How winter is shaping up for the Australian Property Market
How is winter shaping up for the Australian Property Market?
As winter approaches the property market is continuing to slowdown, with values falling 0.1 per cent in the month of April.
This number is even more significant when you look solely at combined capital cities. Corelogic data shows that on an annual basis, the combined capitals recorded the first decline in dwelling values since late 2012. Darwin has seen an -7.7 per cent decrease in values over the last twelve months which is followed by Sydney at -3.3 per cent.
In contrast, regional areas continue to be strong performers, with regional areas up 0.4 per cent in April and 7.7 per cent year-on-year.
While the country is experiencing ‘markets within markets’, with many areas still recording strong growth numbers, a slowdown is likely underway and may be compounded when winter hits.
Winter has traditionally not been an active real market for many reasons but in recent years, we have witnessed little seasonality in real estate with one season seemingly blending into the next. This situation often saw many agents busy all year round and many sellers happy to take the plunge in the cooler months.
I suspect this phenomenon will well and truly end this year with many sellers choosing not to brave the cold in the face of moderating prices but opt to showcase and sell during the typically busy spring selling season.
However, those people considering selling right now might be surprised by some potential benefits of selling in winter.
Here are my top three potential advantages of selling this winter:
One of the biggest challenges of selling a property is competing against rival properties in and around the market in question. This situation can often lead to price reductions and uncompleted sales.
In winter this year, less listings may mean your property has a chance to really stand out. There will still be buyers around but perhaps less competition working against you.
However, this shouldn’t mean you should immediately over price your property and expect that it will just sell yourself. And this is where another advantage may come into play – a focused agent.
An environment which sees low listing levels (typical of winter) may see many agents actively compete for your business and also go the extra mile to help you attract the best price for your property. They may have a reduced client load this season which can equate to your sale having one hundred per cent of their attention.
While most good agents do this already, in busier months they may be juggling many listings at the one time. This might not be the case this winter which has the potential to benefit a vendor enormously.
First Home Buyer activity is increasing
If you are contemplating a sale this winter, it might be worth noting that first home buyers are becoming increasingly active in the market.
ABS Data shows that the number of loans to first home buyers rose to a five-year high in November, 2017, to account for 18 per cent of total owner-occupied home borrowings.
In the last quarter of 2017, NAB analysis suggested that first home buyers accounted for almost two in five sales in new housing markets and around one in three in established markets.
If you intend to sell a property that may be perfect for first home buyers due to its price point, location or property type – consider marketing it as such, while working to ensure you property will be attractive to first home buyers. Consider installing modern technologies, such as Smart Home systems, and ensuring the property is safe for small children.
While it is often dangerous to look to ‘time’ the market, there may be some advantages to selling this winter depending in what market you are in. A good first step would be to review your local market (including listing and sales numbers) and speak to your local Century 21 agent to help decide whether selling this winter may hold more pros than cons for your sale.
Published: Tuesday, May 15, 2018