When ‘for sale’ signs start popping up like flowers, it means the market is in bloom. But what’s this year’s Spring Selling Season actually looking like?
Property market in bloom
Spring is always seen as the peak property season. Analysis from research group CoreLogic, shows an average uplift of 18.2 per cent in fresh listings and 8.3 per cent for sales over the past decade, led by cities across the east coast.
Interestingly, colder regions also have the largest increase in spring time listings.
CoreLogic also warns that seasonal factors can still be tempered by broader market conditions, such as interest rates and economic factors.
To sell or not to sell?
Sales volumes across some cities have actually declined during spring when the market has been in a downswing, such as in Sydney and Melbourne in the springs of 2015, 2017 and 2018, when temporary tightening of lending rules created a sharp decline in investor demand.
This spring selling season is under pressure from a continuation of high interest rates, slowing economic conditions and low consumer sentiment, and sellers may struggle in two of the state capitals in particular.
CoreLogic analysis indicates that sellers will have an advantage this spring in Adelaide and Perth, and some of the more affordable markets of Brisbane, such as Beaudesert. But for some sellers in Melbourne, Hobart and Sydney, spring does not necessarily mean it is a good time to sell this year. Prospective vendors need to assess the state of their local market, as they may find there is more competition for sellers in the months ahead.
The data points to a particular weakness in Sunbury in Melbourne, and Brighton in Hobart. For the Melbourne and Hobart markets with high total listings, sellers appear to be in a fairly flat, or falling market, based on the three-month value change. The most depleted markets are in Adelaide, Perth and Brisbane, where the minimum uplift in value was 3.7 per cent over the three months to July in the Norwood/ Payneham/ St Peters region of Adelaide.
The depth of housing demand may be tested as we move into spring, especially in markets like Melbourne and Hobart where listings are already elevated. A rise in new listings is anticipated, but a lift in demand may not occur at the same time.
If we do see advertised stock levels rising though spring, it’s a good sign that we may see some further momentum leave the upswing in the Australian dwelling market. But no matter what time of the year you want to buy or sell, there are 10 things you should do before jumping into the property market:
1. Do your research
Look at as many properties as possible to get an idea about prices in your area. What adds value, which types appreciate faster, how to get a good deal, and the pitfalls are of a too-good-to-be-true deal.
2. Get the property valued before you buy
Even if you’ve done sufficient research, buyers can still pay overinflated prices for properties so it’s smart to get a property valued before you make an offer.
3. Get the property valued before you renovate
One of the biggest misconceptions buyers have is that the more capital they spend on a property, the more profit they will make. This isn’t always the case.
4. Find a good property manager
If you’re buying an investment property, it’s important to know the best way to maximize your rental income to ensure that it rises with the market.
5. Location, location, location
Look for areas with potential to maximise capital growth and create high yields. Important things to look for are proximity to public transport, leisure activities, and to work and schools. Pay for some independent research which will tell you what the highest-rated suburbs are – it’s worth it!
6. Buy “better” properties
Physical factors to look for when researching properties are:
- good-sized bedrooms
- off-street parking
- good positioning
- and a uniqueness that sets the property apart from others in the street. These will ensure the property grows in value and desirability.
7. Buy blue chip properties
Cheap properties are often cheap because they are not in great demand. Try to discover why.
8. Buy at, or below, market value
Unrenovated properties in good areas can fetch lower prices and offer excellent opportunities to maximise capital growth. You can also achieve good yields if you renovate.
9. Get a good mortgage broker
A good broker should be one of the most important professionals on your team. The more legwork the broker does for you, the more time you can spend finding a great property.
10. Stick to your strategy
Work out what works for you. Once you find the strategy, stick to it. You need to be aware of other opportunities and get advice, but often these can be distractions. A good strategy doesn’t have to be complicated – it’s often the simple things that work.
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