Signs at the end of 2017 and the start of this year are pointing to a nationwide slowdown in property prices. In terms of Australian property market trends, the bell-weather cities Sydney and Melbourne have chalked up 0.5% and 0.2% declines over the past month. This is the first house price drop Melbourne has seen since 2016. So, yes, it may finally be happening: the long-awaited Australian property bubble might be bursting – but it’s bursting in slow motion.
So what does this mean for homeowners?
Now may be a good time to sell
While 0.2% may not seem like much of a drop, there have been projections that the housing market will decrease by 5% in the upcoming year, which could make a real dent in the kind of return you can expect from your property. So, we’re not expecting a Sydney or a Melbourne property market crash, but more a natural dip as property prices correct. As a result, there’s plenty of warning of what might be happening, so many who are in a position to do so will likely look to put their property on the market as soon as they can to get the best price possible.
If you’re considering selling, take 30 seconds to request a free property report online. Our data can show you information such as historic suburb sales trends and comparable property sales in your area to give you an idea of what your home may be worth.
It’s also good news for people who are looking to buy their next home, as buying at a low point in the cycle will mean potentially getting a bargain on a new home.
New buyers will enter the market
A slower market – combined with Victoria’s first-home buyer incentives in the form of slashed stamp duty to purchase houses up to $750,000 – could see many more buyers able to make the leap and become homeowners. Those selling properties in this price bracket could, therefore, see competition from those looking to enter the market.
This could be a double-edged sword for sellers, however: more interested buyers could push up the value of the house, but prices over and above the first-home buyers stamp duty incentive will see those interested parties vanish. Homeowners should talk to an expert real estate agent who can help them make decisions about whether to renovate their home before selling – thus adding value, but potentially putting it out of reach of first home buyers.
Potential competition could keep prices afloat
The real estate market is a funny thing. People buy with their emotions far more than with their heads, and if there are lots of people looking to buy at once, all flocking to market to take advantage of lower prices, the resulting competition could well drive prices up. Remember: market value for a property is based entirely on what someone would pay for it. For example, an auction with enough bidders could see the sale price pushed well above the reserve.
For people planning to sell their house, the bottom line is that it will be unpredictable, so it’s crucial to do as much property market research as you can to get the best information. – speak to an experienced real estate agent with knowledge of your area.
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Want to know whether your property has been affected by the downturn in Sydney and Melborne housing markets? Get a free, no-obligation appraisal from an experienced Upside real estate agent today and find out the exact value of your home.