Traditionally in the new year we see property prices increase on average 2-5% from the pricing we did before Christmas. We have ascertained that it’s created by a combination of factors: the downtime of holidays, sunny weather and general good cheer that get people thinking. On top of that, one of the most sought after commodities of our day is readily available and that is …TIME… time to think about what next?
This year, however we saw in some areas and price brackets a 5% – 10% increase in property prices over that period. The strength of the market and competition is unsettling buyers and causing a frenzy, as the fear of missing out takes it’s stronghold on the sensibilities of Sydneysiders. Post Easter holidays and Anzac Day though, it usually settles down again. For whatever reason the heady days of the first part of the year are left behind with the long summer evenings.
When we are looking back over sales in the winter months, often a common pattern emerges. There is always a spike in the first quarter of the calendar year, but it doesn’t always continue beyond April. In stronger real estate markets, when interest rates are up, the global economy is stable and there is a confidence in the air, we see the first quarter spike as simply providing a platform for steady growth throughout the rest of the year.
This year however things are a little different. Over 2012 there was less property available for sale, with listings down 30%-50% in some suburbs. In my 12 years in the business I had not seen it this slow. This lack of stock has created a Tsunami of hungry punters wanting their stake in Sydney real estate, especially in the blue chip areas. Throw in additional factors such as increased consumer confidence, low interest rates and a distinct lack of quality stock and you have a recipe for a massive spike in the market. Auction clearance rates have been consistently high this year and there appears to be no imminent slow down ahead.
As always though “buyers beware”! My feeling is that this is not necessarily a solid growth phase but a market that has all the right ingredients to produce a sellers market, and this too will change as one thing we have learnt to live with is market volatility.
When buying property you must take into consideration all facets. First and foremost, choose wisely, do your research on price, think ahead and have a plan. This means that when you do go for a property and buy it you can enjoy the fruits of your labour and not suffer buyers’ remorse. Always remember that if you have done your research and a property ends up selling to someone else for more than you are prepared to pay, you have not missed out: you are walking away from it – because you know better!
Published: February 2014
Please note: Good Deeds buyers tips are intended to be of a general nature. Please contact us for advice that is specific to your individual circumstances. You may also need to get advice from other professionals such as an accountant, mortgage broker, financial planner or solicitor.