The impact of COVID-19 on the property market has been unpredictable, to say the least. The closure of open homes and lack of auctions stopped many markets in their tracks in early-mid 2020 but was followed by a huge surge in prices.
With another lockdown in full force in some states, it’s difficult to know whether or not the upwards trend is here to stay or if now is the right time to sell. It’s not possible to give a definitive answer but here are some insights into recent real estate movements and expectations as we progress towards the end of 2021.
The Australian property market
2021 has largely been a seller’s market in Australia, with prices at all-time highs in many capital cities and regional centres.
Many home sellers have had exciting wins, selling at prices far beyond their expectations with the help of their real estate agents. The reasons behind the surge are low interest rates, Australians boosting their savings during COVID and the lack of stock currently on the market.
Forecasters are predicting that the average Australian house price will have risen by 20% (YOY) by December. However, there are some signs the boom is losing steam, with August only seeing a 1.5% rise on the average price of a home, which was the lowest monthly increase since January.
Those who predict house prices will soon start to drop point to concerns about the economy and the fact that growth has dramatically outstripped wage rises, leading to concerns about affordability.
Sell now or sell later?
With prices being high and listings being few, is now a good time to sell?
There are a few factors to consider. Firstly, the market is doing very well (generally speaking) in terms of family homes. You are almost guaranteed a good price and it isn’t clear how long the boom will continue. However, if you have an apartment, you may struggle to find a buyer in some cities as investors are wary due to the current lack of rental tenants. Do your research and speak to a real estate agent about demand and what it will take to sell for a strong price.
If you are looking to become a buyer and upsize after selling, you may not be able to afford the property you want with prices being so strong. It helps to have good relationships with local real estate
agents in the area you wish to buy so you can hear about new listings as soon as they become available and get in ahead of the crowds.
Should you decide to sell, give yourself plenty of time to get organised and accommodate any COVID restrictions which may be in place. Work with an agent to ensure your property is noticed by as many people as possible.
The bottom line
2021 is a sellers’ market and it looks set to stay that way for at least the next few months. The general consensus is that it is a great time to sell if you want to maximise your return on investment and if you have a clear strategy for your next move.
The risk in waiting to sell is that the economy comes under further pressure and there are extensive job losses due to COVID. There is also the continued question over when interest rates will rise. As the price of money increases, the amount people can borrow will drop.
You also need to keep your expectations realistic. Work closely with a real estate agent who can share the value of your home based on the local market and recent property movements in the area.
A quality agent will take the time to understand your goals so they can work out a strategy that will be effective in these unusual times and will attract as many potential buyers as possible.
