Insights

Tools, tips, industry knowledge & market trends.

The property market has opened 2021 up in surprisingly strong fashion. It’s not that market pundits expected a soft start to the year, it’s just the strength in certain segments of the market has completely surprised most people. There is a case to say that certain niche markets have jumped by nearly 10% since Christmas. Whilst that seems close to unbelievable in a mere twomonth period, there is mounting evidence each week that removes any doubt.

In this special report, we break down the issues that property sellers should consider, prior to listing their property in 2021.

In the smash comedy hit movie, ‘Meet the Fockers’, Robert DeNiro plays the Father-In-Law from hell. If you are like Greg Focker and have crazy In-Laws like De Niro’s character Jack Byrnes, the good news is you probably don’t have to live next door to them, someone else does.

You can avoid crazy In-Laws a lot easier than you can avoid crazy neighbours.

The one question home buyers often fail to consider – who are the neighbours, and will we be able to liveharmoniously next door to them?

Once the decision to sell a property has been made, the next question is usually “when”?

Stock levels (demand) play such a crucial role in the performance of a real estate market.

There are predictable periods (trends) throughout the calendar year when experienced market operators know stock levels will be tight and other times stock levels will be elevated, inadvertently favouring buyers.

In normal times, there wouldn’t be a need for a market update in February, as the market unofficially closes or winds down between late December and late January. However, this summer, with state borders closed and the world at large upside down - buyers, sellers and real estate agents simply stayed home and transacted property throughout.

Harris Partners sold four properties in the few days leading into Christmas in a sign of what was to come. Buyers clearly felt more confident in this new pandemic world and were in a bullish mood on the back of record low mortgage rates.

‘So, what do you think this place is likely to fetch?’ It’s the question every agent expects to answer when pitching for a new listing. How the agents answer this question should be more important than what they answer.

When interviewing agents, many people unintentionally favour the agent that quotes the highest price. This sets up a scenario where they overlook pertinent details of the agent’s appointment, issues that seem insignificant at the time of signing the agency agreement.

In a boom, a low price guide attracts an excess of bidders who all compete vigorously for the property. The sellers end up with a satisfactory price, one buyer gets the home and there are many devastated buyers who line up to have another go next weekend.

What happens when the price guide doesn’t attract the promised crowd of bidders? The pain of underquoting is transferred to the seller.

The 2021 Sydney property market will be a case of dynamic forces pushing and pulling prices higher or lower. How the 2021 market fares and where it finishes on December 31, 2021 is anyone’s guess. To stay attuned with the market movements, it’s worth identifying the dynamic issues that are likely to determine the result.

If you want above market price for your property, agents have a number of tricks to bring you back into line. Some of these tactics are subtle whilst others are more transparent. Either way, when you know what they are, you stand some chance of protecting yourself. In fairness, some of the tricks outlined below can also be advice that assists a vendor sell their property, circumstances depending. Being able to discern between professional advice and a selling tactic designed to increase your motivation is the key to making the right decision.

During the property boom of 2013-2017, the Sydney apartment market rose in unison with the house dwelling market. That may seem like a moot point to some. But it’s worth noting this strength in Sydney apartments was at odds with how Brisbane, Melbourne, the Gold Coast and Perth apartment markets performed. In those markets, apartments underperformed housing stock by a significant amount.

Auction campaigns are a meeting of buyers and sellers who have conflicting motivations, which are exacerbated by each side having been fed conflicting information.

 

The vendor puts their property to auction on the promise of a high price. The buyers are attracted to the auction by the low price guide. The agent knows they have work to do on auction day to bring it all together.

 

To make a sale, the agent will probably need to get their vendor down and the buyers up in price.

 

In the blink of an eye, the housing market has gone from rising to falling. Buying in a falling market is often described as catching a falling knife. This is not always an apt description when it comes to falling property markets though. Unlike stocks and shares, you can gain a benefit from property beyond its short term price performance. Home is where the heart is and during the early stages of COVID-19, we have seen continued buyer demand and little to no panic selling.

At the time of writing, everything in our society is so fluid, predictions of any kind seems foolhardy. As an example, interest rates were cut twice in March, the first time we have seen an emergency cut in over 20 years. This barely caused a ripple in the mayhem.

Nevertheless, we have witnessed some early trends which are worth noting and we feel there are some key signals and signposts that are worth following to gauge the market’s performance.

What has happened thus far?

Rental market

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