The halcyon days of covid when FOMO ruled the local real estate market are now behind us. Since this time, the market has been in a long transition period of ‘refinding’ itself. But we have now landed.
Our best word to describe the current market is to say that things are now ‘transacting’. What does this mean? During the last six months, thanks in part to media speculation about interest rate rises, buyers have been afraid to commit to a purchase. Now, despite the fact that we have just experienced our tenth consecutive interest rate rise, people are adjusting to this new normal and are settling in, making offers and properties are gently moving through the system.
Core logic figures indicate that prices have dropped by 18.6 per cent across the whole of the North Coast. And while this might sound like a lot, its worth reminding ourselves that during the covid era, prices went up by some 50 per cent – and in some cases up to 100 per cent, so a modest drop of 18.6 per cent is not out of order in the grand scheme, and is not cause for concern. It was inevitable that prices would need to relax, as the former prices were for most simply unsustainable.
Our view is that we have now found the balance, with buyers becoming increasingly reassured that property prices are not going to fall off the cliff any time soon. This way of thinking is underscored by the knowledge that with the current low housing supply in our region, there will always be a floor underpinning the price. We also know that our region continues to grow – people still want to come here and those that are already here are not keen to go anywhere else – so an undersupply continues to keep the price buoyant.
The drop in price is creating an environment where buyers are more interested, and the stability of recent times is enabling transactions. It’s worth mentioning that the slow down kicked in during April 2022, so we are now eleven months into this new phase. And twelve months on from the floods.
Who are the buyers in today’s market? Around 80 per cent are locals, with a trickle coming from Sydney but this group are not necessarily buying. We are seeing more first home buyers and despite rising interest rates, the drop in price has largely boosted their ability to enter the market. During covid times we had a lot of people relocatin from Byron and Suffolk Park, but this sideways migration has slowed.
The emergence of banking pre-approvals has affected the market in a positive manner, with deals now rarely falling over because the homework has already been done.
Time on the market is currently sitting in a four-to-six-week window, with wide variations. The old adage that ‘nobody wants what nobody else wants’ remains true, with some properties, particularly those that are over-priced, landing themselves in the lemon category by would be buyers. The trend of the moment is definitely for new homes with nothing to do other than movein and install Netflix!
We are continuously asked for predictions on real estate values going forward. Have we hit the bottom? Are prices likely to rise soon? Are we going to fall further? While not even the most ardent follower of local real estate can ever accurately predict what’s around the corner, our instincts tell us that it’s unlikely that prices will rise at the moment. If anything, we expect that they will plateau, with a slight drop, or softening, also quite possible. But it will not be dramatic. Some individual properties may have to discount their price to make a sale, but this will be a circumstantial scenario depending on the buyer and the seller. If people are genuine about selling then they will need to meet the market. We do not expect to see prices dropping to pre-pandemic levels, but it may take a couple of years before things start heading north again.
Our general advice to people is – if you are contemplating selling within the next three years – sell now as things may take a little time to improve.
A tangible benefit of the current market is that we now have the luxury of time. You no longer need to buy a house before you sell to ensure you have a roof over your head; now you can sell first and with a long settlement you will have no problem buying again. Things have normalised. The key with this ideology of course is that for it to work, you must buy and sell in the current market to realise its benefits.
Our approach when we work with vendors remains consistent. We are not in the market for over-pricing and then seeing how that property does. Instead, we will look at recent sales, consider things such as the property age, position, size, location etc, and make a considered assessment on the value of your home. Our goal is to get you the very best price possible, while using our experience to guide you through the process in a transparent and professional manner.
Despite market fluctuations, people always need to buy property and sell property. It’s almost as certain as death and taxes! There will always be real estate movement, and nothing in real estate or in life stays the same. A good property will sell in any market. If you are after an opinion on your property, please give us a call.
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