In contrast nationally, house values dropped for the very first time in a while – down by 1% for the month of May. This stagnant growth could be explained by the increased supply – there are 6.2% more listings on the market when compared with June 2016. However the market is still 11.4% in front when compared to June 2016.
So although recent media reporting may entice you to think that property values are about to tank, I believe we are in a transition period to the next phase of the property cycle. Put simply, the buying frenzy seems to have dissipated, however properties are still selling.
Sure, some areas of Sydney that are investor hotspots with an abundance of vacant land will possibly experience a downturn, but the desire to live on the Northern Beaches will always bring demand. The only way we will see red across the board is if interest rates were to rise and they were put on hold once again this month by the RBA.
However it is interesting to note that many economists are now predicting that interest rates may drop once again later this year if the economy does not improve. It’s ironic that if this was to occur it will surely prolong the strong growth in property values as money to borrow becomes even cheaper.
Now that Winter has well and truly set in, there is a misconception that the selling season is over until Spring. However, this could not be further from the truth in this current market.
As many sellers follow this trend, it gives the home seller who goes against traditional thinking a huge advantage.
You see, when Spring comes around, everyone who has been holding off selling during winter all come onto the market at the same time, causing those huge Super Saturdays you see in the news every year with the number of properties on the market and going to auction increasing dramatically.
This can actually work against the home seller, as they will be competing with more homes on the market all at the same time giving buyers more choice. It then becomes simple economics - More supply will put downward pressure on home values.
By placing your home on the market in quieter winter times, this effect works to your advantage. There will always be buyers still looking to buy in winter, and with less to choose from, they all come to your doorstep and push the price upwards.
Once Spring has sprung your home becomes less isolated in the marketplace.
Thanks for reading,