While we’re not quite popping the champagne corks, we are observing a noticeable change in the real estate market since we last communicated with you. Although far from peaking, the local market has definitely adopted a more positive orbit, and things are building. There are more listings and more opportunities to buy and to sell.
This time last year the market was chaotic. Now, we have a slow and steady situation with genuine buyers and good opportunities. Our primary piece of advice for anyone thinking of buying is to get in now and take advantage of the record low interest rates and the slower market.
The market is presently being helped by the record-breaking low interest rates, which are currently doing an extended limbo dance (how low can you go?) at just one per cent; coupled with a marginal reduction in property prices with both factors attracting buyers back into the market.
Investors have been quick to capitalise on this aspect, knowing that investing in bricks and mortar is a far more attractive and less dusty option than leaving their hard earned cash in the bank.
The big question is … have we reached the bottom of the market? It’s always so hard to speculate on this question as it’s nearly impossible to get it right. But signs are there that perhaps we have reached the optimum buying time. We’re in a perfect storm of low interest rates and value prices, and changes to the borrowing criteria by APRA (see the APRA story in the adjacent column for more details) are providing more flexibility.
Advice that does resonate is for sellers not to expect a dramatic shift upwards in price. What’s more likely is a gradual shift upwards over time.
We are also seeing more auctions at present as auctions are a great mechanism to test buyer expectations and gauge where their level of interest lies. Auctions are also pretty bang on trend during the Spring real estate period as more properties come on the market. We are seeing some great results with some individual properties still selling beyond expectation.
So, what’s selling?
It may only be a temporary trend, but we are currently seeing a lot of local people participating in the real estate market. Typically, these buyers are looking for a fair priced property that they can add value to. This is in direct contrast to last year when people, often relocating ex-Sydneysiders, were primarily looking for completely finished properties in prime locations with nothing left to do. Locals are stepping up and are ready to move on the right priced property – particularly in the Ballina market.
We’re also seeing a high proportion of first home buyers currently looking, as well as investors searching for the right property.
Interest in land continues, with many people eager to build a home that is perfectly tailored to their family and their needs. In turn, building costs are trending upwards, and we can speculate that a shortage in local trades has contributed as many builders are booked up well into next year. Project homes are significantly cheaper, but the downside is less choice and opportunity to tailor the build to a particular site.