We’ve all seen the recent headlines about where the real estate market is heading in Sydney, and some people are quick to draw similar comparisons here. And while it is true that the north coast market has slowed a little, there remains movement and opportunity.
Real estate markets are a curiosity, and the pivot point between demand highs and lows is always quick when it happens. Just six short months ago we had a situation of great demand and very low supply. Then in June 2018, everything changed.
Right now, we are observing that prices have fallen marginally from earlier in the year, and this is creating opportunities for people to enter the market and secure a home. And while it is true that there are less properties on the market than at the beginning of Spring, this is also typical of this time of year.
Properties are taking a little longer to sell at present, with an average time on the market of 4-6 weeks, and the sense of urgency that we encountered at the beginning of the year has dropped away. Fallout from the Banking Royal Commission has seen finance approval taking longer, where banks have really tightened up the lending process. Loan paperwork is now much more onerous than it used to be, with elements such as a HEX debt and monthly Netflix accounts now forming a part of the big picture. And while we certainly applaud the creation of a system that is more honest and transparent, when banks tighten up lending criteria they hand out less loans, and this then has a direct effect on property demand.
When the hype drops out of a market, many would-be sellers take a sabbatical and delay their planned sale while they wait for the market to pick up again. And likewise, many buyers take a ‘wait and see’ approach and delay their entry to the market while they speculate on where things are going.
One of the important things to remember with real estate is that while the market continues to ebb and flow, people will always need to buy or sell property, so regardless of how strong or steady the market is, there is always some level of activity.
And we are fortunate to live in a growing area where there is always demand, particularly for well finished, well positioned quality homes ready to move in to.
In times gone by, people were not so concerned about the market in relation to buying and selling; they just bought and lived in a house. Nowadays, it’s a different story. People are more educated about the state of the market, and more calculated about when to buy and sell. They see the family home as vehicles for wealth creation and some people even have exit strategies in place when they purchase.
In this current transitional market, we are seeing some sellers with inflated price expectations based on sales from the highs in the market earlier in the year. Sellers do need to understand that in the delicate dance that takes place between buyers and sellers to achieve a sale, it is the buyers, parting with their hard-earned dollars, who drive the market. Sellers need to be able to respond to this.
The spate of major road works taking place in the region are having a strong influence on the local rental market. And parallel with this, we are continuing to see more and more people choosing to live in this region and either commute to their workplaces in Brisbane or the Gold Coast; or they might come to more of a FIFO type arrangement where they live and work in Sydney during the week, and fly home to the north coast for the weekend.
The reasons for the strong attraction of buyers to our region remain vast and varied but it is festivals such as Blues Fest, Falls and Splendour that have really helped to put this region on the national map, and enhance its desirability for visitors as an alternate destination to put down roots and grow a life and a livelihood.