There are usually a great many reasons leading homeowners to decide to put their property on the market. Some prospective sellers decide to sell because of relocation due to a job change, while others decide to invest in a bigger property once their family starts to expand. In times of economic hardship, like we are experiencing now due to the pandemic, mortgage holders may consider downscaling their property or opting to rent when they struggle to keep up with home loan repayments.
Reasons to Consider Selling Your Home Now
Whatever the reason for your decision to sell, you may feel wary to do so in the midst of all the other crises that are currently playing out. With this being said, many Australian homeowners don’t realise that the local property market is currently booming. According to data released by CoreLogic, a financial and consumer information company that keeps a keen eye on global property trends, the national property market is on the up and up, with current data suggesting that property prices will keep on steadily rising in the foreseeable future.
In layman’s terms, this means that homes are currently selling for higher-than-expected prices, and are doing so despite of the financial challenges and other consequences caused by the outbreak of COVID-19.
For home sellers, this should signal that it is, indeed, a good time to consider putting their homes on the market if they had already planned to do so.
If you are a homeowner who has been considering taking the leap, there are plenty of reasons to put these plans into motion. With a real estate agent by your side who is qualified, and has ample experience of selling property in the city or suburb where your home is located, there is good reason to believe that you may actually be in a position to make significant profits on the sale of your home, should you decide to jump into the property pool now.
Lower than average listings means that sellers currently face less competition
Real estate agents like to distinguish between what is commonly known as buyer’s and seller’s markets. As the terms suggest, a buyer’s market will generally favour the buyer, while seller’s markets can potentially hold greater benefits for sellers. According to Investopedia, buyer’s and seller’s markets are greatly reliant on what supply and demand dictates at any given moment. In a buyer’s market, for example, the supply of property that is available in the market is more than the amount of buyers that are looking to invest in said property, while a seller’s market will see less supply available, opening the door to negotiating higher prices.
Insofar as these terms relate to the Australian property market at the moment, current market conditions favour sellers, as the average amount of listings is lower than it would normally be. This means that sellers stand to make greater profits, but it also means there will be less comparable properties that their home competes with on the open market.
As comparable properties, or comps, have a huge influence on the price a property ultimately fetches, this factor has a definite hand in how long a home will spend on the market, and on how it will perform when it is eventually sold.
When demand from buyers is high, but the supply doesn’t quite meet it, there is a far greater chance of selling a home quickly, and at a price that matches the seller’s expectations. While circumstances are favourable, selling a property means taking advantage of the current windfalls. If you’ve been thinking of holding out on selling until the storm has passed and things have quieted down, keep in mind that there is no way to predict exactly what the so-called “new normal” will be, and how the property market may be affected by this.
Buyer Demand is High
The increase in demand from buyers is unexpected, to say the least, as one would think that the apparent financial turmoil cause by COVID-19 would lead to consumers holding on to what they have. However, real estate agencies across the country are actually seeing the increase in demand mentioned earlier play out in reality, with some of the country’s largest real estate listing websites also seeing unprecedented interest from property buyers at the moment, as has been the case since the beginning of the year.
High buyer demand means that your property is likely to attract the attention of a greater amount of potential buyers than it would have a year or two ago. This is something that can benefit sellers in more ways than one. Not only does demand that outweighs the supply that is available mean less competition – it also means that sellers will, in all probability, be able to fetch higher prices. The reasoning behind this is very simple: if there is more than one buyer that is interested in purchasing your property, there’s a greater chance of prospective buyers engaging in a bidding war of sorts to secure the sale. This means that sellers may well be able to sell for unexpectedly high prices, depending on where they are selling, what state the property they are selling is in, and how many comparable properties it is competing with.
Consumer Sentiment is rising
When we talk about consumer sentiment, we are referring to “a statistical measurement and economic indicator of the overall health of the economy as determined by consumer opinion”. When consumer sentiment is high, it means that the population of a country feels optimistic about the future, and their spending habits reflect this, while lower consumer sentiment will see people take a more cautionary approach, making fewer discretionary purchases of non-essential goods and services, and saving money. Consumer sentiment is measured and recorded in indexes, with index scores that are above 100 indicating that optimists outweigh pessimists.
Contrary to what you might have been thinking, based on conversations around the barbeque, consumer sentiment is actually quite high, and is rising as we speak. According to the latest figures released by Trading Economics, Australia’s consumer confidence was on the rise in March, and standing at 111.8, up from 109.1 points in February.
When consumer confidence is up, markets also see an uptick, as we are currently witnessing with the Australian real estate sector. Confidence in the future is a great way to gauge what interest there is likely to be in homes that are on the market, and if currents trends are any indication, the property market will probably retain its resilience – that is good news for sellers!
All-Time Low Interest Rates
Of course, interest rates are especially noteworthy when it comes to the sale of property. Because prospective buyers will be entering long-term mortgage agreements when they decide to invest in a particular property, high interest rates can certainly sway their decision.
Luckily for sellers (and for buyers) interest rates in Australia are at all-time lows. Figures from the Reserve Bank of Australia reveal that cash rates – which are closely tied to interest rates – are at historic lows, with the current cash rate measuring just 0.10%. Philip Lowe, the governor of Australia’s central bank, has said that the expectation is that cash and interest rates will probably remain at historically low levels until “at least 2024”.
The result of these low rates has been most acutely seen in the local property market, and is the reason for a rise in overall property prices. As buyers search for a property they can see themselves living in for the next decade or two, lower interest rates will certainly influence their decision to purchase or not, even if prices are a little higher than they used to be.
There are many good reasons to sell your property in Australia today. For one, there aren’t currently as many properties being listed as there were a year or so ago, paving the way for sellers to list their own homes without having to compete with loads of comparable properties in the same city or suburb.
Add to this the fact that demand from buyers currently outweighs the amount of properties doing the rounds in the markets, and market conditions certainly seem to be favouring sellers, even if they are listing their properties at prices that are higher than normal. This rise in the prices of homes is connected to historically low cash and interest rates, which, by all indications, will not rise before 2024.
While it may not seem to be the case, consumer sentiment is also on the rise, leading to more purchasing across the board.
If there’s ever been a time to sell your home, it certainly seems to be now. Do you have a real estate agent you can trust by your side to help you navigate the path to selling your home quickly and at a good price? Perfect Agent recommends agents that perfectly fit the bill – contact us today!