The real estate market swings like a pendulum, with some years favouring buyers and sellers having the upper hand at other times.
While property always gains value over the long term, if you’re sitting on the fence about whether to sell right now, it’s good to have an idea of whether or not your postcode is a ‘seller’s market’.
The majority of the country seems to be a seller’s market at the moment. Here’s what this means:
What is a seller’s market and a buyer’s market?
Put simply, a seller’s market favours the seller, and a buyers’ market favours the buyer.
In a buyer’s market, buyers have:
• More choice because there are plenty of homes for sale
• Less competition from other buyers
• More time to make a decision
• The edge when it comes to negotiating
A buyer’s market will see properties for sale for several weeks or even months. Homes will fail to meet reserve at auction and sellers will have to drop the price or be flexible with sale terms to drum up interest.
In a seller’s market, buyers have:
• Less choice due to a lack of available stock
• More competition from local, interstate and even international buyers
• Less time to make up their mind
• Less negotiating power
It’s a matter of supply and demand. When supply is high, buyers are on top and can keep prices under control. When supply is low, the buyer with the most money will win and sellers have the advantage.
If you’re wondering what type of market your suburb or town is in, here are a few things to research:
• Sales time: If properties are being snapped up quickly and are not languishing on the market for months, it’s a strong sign of a seller’s market. Generally speaking, a home in a seller’s market is only up for sale for between four and six weeks. If you do some research into local averages, you’ll see how your postcode is faring.
• The number of interested buyers: The more buyers are out there, ready to buy, the more likely it is to be a seller’s market. However, more than sheer numbers, it is about ratios and the number of interested buyers in relation to the number of available properties.
For example, in November 2023, the Sydney suburb of Drummoyne had 20 houses available and realestate.com.au showed there were 1450 interested buyers. In the southern suburb of Narellan, there were 14 homes for sale and 873 interested buyers. So you can expect both suburbs to do well but there is definitely more competition in Drummoyne.
• Price creep: When average prices start to increase, it is another sign that a seller’s market is emerging. It shows sellers are receiving higher bids from people who want to
secure the property.
• High auction clearance rates and bidding wars: Another element to check is auction clearance rates. When they are strong, it’s a seller’s market. Generally, more than 70 per cent clearance indicates the sellers are in charge.
If you’re trying to decide whether or not to sell, take a look at some statistics for your suburb and speak to your real estate agent. They will be able to give you an idea of whether or not you’ll have the upper hand and be likely to receive multiple offers from interested buyers.
Want to know how quickly your home will sell? Reach out today at teresa@teresaberger.com.au .
