Sell High And Buy Low
Home owners who sell an entry level investment or main residence below $1.2 million can achieve a premium sale price on their current property and trade up for something better while mid-market conditions are flagging.
Sydney real estate price growth has slowed to 1.2%1 and investors, agents, market analysts and economists are looking to past market conditions to predict future developments. This is usually a sound strategy to stay ahead of the game, however, not every change in the market follows the trends of the past.
The problem with looking back is that in the last 45 years, there have been only 6 downturns of 5% or more in Australia2 and when the GFC hit in 2008, premium property prices declined while the middle market held on. This time around, middle market properties between $1.2 million and $1.7 million have started to slow while both premium and entry level properties continue to fire ahead.
Several factors could be driving the mid-market decline. First, mid-range owners could be selling as a result of being nervous about overextending themselves now that mortgage rates have started to rise. Alternatively, there could just be fewer mid-range buyers as finance restrictions continue to be an issue. While REA Group Chief Economist, Nerida Conisbee3, has highlighted this as a concern, it isn’t an issue for those who own property valued below $1.2 million that want to trade up – it’s a huge opportunity.
Purchasers who are in secure employment, managing their current mortgage comfortably and looking to sell their entry level investment to trade up are well placed to negotiate fantastic savings on their next property right now but this window of opportunity won’t last long. We can expect the middle market to improve once downward pressure from the financial services royal commission is relieved at the end of the year and once the benefits of NSW’s growing economy, currently only benefitting high-income earners, flow on to everyone else.
Whether you’ve already listed your current home or are just thinking about trading up, begin with the steps to the Buying Process4 and, when you’re ready, engage Hello Haus property agents to secure your mid-market property at the best possible price and conditions. Our experienced, licensed real estate agents’ act on your behalf to ensure that you have the advantage in all negotiations. We’re experts in saving you money.
1. Scutt, D. (2018). A history of Australian housing market downturns, in one chart. [online] Business Insider Australia. Available at: https://www.businessinsider.com.au/australia-housing-market-historic-price-cycles-2018-4 [Accessed 24 Sep. 2018].
2. Scutt, D. (2018). A history of Australian housing market downturns, in one chart. [online] Business Insider Australia. Available at: https://www.businessinsider.com.au/australia-housing-market-historic-price-cycles-2018-4 [Accessed 24 Sep. 2018].
3. Theaustralian.com.au. (2018). Subscribe to The Australian | Newspaper home delivery, website, iPad, iPhone & Android apps. [online] Available at: https://www.theaustralian.com.au/business/property/local-government-price-moves-show-which-buyers-are-being-hit/news-story/17130ced16e0d0021d556f4c0b7e7774 [Accessed 24 Sep. 2018].