So the spring season is underway with our first Saturday auctions for September this weekend.
While market demand in a booming Sydney has eased slightly in winter, I am expecting a very strong spring season with more stock likely to ramp up activity over the next three months.
Over the past four weeks, auction clearance rates in Sydney have returned to above 80% after drifting down into the 70% bracket during winter. Clearance rates are among the most important forward indicators of a market because they tell us about consumer sentiment in real time. Right now, it looks like we’re in for a buoyant season.
Vendors are listing with supreme confidence right now after 18 months of excellent growth. There are plenty of buyers around waiting for those new purchasing options to come online after the usual reduction in supply over the colder months, so competition should be pretty intense.
The Sydney market has at least two years left in its growth cycle, perhaps three, before we see a real plateauing. Monthly price growth statistics will surge in some months and only creep forward in other months but that’s how growth cycles work.
A genuine plateau is still quite a way off and if the spring market is as hot as we think it will be, we’ll see a material change in median prices by Christmas and this might settle buyers down for 2015, thereby making growth more sustainable over 2015/16.
We don’t want hyper strong growth in Sydney again next year – when that happens over too long a period, there is inevitably pain at the end. I am hopeful of 5-10% growth over the next couple of years following 15% growth over the 12 months to August this year.
As we enter this busy selling period, I have a few tips to offer both buyers and sellers to help them get ahead this spring.
- Register your details with every local agency, who will add you to their ‘database’. Agencies often send out e-alerts on new listings to their database clients before the property is publicly advertised. This gives you the chance to swoop on an ideal property or at least see it before everyone else does
- If you’re interested in a property, let the agent know – especially if it’s going to auction. There are a lot of properties selling prior these days and that process can happen very quickly in hot markets, so agents need to know if you’re keen so they can include you in any pre-auction sale negotiations
- Be decisive. Work out what you want and what you are willing to compromise on and make an offer when you see a property that suits
- If you’re nervous about buying in such a strong market, seek help from a buyers’ agent. Many buyers’ agents offer a negotiate-only service, so you can contact them when you’ve found the property yourself and ask them to assist with making offers and negotiating or bidding on your behalf.
- The most important thing you can do to ensure the best sale price possible is choose your agent carefully. Some sellers think their choice of agent isn’t too big a deal in hot markets because the property “will sell itself anyway”, so they go with the agent offering the cheapest fee. The truth is, you get what you pay for. Any agent can sell your home right now but it takes an experienced professional to negotiate a truly premium price. These are the agents selling properties for tens if not hundreds of thousands of dollars above reserve right now – what would that sort of money mean to you? Choose wisely.
- Invest in good quality marketing and hire a stylist if you need help presenting your home in its best light (your agent should be able to recommend a stylist)
- Let your agent guide you on price. Don’t let your property go to market with a price guide well above what other properties similar to yours are selling for. Price it in line with market conditions and let demand and your agent’s negotiating skills do the rest
- Consider auction, even if you feel nervous about it. Auction is the best way to tease out the highest possible price, especially in strong market conditions like we have in Sydney today.
For all involved, this spring season is going to be fun. Sydney will lead the way and I’m tipping some good movement in Brisbane too. That market is lapping at the edge of a boom; it just hasn’t broken through yet. Maybe spring will be the catalyst.
Good luck out there!
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