CORRECTION, NOT A CRASH
We have all known for some time now that property prices have been falling. Economists and property market analysts predict modest declines in property prices to continue to fall over the coming 12 to 18 months. This is a necessary correction and unlikely to become a crash.
The property market boom was boosted by the historically low interest rates since the global financial and economic crisis a decade ago, median prices in Sydney have been growing at a rate that was very unsustainable. This was pushing home ownership beyond reach for many Australians and thus creating a bubble that would eventually burst.
The change in the market has come from the federal government through tightened prudential safeguards and restrictions on loans to property investors, including cutting out interest-only loans. The financial services royal commission is also probably helping moderate demand, as banks and clients anticipate legislative and regulatory changes to clean up the widespread wrongdoing being revealed.
Even the most pessimistic forecasts point to moderation, not a crash. If median prices in Sydney fell by a total of 10 per cent – thus far they are down much less than that – they would still be almost a third higher than they were two years ago.
Since peaking in December 2017, national house prices have given up 2 per cent and units are down 2.2 per cent.
Sydney leads the fall, with the city once at the core of Australia’s house price boom now giving up 4.5 per cent over the year – Sydney’s median house price now sits at $1.14 million.
If you are seeking to sell property you may be less than happy that median house prices are falling for the first time since 2012, but most will still gain a handsome return. Since 2012, Sydney’s house prices are up by 70 per cent.
Those who understand the change in the market will be the ones who benefit most. Unfortunately there are still sellers who think that their property is worth the 2017 prices. The facts are that property is like any other investment, property valuation moves in cycles of highs, lows and can stagnate.
FIND THE RIGHT AGENT
We at Paramount Real Estate have seen it all in relation to the property market over the past 40 plus years. This is where you want an agent with those years of experience who can assess your situation giving you a realistic outcome in the current market. We take a real interest in you and your home and/or investment property as this is usually your biggest asset.
So many agents will tell you what you want to hear just to sign you up only to tell you weeks later something different. The reality is the market will dictate what a buyer is prepared to pay. With our years of experience, so far we have had many happy sellers with a better outcome than expected. Our strong negotiation skills have a proven track record in these times and we will tell you the truth about the price - which might hurt - and the truth about time on the market. There is a lot more that goes on behind the scenes in this kind of current property market but that’s what you pay a good agent for.
Don’t feel like you have missed the boat, there are many positive reasons that you can still have a successful sale. Call us for your free appraisal on 9579 4044. We can sell anything, anywhere in any kind of market!