Is The Market Really Falling, When Is A Bedroom Really A Bedroom & Really Blonde Locks
With interest rates climbing rapidly, I thought I’d use today’s blog to provide a snapshot of where we perceive the market to be right now.
I use the word “perceive” because it’s actually quite tricky to know exactly where things are at.
There’s no question that buyer activity has slowed considerably since the peak of the market (as far as our experience extends, we believe the peak was around March of this year).
Since then, we’ve had a Federal Election (always a killer of any momentum in the market) and a change of Government (an even bigger momentum-killer).
Add in a series of quite dramatic increase rate rises (after the RBA pretty much made guarantees that they wouldn’t increase rates until at least next year)…coupled with rising inflation, a War in Europe and international tensions that have affected the cost of goods…it was a sure bet that the property market was only ever going to head one way after such a boom over the previous couple of years.
The media turned on a dime and headline predictions of further price increases were quickly replaced with dire predictions of record price falls…and we’re still reading this rhetoric in the media almost every day.
But are prices actually falling and if so, by how much?
It’s a really difficult question to answer.
Official figures show that median prices have come back by approximately 2% since the peak but is this reality?
As I’ve mentioned in a recent blog, the statistics often don’t tell the full story as they’re dealing with settlement figures… and these days, the average property settlement can be anywhere from 30 days to 4 months so the numbers we’re seeing now are more reflective of the market back in May or June.
Looking more locally, we’ve seen enquiry levels drop by 70-80% although we’re still seeing some properties achieve prices that are extraordinarily good.
Many of the properties that haven’t reached the owners’ expectations have simply not yet sold and so it’s very early to determine if the price drops are 2% or the 15-20% that some agents are reporting.
And this is where you want an agent on your side – Is your agent seeking to bring down your expectations in line with buyer feedback (and in the process, trying to secure a quick commission and move on to the next sale) or are they there in the trenches with you for the long haul (if this is how things play out).
No-one (seller or agent) wants a property on the market for a lengthy period of time but at the same point, we’ve learnt over the years that the majority of sellers are more focussed on the price they achieve than the time it takes to achieve it.
This is why it’s vitally important to be upfront with your agent about your requirements.
We’ve just sold a property that was on the market for 9 months for the exact target price that the owners were wanting to achieve.
Our sellers were very upfront with us and informed us that they didn’t care how long it took but just wanted a certain price…and we’ve finally delivered despite the time it’s taken.
Many agents would have run out of patience and wanted a quick sale for one of two reasons…
- Because they are concerned the longer time on the market would affect the public’s perception of their ability, or
- They want to (or need to) get paid.
Our appraisal price for this property was below the price the owners required (and given the market has softened, I’d be lying if I wasn’t thinking that the horse might have bolted given we had several offers that were pretty close) but alas, we kept mixing things up and finally attracted the right buyers that appreciate the position and everything the property has to offer.
To me, it is far more satisfying to sell a property we’ve worked incredibly hard to achieve the sellers’ result, than a property we might sell within the first week…and in my experience, the owners really appreciate our persistence a lot more too!
I would estimate around 10-15% of properties achieving incredible results within the first week of entering the market and the other 80-85% of properties struggling a little more than they were should the same property have been listed back in February or March.
It does make it quite difficult when appraising properties – we believe a good agent will provide a thorough assessment of recent sales and provide a succinct price point of what is likely to be achieved… but when many of the only comparable sales were made a number of months ago, it’s hard to know whether we’re going to see the same market conditions.
The one thing we’ve noticed is that there’s no predictability in the 10-15% of properties that are achieving extraordinary results – the area, price point or style of property doesn’t seem to be following any pattern at all.
We’re seeing top end of the market, low end of the market, closer to the CBD and much further away from the CBD, homes, units, land and townhouses all randomly defying any change to the market whilst very similar properties in the immediate area currently for sale with lots of different agents are sitting idle.
One thing’s for certain – your agent needs to be able to negotiate effectively and market well in order to give you and your property a competitive advantage as we are seeing inexperienced agents really struggling to sell anything at all.
Next week, we’ll discuss how some agents use their strategies to work against you and simply attract the wrong buyers.
Until then… Happy Listing and Happy Selling.
Feature Property Of The Week
This week’s feature property is 134 Spitfire Avenue, Strathpine – a stunning family residence that’s completely renovated and offers plenty of infrastructure on the huge 1138m2 allotment. In addition to the 4 bedrooms, 2 bathrooms, 3 living areas and sumptuous kitchen that the main residence provides, there’s a double carport as well as an enormous shed that offers a workshop plus thee car tandem accommodation plus an addition single shed and another shed that could easily be converted into a Granny flat. This is a property that provides plenty for the very reasonable asking price – Be Quick!
Sublime Renovation, Several Large Sheds, Simply Enormous 1,138m2 Block
Insights Article…
We’re trying to find some media discussing property that isn’t simply more dire predictions about the market. Here’s an interesting read – when is a ‘bedroom’ actually a bedroom or when is it really just a study. Here’s some official explanation. There is a common theory that it needs be at least 9m2 in size but as you’ll see from this article, that actually isn’t the case. Worth a read…
Click Here To Read Article
Did You Know?
Michael once won a ‘cutest baby photo’ competition when he was in primary school. Check out these blonde locks (let’s just say that his head doesn’t quite possess the same coverage that it used to). This photo was taken in Teralba Park, Everton Park in 1976.
‘The Michael Spillane Team’ is looking to expand. We’re searching for a young cadet that’s hungry to succeed and an experienced buyer manager to join our highly successful team. There’s an outstanding remuneration package for the right candidate/s. If you think you have what it takes, please contact Michael directly at ms@innov8property.com.au
