I am getting asked more than ever, “What is the market doing?”. My cheeky buyers agent answer is, “Which market are you talking about?”, which I then receive a blank look. The reason I give this somewhat confusing answer, is that we have many property markets. We have the Australian market, state markets, regional markets, city markets, suburb markets and even markets within suburbs and streets. And each of these markets are performing differently, especially in the last 6-12 months.
But within the main areas that Open Doors Buyers Agent service in Newcastle, Lake Macquarie and Maitland, these markets are performing in similar ways.
Here’s a few points that I would like make in regards to “the market”.
- Good quality homes, in good locations that are ready to move into are still holding strong with good pricing and the days on market are still short. There is still a high demand for this type of property and the lack of supply being low, hence why pricing is very strong. I recently saw a property in Kotara sell at auction for $150k+ over the reserve, because it was an A grade property, and two bidders were prepared to pay overs for it.
- Properties that might be classed as B or C grade properties are taking longer to sell and are not getting the same price they were than 12 months ago. Typically, these properties need work, are located on a busy road or have some features that aren’t desirable. (Close to train line, government housing, sloping block etc). An example is a property that sold in Belmont for close to $100k under the reserve because the property needed a lot of work, even though the location was good. Buyers aren’t just buying anything these days, let alone properties that are compromised.
- Some ambitious vendors are starting to realise their property may not be worth as much as they think it is. The challenge that some sales agents are having is in regards to vendor expectations. Just because a property is listed with a certain asking price or guide, doesn’t mean that it is worth that price. The sales agent might be dealing with a vendor who is dreaming or potentially the agent has inflated the price to get the listing in-front of other sales agents. You will notice more and more price reductions on a regular basis, probably because of one these factors.
- Under-quoting is on the rise again. Some agents are starting to under-quote properties to try and stir up buyer excitement, because there aren’t as many buyers out there. The selling agent will list the property well below the vendors expectations to get a frenzy of buyers to come and inspect the property. The property will eventually sell well above the original asking price and the agent will use this propaganda to try and get his/her next listing from some unsuspecting seller. If it’s too good to true, then it probably is.
The property market is not a simple thing to try and summarise in one sentence. It is complex, it is a moving beast and unless you have the time, experience, expertise and market knowledge you could easily be led astray by someone who doesn’t have your best interests at heart. You might overpay, get sucked into a under-quoted property or potentially purchase a property that you don’t have the full picture on.