the holiday season or perhaps in part due to an influx of vendors who were holding out but now believe the best time to sell has passed, and are trying to get out of the market while they can.
In light of these changing conditions, I have three tips that people may wish to consider if planning to sell property before the end of the year.
1. Buy in the same market
Firstly, I believe those wishing to sell in this market should also look to be buying in this market. I believe this will be important as there is a risk that sellers could be priced out of the market if they sit on the sidelines for too long. This also may be an easier prospect than in recent times, with more options available.
2. Consider private treaty sales
I encourage vendors to consider private treaty over auction in areas where stock levels are rising. More property on the market takes the valuable competition aspects out of an auction sale and diminishes the benefits that would be attracted when bidders are enticed to keenly compete.
Whilst it may not suit all circumstances, weighing up the benefits of a private treaty for your situation may help to avoid some of the costs associated with auctions. In doing so, you may be able to take more time to consider offers and negotiate the best possible outcome for your property.
3. Choose your agent wisely
With more stock on the market, some agents may appear to be very active as they have numerous property listings and ‘for sale’ signs dotted down the street. However, it is important to look at how many of these signs display ‘sold’ stickers, as this will indicate the agents who can drive a listing to a completed sale.
It may be worth considering successful agents with more limited listings, as this may mean you do not have to compete for their attention.
I also encourage prospective vendors to remember the value of picking up the phone and speaking to an agent, or heading into your local office for a chat and a coffee. It is easy in this day and age to hit reply on an email or rely on digital methods of communicating, but a face-to-face chat can make all the difference in building strong relationships. This may in turn help to clearly establish your property goals and ensure you have the right agent for your needs.