Fears, Falsehoods, and Facts Around Selling Property in a Post-Covid Market
Six to twelve months ago, homeowners who decided to undertake the exciting yet daunting journey of selling their property often found themselves inundated with offers – many of which were significantly higher than the asking price.
Driven by record-low interest rates, a swathe of returning expatriates, freed up cash pools from the restriction of interstate and overseas travel, and the resultant “fear of missing out” rush, the property market leaned heavily in favour of sellers.
Now, with the first of what’s likely to be many cash rate rises already dished out by the Reserve Bank of Australia (RBA), and the imposition of tighter lending criteria by the big four banks, many sellers are asking the question:
Have I missed the market?
The answer to this question is multi-faceted, and will vary depending on state and suburb, but, according to Hunter-based real estate agent, Chad Buckley, the answer is a firm “no.”
Local and national news headlines, which are designed to incite fear to gain attention, are often seen proclaiming doom and gloom for the market, sparking many homeowners to become fearful that their family home may be losing value at a rapid rate.
Noting that these same publications are simultaneously publishing articles that spell doom and gloom for homebuyers (and that many of them predicted that the beginning of the pandemic would tank the value of homes), Chad explains that the market has simply transitioned from “nuts to normal.”
“There are still plenty of buyers out there, there’s still more demand than supply, and homes are still moving for good prices in good timeframes – we’re just not seeing as much of the chaos that occurred over the past year.”
Chad also maintains that the Hunter Valley is largely insulated from a lot of Sydney’s huge swings in price due to its relative affordability. So, not only are these predicted interest rate rises of less concern in more affordable areas of the market – as opposed to places like Sydney, where the median house price is $1.6M1 – they’re also going to occur over a long period of time.
Another piece of the puzzle that will likely protect the value of property against the rising cash rate is the current rental scarcity. According to a recent report by Domain, the national rental vacancy rate has dropped to just 1 per cent in April, halving year-on-year2. This scarcity puts in motion a cascade of events beginning with increased tenant competition, leading to increased rental prices, and ultimately ending with more people seeking to purchase and occupy their own homes.
Couple that with the newly elected Labor government’s Help To Buy scheme, which will provide a number of eligible individuals with an equity contribution of up to 40% of the purchase price of a new home – further increasing the demand for housing – and it’s plain to see that there are many factors that affect the property market, rather than simply the RBA’s cash rate.
At the end of the day, there are no crystal balls to predict what’s going to happen in the economy or the property market, so the best thing that sellers can do is to arm themselves with as much knowledge and preparation as possible. And, though all properties and situations are different, if you’re considering selling there are a few tips that can help lead to a successful sale outcome.
Firstly, you’ll want to have your property appraised by an agent you can trust. Not only does this give you an indication of what you can expect to receive for the sale – ensuring that your next decisions can be made with reliable information – but it will also give you an outsider’s perspective on what elements of your home might be worth updating before the sale.
One example of this includes having a Property Improvement Plan completed, which is a thorough analysis and report on your home to ascertain the most effective aspects to renovate or update. For example, some sellers will erect a wall or conduct expensive renovations on relatively modern bathrooms and may not recoup the cost, whereas something as simple as fresh carpets and a coat of paint might add tens of thousands of dollars to the sale result for a fraction of the initial investment.
Secondly, ensuring that your property is marketed to a high standard is paramount to ensuring an effective sale result. From imagery and editorials to auction campaigns and live tours; selling your home without adequately showcasing its best features is like applying for a job without spell-checking or formatting your CV.
Another marketing avenue to consider is launching to a premarket VIP group, which exposes your property to a vetted pool of thousands of qualified buyers. This provides invaluable insight into the market’s reception of your home prior to its portal launch date, and often results in a sale, potentially saving hundreds of dollars on portal fees.
Thirdly, consider having your home professionally staged. Not only will this aid you in getting a head start on packing and moving, but having a professional stylist decorate your home will show its maximum potential. There’s a wide range of staging companies on the market, and most will do all the heavy lifting for you.
The final step in the long journey to selling your home – if you’ve done your due diligence during steps 1 to 3 – is to relax! Selling property correctly takes time, and, providing that you’re well prepared, that time should be filled with excitement and new plans, not anxiety and stress.
