The property market enjoyed a solid start for 2012! With interest rates falling by 50 basis points at the end of 2011 and despite a number of the banks choosing to increase their rates which the RBA kept on hold at each of their February, March & April meetings.
We are seeing buyers currently operating differently at various price points & property types.
Properties in the early Millions & below are still tracking quite well with balanced supply & demand. As the price levels escalate the balance of demand currently moves back to the buyers favour.
When comparing properties within the same price points we are seeing a buyer preference to securing properties that they don’t need to do any work, compared to superior location needing upgrading over time.
Based on the current signals being displayed by the market on the Northern Beaches it appears that there should be the typical trend of solid selling conditions extending into May/June and we would expect the traditional seasonal factors to follow with the typical gentle slowing of the market over winter & a noticeable spike in sales again in Spring.
If you are considering moving – those who are trading up to a more expensive home and will pay more for their next home than they will get for the one they are selling – actually do better in the current market than when the market is on a bull run with prices moving up.
The fact that they are spending more money on their purchase gives them an opportunity to make money on the transaction. If the reason you think it’s ‘not a good time to sell’ is because you ‘will not get a good enough price’ for your home, then the logical next step is to realise that if the market prevents you from getting the price you want, it will also affect the sellers of the property you are trading up to – providing you with a net gain
For example if you get $1,350,000 for your home which has been valued at $1,500,000, you may feel you are ‘losing’ $150,000 or around 10% of the value of your asset, but if you buy another home valued at $2,000,000 in the same market, the owners of that home will also ‘lose’ 10%, as you will naturally not be paying more than the current market value. In paying 10% less you will pay $1,800,000, ‘saving’ $200,000 – thereby ‘making’ $50,000 on the transaction; in other words you ‘saved’ on the next transaction more than you ‘lost’ on the sale of your current home.
There are other advantages to trading up in the current market. Due to the days on the market being longer than in a sellers’ market, once you have sold your property, you can take your time choosing your next purchase without having to watch the gap between the price you got for your original property and the price you have to pay for their next one increasing by the day.
The inverse of this applies to those who are looking to sell their current home for more than what they are looking to spend on their next home. However sitting down with a financial advisor to discuss the long term investment opportunities of what can be done with the balance not spent on the next home can still mean that its worthwhile selling in the current market & moving on with life.
As always, the current market trends present opportunities for both buyers and sellers – if you would like to develop a greater understanding of what is happening in the market at your specific price point, feel free to give us a call on 9948 7080.
Wishing you all the best in achieving your property goals,
Tim Wirth & the Team at R&W Seaforth/Balgowlah.
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To keep an eye on this week’s reported Seaforth real estate, Clontarf real estate, Balgowlah real estate, Balgowlah Heights real estate and North Balgowlah real estate Click Here*
*Sales are as reported by Australian Property monitors