Australians are passionate about their homes and enjoy the confidence that comes with owning real estate.
And there has been a lot for property owners to love over the past two years with strong price growth, particularly in Sydney and Melbourne, delivering lottery-like returns rarely seen.
The thrill of watching suburb records being broken almost weekly has been exciting but we all knew that such momentum just couldn’t continue indefinitely.
Since the start of spring, the market has entered a period of adjustment with an influx of listings causing price growth to steady.
Sydney price growth has ‘slowed’ to around three percent in the quarter – put into perspective – a figure that other cities would love to achieve in a year.
Overall, we see the current conditions as a positive with increased listings turning into high volume of sales, coupled with a strengthening regional market.
Supply may have increased but the fact is demand is still there. As we all know every property has a buyer, it is just a function of price, so managing vendor price expectation at this time is key.
We are anticipating a soft landing as we ease back into a more normal buyers-market.
But media sensationalism has painted a very confusing picture of just what is happening out there.
People are reading about extraordinary sales and the next day they are being confronted by much different headlines of an unstable marketplace.
Property is not a day-by-day proposition – it is and has always been a long-term investment.
As more stock becomes available we expect prices to level but quality will continue to stand out.
Buyers are more educated than ever before. They do their research and have the information at their fingertips, so it is harder to get an out of line sale.
They know what the property next door or a comparable home has fetched, which makes what we have seen in the past few years a more `truer’ housing cycle than ever before.
One of the challenges during the peak of the market was homeowners were fearful of selling before buying, which led to an overall reduction in the number of properties for sale. This has, or is now changing, and is providing home owners with more choice when looking for their next property and, inturn, boosting their confidence.
We expect this will keep sales active, enabling people to buy and sell within the same market.
Regional areas are feeding off the strength of the Sydney market and our network is seeing strong results. Generally country areas lag six to twelve months behind the capitals and we are seeing improving buyer demand in those centres.
The number of real estate agents can also triple during a market high as people try to make the most of lucrative sales opportunities.
But history has shown this number will fall as we come back to normal conditions. And there will be a flight to quality. Buyers will need a good, experienced agent to represent them to sellers and to deliver a great selling experience.
CEO – LJ Hooker
Disclaimer: This article contains general information. Before you make any financial or investment decision you should seek professional advice to take into account your individual objectives, financial situation and individual needs.