It’s no easy task to predict the best time to sell a property, especially in a real estate market that has experienced extreme highs followed by significant downturns.
But with renewed buyer confidence, less stringent lending criteria and low interest rates, sellers might want to consider taking that leap into the great unknown.
And now is as good a time as any, says Peter Nicolls from KR Peters – Wantirna.
“It’s a great time to sell,” Mr Nicolls says.
“Our research shows the market bottomed out last November and December but no one believed us. And now the pendulum has swung back, with house prices on the rise. I have never seen a rebound of the magnitude that we’ve experienced in the last 10 months.”
The real estate market has been on a wild roller coaster ride where prices skyrocketed in 2016, peaked in 2017 and fell into a long decline in 2018.
But that is the past.
Median house values are back on the rise. They have increased by 4.8 per cent nationally during the last quarter, according to the REA.
Experts forecast a strong 2020 in Melbourne, with growth of seven per cent or more in the next two years.
Market analyst CoreLogic reports a rise of 2.3 per cent in the Melbourne property market in October.
This comes after four consecutive months of positive auction clearance rates coupled with median price increases.
Mr Nicolls says buyer demand continues to outstrip supply, which puts a positive spin on selling in a revived market.
“Before the revival, buyers were waiting until they were positive that the market had bottomed. They didn’t want to make a buying decision until that time so they sat on the fence.
“During that time, the population (in Melbourne) grew, the labour market tightened and no one was buying so it created a pent up demand.”
Mr Nicolls says potential sellers would be wise to heed the call of a market swinging in their favour.
He believes the market has so much heat in it that potential sellers who hold out for the next big housing boom could miss out.
“If a seller says, ‘I’m not going to sell, I’ll wait until it goes to the top,’ they won’t know when it’s gone to the top, just like they won’t know when it’s gone to the bottom,” he says.
Two Reserve Bank Australia (RBA) rate cuts have taken the cash rate to an all time low of .75 per cent.
While this has played a role in luring buyers back to the market, Mr Nicolls credits the Australian Prudential Regulation Authority’s (APRA) less restrictive lending criteria and positive media coverage of the market as the other two main drivers.
“The newspapers have stopped talking doom and gloom and every second article is now positive, that’s what’s really bringing buyers back, along with the fact that the banks with APRA have relaxed their tight lending monetary policies,” he says.