The Reserve Bank has indicated the possible announcement of two interest rate increases of 0.25 percent, the first of which may be as soon as next month.
The impact this will have on an already slow market is yet to be seen. If the rate increases go ahead, this may put more pressure on sellers to reduce prices even further.
However, the previous boom saw an unprecedented inflation on property values, so adjustments to date have only steered the market towards more realistic levels.
Houses will continue to open for inspection and the level of interest will be rated by the quantity of sales and at what price they sell.
A lot of the stock out there has been on the market since before Christmas.
It’s now a reality that properties are taking a lot longer to sell. Buyers know how long a property has been on the market, and they will tell you.
There appears to be a mind-set that if a property hasn’t sold within two months, there must be something wrong with it.
Another influencing factor is the price. Many buyers appear to be waiting for a clearance sale. They may be waiting a long time as the downturn we have been experiencing has well and truly levelled out. It’s a case of how serious you are in making that final decision.
It’s not going to get much better for buyers. If you see something you like, then go for it. Many make the mistake of looking for lengthy periods of time, without grasping a golden opportunity.
A lot of buyers believe if they keep looking they will find a property just as good, if not better. The end result is many of these buyers miss out.
All over Sydney, agents are reporting increased enquiries on properties after they have sold. A genuine buyer will make a purchase, then the agent’s phone rings hot. When a property sells, suddenly everyone wants it. If you are a serious buyer, don’t miss the boat.
Arthur Paschalidis, sales manager of Elders Stanmore, says, People are not differentiating between -˜perception’ and -˜reality’. The market could be a lot more buoyant than it is, but the media in particular, only focus on negative aspects.
Paschalidis recently sold a property that went for $6,000 above the asking price. With only one open inspection, three serious buyers were after it. In January, Paschalidis also sold a house in Stanmore for over one million dollars.
Elsewhere, a record sale price was achieved on Darley Street in Newtown, where the average cost for a property is around $600,000.
This sends a clear message to all buyers. If you are serious about buying, now is the time to bite the bullet.
Make sure you have your finances pre-approved. Make sure that you have written yourself a wish list and be prepared to cross off a few items as you go along the way.
You may want off-street parking and an internal laundry, but you may not get both. If you inspect a property you like, you may have to forsake one feature for another. Don’t make the mistake of waiting for your dream property with everything because, chances are, it may not come along.
Remarkably, some investors are slowly coming back to the market. One of the main reasons could be the reduction in prices. Moreover, there has been speculation that the investor’s Exit Tax may be eradicated in the March budget. This kind of impetus is just what the property market needs.
A level of competition between investors and owner-occupiers will see sales improve.
If the hibernating investors make a comeback, the procrastination of others will soon be gone. Paschalidis says, If rates go up, there will be more pressure for prices to come down and people will need to sell, regardless of the economic situation.
The governor of the Reserve Bank, Ian Macfarlane, believes that the previous boom in housing redirected investment away from major infrastructure into the housing sector, which he says is disproportionate.
Others would argue that housing is still a good long-term investment, whether you are an investor, or an owner-occupier.
Garry Rogl is senior property consultant with estate agents Planet Properties of Petersham.