If your price expectations are out of touch, you’re much less likely to achieve a sale
- Written by Tim McKibbin, CEO of the Real Estate Institute of NSW (REINSW)
As one REINSW member put it recently: each week we edge closer and closer to a ‘normal market’. Some vendors, however, still have their heads in the clouds.
Clearance rates, while still very strong, have moderated in recent times to sit around the high 60s in percentage terms. Feedback from auctioneers suggests houses are performing slightly better than units at the moment.
Many properties are selling prior and for those that make it to auction, buyers are eager to compete up to a point, which is typically around the pre-auction price guide.
The lesson is clear for vendors: demand for your property is strong but if your price expectations are out of touch, you’re much less likely to achieve a sale.
With the first quarter of the year behind us, an election looming and winter around the corner, we can expect the rhythm the market has settled into to remain steady.
Soon, the Reserve Bank will meet again and that means all eyes will again be on the interest rate decision. There are obviously different schools of thought as to when a rise should occur but for the real estate market, the status quo is the best-case scenario.
The price heat has come out of the market but at the same time, a correction is unlikely. Affordability remains a critical issue and the average young couple in Sydney has to save for about eight years to accumulate a deposit.
Rising rents makes this proposition even more difficult and higher interest rates would have a similar impact.
Federal Labor has now come out with its plan to help affordability, specifically in the regions, however again we see demand strategies proposed when supply is the problem.
It’s not much help to first home buyers to provide reduced deposit incentives to help them buy a home when there are not enough homes to go around.
