As Glenn Frey famously sang in 1984, The heat is on! Summer has arrived and so has the real estate action. This action is building from a very hotly contested Spring market, with interest only continuing to grow.
Out of towners are continuing to dominate the very top end of the market, and this top tier is yielding some jaw dropping prices. Outsiders have the cash and the means to cherry pick the very best properties in our market.
Of course, no-one wants to leave the area, so we have a situation where new people are moving here and very few people are moving away. It creates a high demand / low supply market where those properties that are available are fiercely contested.
While out of towners are dominating the top end; there remains plenty of locals combined with people relocating to our region who are robustly contesting everything else.
In many ways, it’s counter intuitive to have a strong market like this at the end of a year that we will never forget; but we can thank COVID for its part in this situation. Yes, as we reported in our last newsletter, there are plenty of people moving here from the cities who wish to escape the limitations caused by lockdowns. Coupled with this, there’s also the working from home phenomenon which is creating a workplace paradigm shift such as we haven’t seen in decades. The pandemic has proven life changing for many of us and has caused a rethink in values and priorities. Quality of life is featuring large in the decision making of many home buyers; and people are firmly looking beyond a pay rise or a promotion towards a much bigger picture. What was important before is not necessarily important now.
We can only speculate on how long this high price / high demand situation will last? Will it be all over in a couple of months; or is this the start of a new wave of sea-change internal immigration that may flow on for years? When do we reach the top of the market? We are in unchartered waters. What we can say is people from Sydney and Melbourne see value in our current prices; whereas locals feel the prices are a little steep. It’s an interesting difference in perspective.
Prices are rising! While all properties across the board are experiencing a price rise, the degree of rise is variable. The prestige market is off the chart. Small acreage is highly sought after, as is the hinterland. And anything on the coast with a view is gold. People are valuing space and privacy. However everything is selling!
All markets on the north coast are experiencing the surge. Both coast and hinterland are highly desirable. It’s also really pleasing to see that the surge is also making it into the inland regions, with towns like Dubbo and Wagga experiencing growth. Perhaps in time it will show as a generational change in population?
A downside for people considering selling in the current market is the worry that they may not be able to find or afford a replacement home. Whilst people are confident in their ability to sell their home for a good price, their next concern is finding somewhere else to live in a market with low supply and stiff competition. This is compounded by the lack of rentals at present, which are a traditional fallback when a replacement home cannot be found within the timeframe. These are small town centric issues which do not affect our city cousins, but they do affect the overall fluidity of our market.
We mentioned in a former issue about selling ‘off-market’. An off-market sale is when a property is sold without public advertisement, usually to a buyer already on a database. Whilst there is a time and place for this strategy, we strongly advise people not to sell off-market in this current climate as you will potentially lose out on the best deal. Best practice right now is to put your house up for auction and let the market determine what your property is worth. Sales are maximised when properties have been given proper market exposure. Chances are, there will be multiple interested parties and this will push up the price. Its simple economics, but we are seeing this result play out daily. Read more in my Summer 2020 newsletter . . .