Timing The Property Market: How To Know When To Sell
As we head into the 2017 selling season, auction clearance rates across Sydney’s east have already hit their traditional spring high.
If you’re planning to sell, one of the biggest questions is whether your market has hit its peak or still has room to move.
Here’s our analysis of recent market movements across the eastern suburbs with sellers in mind.
The supply issue: A new normal for the eastern suburbs?
While it’s never possible to be sure whether a particular real estate market is about to move up or down, supply is one of the most reliable predictors. While the last half of 2016 saw extremely low supply across Sydney’s east, so far 2017 has been slightly less challenging for buyers, as sellers have decided to make their move
Auction clearance rates are another factor to watch to measure supply and demand. As the 2017 auction season began, we initially saw reports that the Sydney market as a whole could be cooling but clearance rates are now back above 70% in Sydney overall. In the eastern suburbs clearance rates have recently topped 80%, suggesting the market is still tightly held and buyers remain highly motivated.
How an interest rate rise could impact the market
One factor that could end up boosting supply is an interest rate rise, which is looking more likely with the recent announcement of a 3.5 per cent cash rate. We saw a similar freeing up of the market during the GFC from 2008 – an experience that is still fresh in many people’s minds. With an interest rate rise we could also observe the following, particularly for properties above the $3 million mark:
- more days on market
- lower clearance rates
- downward pressure on prices.
Clearance rates will drop over summer
Even without an interest rate rise, the pattern of Sydney property sales we’ve witnessed over the past two decades shows a decrease in auction clearance rates over summer compared to the peak spring period. For those hoping to sell during this time, setting the right price expectations and marketing your property correctly will be even more important.
That said, there’s no need to be overly concerned about selling outside of the traditional season, especially in the consistently sought-after eastern suburbs. In fact, selling at the same time as other owners in your suburb may not be the right strategy as buyers could have more choice and therefore more bargaining power.
Different price range, different markets
As our 2017 market snapshot shows, Sydney’s east is divided into distinct markets not just by location but also in terms of price range. For properties over the $3 million mark, predicting the next market movement requires less focus on interest rates and more on other factors such as overseas buyer activity along with interest from downsizers or other buyers who are less dependent on mortgages.
Properties below $2.5 million have increased exposure to interest rate fluctuations. Higher rates mean buyers in this bracket will become more cautious and this could eventually put downward pressure on property prices overall. But once again, these fluctuations are far more likely to affect properties in other areas of Sydney than those in Sydney’s east.
For a closer look at how eastern suburbs real estate markets are evolving in 2017, download our complete market snapshot report.
To discuss your particular market and prepare for a successful sale, get in touch with our team.