The Market is Breaking… what happens now?
Some buyers are starting to move through now even though the market is still considered flat and actual sales are still very much down. We have had several of these flourishes where we sell several properties at once and think at last this is the end of the flat market then yes… you’ve guessed it the market just falls flat again. This is the yo-yo we have been on since 2009 and there seems to be no end in sight.
Will it get better?
It will once consumer confidence returns and currently consumer confidence is returning faster in the United States and in the UK than it is in Australia. On top of that we have yet another election— a federal one this time—and the recent interest rate cut has not made one iota of difference to the amount of buyers flowing through. So will yet another rate cut make the difference… probably not. Currently, Australians are not confident about anything and that’s why the whole real estate market is on hold. When people are confident and feel that things are going well they are ready to re-invest either their money or borrowed money into an investment and for Australians property has always been a major investment. There have always been lots of mums and dads who own a rental or two but at the moment Australians are more interested in paying off debt, getting rid of mortgages and never having to rely on banks again. Many got burnt in the GFC.
What does this mean to us as Sellers?
This gets back to the question of Stay or Go again. If you are not prepared to meet the market price — and you will certainly know when you are there because of the interest your property will create as it approaches the right price — then you should withdraw the property from the market and wait until the market improves so that you can achieve the price you want.
Who should Stay?
- Those Sellers who do not need to buy another property. If you have a weekender or a second property which is an investment then this is a bad time to sell unless you would like to re-invest in property somewhere else.
- Those who are not in a hurry to move and can wait the market out and are also moving to a cheaper property area i.e. the Wheatbelt, further East, or interstate to Queensland or Tasmania.
- Those who can afford to buy their block or house— they will be moving too now, while prices are low and also afford to wait until the market comes up before they actually move.
- Those who for personal reasons need a certain amount and do not have a choice.
Who should Go?
- Anyone who wants to buy a property at a good price in a more expensive area. The savings you will make by discounting your property here will be made up when you go out and become a cash buyer elsewhere and more expensive areas are going to go up far faster than a rural area such as Nannup.
- Those who are selling a fully set up house, sheds and block and want to buy a house and land package and start again. Prices are still great as project
builders compete for a smaller than usual amount of buyers.
- Those who want to buy a block in what was an expensive area such as Port Geographe where prices are still reasonable. You will barely feel the loss once you build and those areas come up again and if you don’t get out now you will run the risk of those areas rising quicker than Nannup and it is a well know fact the longer you stay on the market the more you have to discount even in the capital cities.