Property owners who are timing the market should consider selling in the next few weeks and take advantage of unique market conditions.
McGrath Estate Agents founder and executive director John McGrath said current market factors make it more advantageous to sell sooner rather than later this year.
“Life with COVID-19 in unpredictable. Will there be another strain of the virus at play later in the year? We can’t possibly know,” he said.
However, Mr McGrath said there is some degree of certainty surrounding three factors in the current market, including:
- Omicron case numbers are going down, encouraging the federal government to open international borders to foreign tourists from February 21.
- Latest sets of data show an increase in home values at the start of the year across capital cities and rest-of-state markets.
- New listings are starting to increase — if the housing supply continues to grow, sellers could potentially face more heated competition later this year.
Mr McGrath said the first six months of the year will be slightly unusual, given the several calendar events that could impact the flow of market activity.
“We have the usual Easter long weekend (April 15-18) and the school holidays (April 11-25), plus this year Anzac Day falls on a Monday, so that creates another long weekend. But the big one is the federal election, which has to be held by May 21,” he said.
Typically, market activity slows down in the month of so before an election — this slowdown might come during or straight after the school holidays this year.
This means the market could potentially be in a slowdown for a few weeks.
Mr McGrath said the potential outcome of the elections is currently different and might have a different impact on the market this time compared to 2019, when it was expected that a Labor win could trigger a shakeup in property tax policies.
“So, investor buyers, in particular, were a bit on edge and sat on their hands to wait for the result. Their exit from the market prompted some sellers to wait too, given their buyer pool was reduced,” he said.
“This time around, it will be the lack of predictability about who will win that will have buyers and sellers ‘waiting and seeing’.
“While we don’t yet know whether investment taxes or anything related to property will be on the agenda, it seems it’s going to be a tight race and that means a level of uncertainty.”
For those who want to sell earlier, Mr McGrath said it’s best to do so before April 9.
“If you’d rather sell earlier, then you have only 8 weeks, which is not a lot of time when you think about everything that goes into a property sales campaign,” Mr McGrath said.
However, Mr McGrath said there is no reason at this point to expect the market to witness a significant change by June — all indicators at present seem to suggest that prices are likely to hold at their current levels.
“No matter who wins the election, interest rates will remain low, inflation is likely to keep rising and long-term pandemic-induced trends will be ongoing, such as sea-changing and/or upgrading to larger houses because people can work from home,” he said.
Still, the unpredictability of the COVID-19 pandemic, Mr McGrath believes, makes it better for sellers to make a move sooner.
“I’m not a fan of trying to time the market — people should buy and sell when it suits them personally and then hold their next home for the long term. That’s the way to win in property,” he said.
“But if you’re the type of person who really wants to try and sell at the best possible time, then I see potentially more advantages to selling sooner rather than later.”
Photo by @iam_muzan on Unsplash