Property owners thinking of selling in the next 12 months should put their home on the market now in order to cash-in on recent growth before buyers start seeking more discounts in the spring selling season, one expert warns.
The comment comes as the Real Estate Institute of Victoria said over the weekend a record 18,000 properties have been put up for auction so far this year, with sellers keen to cash in on the strong price growth in Melbourne.
But SQM Research founder Louis Christopher says sellers who are thinking of putting their properties on the market should do so now.
Growth is starting to trail off, according to the latest figures from agencies including RP Data and Australian Property Monitors, and if you want the most for your money now is the time to sell.
“It does depend on personal circumstances, but if I had to sell in the next 12 months then I would be considering selling now,” he says.
“There have been many sellers trying to cash in this year, but I think the boat really left earlier this year and since then buyer demand has really dropped off. I still think it’s going to continue dropping off.”
Christopher expects listings to increase over the next six months even as buyer demand backs off, resulting in a flat market with very little price growth, if any. He points to the recent RP Data figures which showed prices dropped by 0.7% across the country in June.
However, Real Estate Institute of Australia president David Airey says there are too many factors weighing into the decision to sell a property, and most of those decisions relate to family circumstances rather than a desire for cash.
“Death, divorce and debt are the main reasons behind selling a house. For those who have the luxury of decision-making, the market isn’t bad, it’s just not growing. If you’re selling now, or waiting, I think people are taking a punt either way.”
“It just depends on a lot of things, there is really no rationale here.”
Meanwhile, auction results have continued to remain at relatively low levels for the year, but the Real Estate Industry of Victoria said in a statement the result indicates rates have begun to stabilise.
“The clearance rate for this weekend’s auctions was 68%, a small increase from last weekend but largely in line with results this winter. Since the start of winter the clearance rate has been 70% or higher twice, a remarkable contrast to summer and autumn when it was never lower than 73% and frequently in the 80s.”
Christopher agrees, saying that “clearance rates over the last four weeks have steadied, and I think that will be the case heading into Spring”.
A total of 535 properties were put up for auction, with 364 selling. At this time last year, 504 properties were on the market and 85% sold. The REIV said only 300 properties will be up for sale next week due to the federal election.
Sydney managed to record a 67% clearance rate, with 170 properties selling out of a total of 238 on the market. Total sales value came to $146 million.
In Brisbane only seven properties sold out of a possible 26, with total sales coming to $2.4 million, while in Adelaide only six properties were sold out of a possible 11%, resulting in a clearance rate of 55% and total sales of $4 million.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
