2021 was a boom year for property sales in Australia, but there will be no repeat this year.
Already property prices have started to soften, and, in some areas, they have even begun to reverse their gains.
Interest rates have increased for the first time in more than ten years. Consumer sentiment is not riding the highs it did last year. Sellers have lots to think about right now.
Should you sell now while the prices are still relatively high though coming off their peak. Perhaps you should wait it out to see whether the market recovers.
Still, your decision on when to sell isn’t just about property market conditions. Your circumstances also play an important part. Some people need to accommodate growing families by upsizing. Others may benefit by waiting for the next price surge to sell their property and create a nest egg for retirement.
Property prices are driven by supply and demand. This is why we sometimes see differing price growth dynamics in various areas. In market segments where prices are relatively high, you may see the prices slow down faster than in areas where prices are lower.
The direction of property prices will take their cue from the speed and quantum of future interest rate hikes. The jury is out on when and by how much the interest rates will rise. Still, analysts expect that they will rise by between 1% and 3.5%. This will impact property prices.
While the price reaction to the interest rate hikes will differ from one market to another, if you’re looking to bank the gains made over the past year and a half, now is the time to list. Don’t wait for interest rates to increase and property prices to fall.
It’s understandable if you’re hesitant about whether to sell or not. It’s a big decision and you should carefully consider all the implications of moving on.
It is true that the property market is uncertain right now but look at it in perspective. Properties are bought and sold all the time. There will always be someone who wants to buy.
How your property reacts to the current economic circumstances will depend on a number of factors. These include the type of property you own, its location and whether it falls into the higher or lower end of the property market.