Happy new year to you all. I trust you had a wonderful Christmas and a pleasant break. I find that a change in my regular routine helps me shake things up a bit and gives me renewed energy.
This year, we certainly needed that energy. Most real estate agents understand that the property cycle is a bit of a rollercoaster; this year, it was enough to make us all dizzy.
The start of 2019 was, to put it mildly, tough. On top of all the other factors, we had to battle negative market sentiment that was fuelled by the media. We get it; doom and gloom sells, but it wasn’t helping us to sell homes.
Additionally, as real estate agents, we found that we were hampered by a market trend in Sutherland Shire to price homes aggressively to ensure they sold. Why? Well, the banks had tightened their lending criteria post the Hayne royal commission. This was largely as a result of an overheated market and the credit controls were the banks’ attempt to ensure fewer mortgage-stressed customers. However, (what we believe to be) the over-cautious response meant that buyers’ loan limits were greatly reduced. We know that buyers aren’t going to bid on a property unless they’re certain of finance, plus they were automatically discounting properties at the start of negotiations. The slide seemed inexorable – and no one wanted to pay too much for a home that was going to be worth less in six months.
The lack of certainty before the May Federal election certainly didn’t help matters. However, we must admit to being slightly surprised at the extent of the uptick once the Coalition took power and any hint of change to negative gearing was put to rest.
Certainty combined with the loosened bank lending protocols led to buyers returning to the market with much more confidence in the second half of the year. Part of the heat in the market was due to pent-up demand; however, we believe that buyers are seeing more value in the market and are willing to stretch themselves to gain the lifestyle (and potential capital gains) they’re after.
We’re delighted to see first home buyers back in the market, inspired by the Federal Government scheme to help potential buyers onto the property ladder. However, that has yet to play out in actual sales.
From our point of view, there hasn’t been such a good time to buy in decades. The low interest rate environment looks set to continue for some time, and home values, while not at their lowest, are coming up gradually from the depth of the trough. We’re certainly upbeat about the prospects for 2020.
Where is your confidence meter sitting for the coming year?
Can we help with advice on downsizing?
Having navigated the home sale and downsizing process not only for our real estate clients but also for members of our own family, it’s an area in which we’ve amassed a wealth of knowledge. So don’t hesitate to seek out our help – no obligations.