When Is The Right Time To Sell A Property?

With Spring now less than two weeks away, the question of when is the right time to sell a property is becoming a hot topic for property owners.

Spring has traditionally been a time when sellers choose to sell a home, taking advantage of a seasonal increase in both warmer weather and buyer activity.

We have seen over the past few years that a lack of properties coming to market has aided price growth during the period of falling interest rates and now underpinning prices as interest rates climb.

Giving advice on when is the right time to sell is difficult. For the most part, the decision to sell will come down to a property owner's individual circumstances. 

Having said that, understanding the various key fundamentals that drive property prices and listening to economists and property analysts' thoughts is a great starting point before making any decision.

With this in mind, our feature article this week comes from Andy Webb of Open Agent.

The article with the headline "Should I sell my house now or wait, 2023" looks at all the factors that influence property prices and allows the reader to make their own assessment on whether price rises or price falls may be on the horizon.

We have also added last week's report, the proposed "Future of Robina" masterplan. The "Future of Robina" plan is currently out for public feedback and debate and is attached below our feature article.

This week's feature article is below.

Should I sell my house now or wait? 2023

After a boom period in which Australian properties soared in value by 28.6 percent, 2022 presented a more challenging environment for sellers. Now in 2023, another momentum shift has seen prices accelerate rapidly once again. 

Interest rates climbed sharply and home values are mostly still below 2021's peak levels, yet July saw a fifth consecutive month of national price growth. Clearly, there's a lot to consider for anybody thinking about listing their home. 

Is it best to take advantage of the current conditions in what has become a seller's market? Or is there value in waiting to see how things unfold over the coming months?

Whether you choose to sell isn’t just about current market conditions, but also the urgency of your own personal circumstances. For some of us, we needed to upsize into a bigger property yesterday, while for others, waiting for the market to rise might be a good incentive to release more capital before retirement. 

Let’s explore the current real estate climate, the pros and cons of waiting versus selling now, and what economists believe is on the horizon for the remainder of 2023 and beyond.

The current state of the market

According to CoreLogic data, Australia's property downturn halted and reversed in the early months of 2023. Since then, monthly growth managed to return to the highest levels seen since late 2021.

Sydney and Melbourne both kickstarted the market recovery, and Sydney in particular has led the pack with gains of +7.6 per cent from its January low point. 

Brisbane and Adelaide are blazing ahead, with Adelaide hitting new all-time highs along with Perth. Hobart, Darwin and Canberra are holding relatively flatter but were still in positive territory for the July quarter. 

Regional markets are showing softer performance on the whole but are still on an upward trajectory. 

On an annual basis, units have broadly outperformed houses, a trend that could continue in 2023 as immigration boosts demand, investors capitalise on a tight rental market, and buyers shift their search due to reduced borrowing power and poor affordability. 

That said, the recent return of strong growth has been generally house-led. It remains to be seen whether that will become a new trend. 

It's critical to remember that price declines in 2022 came after a historic period of growth, and the vast majority of locations around Australia still have a substantially higher median price than pre-Covid.

Australian property market forecast

Interest rates have been the number one talking point since they began rising in May 2022, but the future is finally looking clearer. 

Since the RBA held off on hiking rates in July and August, three of the big four banks believe the cash rate will remain at the 4.10 per cent level set in June.

Big four banks' cash rate forecast 2023

All four banks expect rates to remain on pause until the latter half of 2024 when cuts would begin, helping to stimulate further growth. 

Again looking to the big banks, their latest forecasts have softened significantly from previously pessimistic standpoints, with a general sense that prices should end the year with solid gains.

Big banks' Australian property price forecast 2023

"Australia’s housing market has continued to outperform expectations, particularly with respect to prices," Westpac's Senior Economist Matthew Hassan explained.

"Westpac expects current momentum to be better sustained with prices rising 7 per cent over calendar 2023. Population drivers look to be slightly stronger and headwinds around interest rates, growth and labour market weakening are expected to be less significant."

Looking to this year's spring selling season, PropTrack Senior Economist Eleanor Creagh suggested that we could be in for more strong market conditions. 

~"Buyers may be comforted by the likely end of the tightening cycle, greater certainty around future borrowing costs, and continued low unemployment," she said.

"Seven months of price rises that have gathered traction across markets could also be drawing buyers off the sidelines."

What are the upsides in the current market? 

There has been a big momentum shift across Australia's property markets. How long the renewed strength lasts remains to be seen. 

On the selling front, listings have held exceptionally low since September 2022, and that shortage of available stock on the market has driven prices up as vendors experience less competition from other sellers. 

New listings finally got a boost in July, but CoreLogic's Head of Research, Tim Lawless, said that buyer demand was strong enough to absorb the fresh influx of stock. 

"With total stock levels still low and selling conditions reasonably strong, it may be the case that more homeowners are picking current market conditions as a good time to sell," he said.

With the risk of further rate hikes having lowered considerably, buyers and sellers should also be able to proceed with more confidence in the market. 

"For the housing sector, the decision to hold interest rates over the past two months is positive news," Mr Lawless said. 

"Consumer confidence and housing activity go hand in hand — generally, when sentiment is low, home sales are low and vice versa; so, any lift in sentiment is likely to be accompanied by a rise in active buyers and sellers."

Thinking more broadly, it's worth remembering that if you're selling and buying in the same market, any potential losses that may be sustained on either the buying or selling side are likely to be balanced out on the other side of the transaction.

What about investment properties? 

Current market conditions are a bit of a double-edged sword for property investors. 

On the one hand, an extremely tight rental market is providing incentives. SQM Research data shows national vacancy rates still around historic lows at just 1.3 per cent in July, while rental rates have soared nearly +20 per cent over the past 12 months. 

At the same time, interest rates rose a full +4 per cent in 13 months, driving mortgage repayments far higher. 

How the two forces play out largely depends on an investor's loan balance. Some investors are opting to sell up to avoid inflated repayments, while others with lower or nil balances may benefit from the current rental market dynamics.

Should I sell my house now or wait?

If you’re still on the fence about selling, we get it. It’s a huge decision that deserves all your careful consideration weighing up the advantages and disadvantages for either scenario. 

Even if the market feels uncertain, it’s important to remember that it’s all relative and the market doesn’t stop. There will always be properties being listed and buyers out there wanting to purchase a home. 

It's also crucial to recognise that conditions will vary from suburb to suburb, so it’s important to understand your own local market — and to do that, you really need to get granular. 

Whether your property is impacted by price gains or falls depends on many factors including location, property type, and whether your home falls into the higher or lower end of the market.

If you’re seriously considering selling your home, you need to do your research. As a first step, get a ball-park estimate of what your home might be worth by using a free online estimation tool.

Speaking to your agent is also one of the best ways to get a thorough understanding of how buyers are behaving in your suburb, what kinds of results are still being achieved, and what the best strategy could be for you to still get that dream sale result. 

At the very least, it’s helpful to hear what properties are selling for, what demand is currently like for homes like yours, and to get a no-obligation appraisal of what your home might sell for in the current market. A top agent who knows your market like the back of their hand will be able to help you along the journey.

Please see below Robina Master Plan Review

https://gchaveyoursay.com.au/robinareview