I've noticed this month that the market has ‘come off the boil’ a little and the buyers are the winners!
I got a deal together last night that left my buyer speechless! It was like Id phoned to say he'd won lotto....
Buyers are now firmly in the driver's seat, and while I don’t expect to see the carnage in the Gold Coast property market that the media loves to report on, we are now seeing somewhat of a correction. You know things are changing when the selling agents are now having to do some work and they are ringing me for a change, wanting to tap into my network of buyers…..
In a hot market, any agent can open a door and a property can sell itself…...but reverse that and when agents have to rely on their skills, there’s a lot who’ll be living lean for a while or will leave the industry all together when the going gets tough!
Refer back to last months newsletter here where I explained the media’s input into the market slow down. To reiterate, you can’t treat the property market as a whole. There are markets with in markets and the Gold Coast is a totally different market to the Sydney and Melbourne market - but the media only likes to show a small worst case scenario snapshot. Remember good news doesn’t sell newspapers!!
Just recently I did the comparisons between median prices say in the Coogee and Bondi markets in Sydney to our Palm Beach and Burleigh Waters here on the Gold Coast and for a four bedroom, 2 bathroom home down there the median price is $2.8mil - $3.2mil and ours is $850,000 to $900,000. Same proximity to the beach, similar lifestyle - so I believe our market has still got along way to go!
Buyers can sell up in Sydney, stick $2mil in the bank and still buy within walking distance to the beach. It's a no-brainer!!
It seems that with the government's intentions to slow the Sydney and Melbourne markets and tackling the supposed issue of ‘housing affordability’ through changes in requirements for investor lending is having a widespread reach.
We’re noticing a large number of longer term investors now leaving the market too as many are coming off fixed interest rates, and with many not fitting the new lending criteria are choosing to sell, rather than refinance. For cashed up investors, there is GREAT buying to be found.
In my opinion, it's not only the current lending environment that's causing this current slow down but a lot the time of year.
A question we are often asked by owner occupiers and investors alike is ‘When is the right time to buy?....’
Being entrenched in the property industry for over 12 years now, I’ve watched and worked through the seasonal cycles first hand many times on the Gold Coast.
Unless you watch the market and analyse it on a daily basis, you wouldn’t realise things like the time of year, school holidays and public holidays all have an effect on the property market BUT it does, and more so than you realise.
Let me run you through a typical year…
January (our busiest time with a massive influx of new enquiries ) - People take time to take stock of the last year and have reassessed their goals for the New Year. Maybe a plan to upgrade and upsize their existing family home, a job transfer which means they need to buy a new family home in an unfamiliar market, or investors deciding THIS is the year to finally start investing in property.
Lots of sellers at this time of year too, especially units in the beachside suburbs are all trying to cash in on the uneducated interstate tourists who decide they’d love a little chunk of the Gold Coast for themselves (yes this does happen! Often!) And not uncommon to see in Surfers Paradise or Broadbeach that properties often come back up for sale a year or two later at the same time of year. New owners realise the reality of holiday rental return figures not being as great as they thought and sky high body corp fees taking their toll.
February things really start to heat up The hangover of Christmas and New Year is long forgotten (at least until the credit card bill arrives…..eeek!) and it’s pretty much life as normal.
Everyone is back from holidays, kids are back to school, the building industry is back to business.
An influx of new properties hitting the market, usually seen from the last week in January and well into February - in line with the kids going back to school. Don’t know why? Those of you with children would appreciate what a fruitless battle it would be to try and keep the house clean and tidy for open homes and inspections with kids at home rampaging! These sellers have also taken the time over Christmas, New Year and Australia Day to prepare their properties for sale and get their presentation 100% to maximise their sale price.
March/April - The market is running at full steam by now - with a bit of a hiatus in the middle for Easter! We’re noticing this year, that the number of ‘off market’ sales coming across our desks have increased substantially. Agents simply do not have time to get the listings online and market them correctly, so see us as a quick and easy sale if it’s a quality property at the right price.
May to July- Traditionally winter is renowned to be a quieter time in the property market. The buyers around at this time of year are very serious about buying and the sellers are serious about selling - usually for tax reasons and they usually do it in a hurry as they need everything wrapped up and sorted by end of financial year. Based on my past experience, the market almost comes to a standstill between the Federal Budget (usually the beginning of May) through until the end of financial year at 30 June. (And just saying, if you can’t find me during this time of year, I’ll be working on my tan for a few weeks in Singapore and Thailand!).
For us, the phone stops ringing from buyers and agents alike and it’s an ideal time to take a breather, catch up on everything in house, get our filing in order and get ready for Spring!
July/August - Come the first of July, the old financial year is behind us and the phone starts ringing again! Buyers are ready to go again, and it’s our 2nd busiest time of year with buyer enquiry. Buyers ring us as they’ve had their tax done by their accountant and they’ve got a tax problem they need to fix for the new tax year - and decided they need some professional help as they don’t know where to start.
Lots of beachside holiday rental high rise units up for sale at this time of year when there is almost zero rental return.
September/October - There’s a commonly held belief in the real estate industry that spring is the best time of the year for selling a home so there are lots of new listings coming through. The flowers are blooming, the grass is green and all the buyers and sellers are keen to make a move into their new houses and be settled in and unpacked by Christmas.
November - A seller can put almost any price on their property in November and it will sell! There is always frantic buying in November - buyers have realised they need to BUY NOW to be in their new house by Christmas - so it’s just carnage in the market at this time of year. Buyers overpay, just to be in the market and sellers reap the rewards. At this time of year, you really need to watch the market like a hawk to ensure you either don’t pay too much for a property or don’t miss out altogether, as in my opinion owner occupier buyer activity is at one of its highest for the year and often properties sell within 24 hours of being listed if priced right and marketed well.
December - Sellers in the market at this time of year are usually REALLY keen to sell. Possibly the contract on their property from November fell over due to finance or there is an imminent job transfer and they are in the ‘must sell’ situation.
If you’re a buyer, it’s often possible at this time of year to pick up a bit of a bargain if you’re pre-approved for finance and ready to go - but don’t get frustrated by the lack of choice on the market after the November action. Just take a break and revisit it all towards the end of January. Most solicitors and some banks take a break for 2 to 3 weeks over this time so the real estate industry is forced into a slow down. (Make sure you research this before you enter into a contract as you may need to use extended time frames for your contract conditions to be met).
Phew, what a year! After a quick breather we’re ready to do it all again……!
So in short, while every location and suburb goes through its cycles, so too does the Gold Coast Property Market as a whole throughout the year - and this can be key to understanding exactly what’s happening when you are trying to enter the market.
Following on from all of this though, I believe the right time to enter the property market is when YOU are ready - there is always good buying to be found especially when you watch the market like a hawk - but if you don’t have your finance pre-approval in place and haven’t undertaken your research, you won't be in a position to recognise or capitalise on these opportunities when they arise.
If you would like to discuss the Gold Coast property market and its cycles further, please give me a call on 0418 665 807
- I love this stuff!
Until next month, the hunt continues!.