Balanced market tosses up good-buying opportunities for upgraders
More than ever, property vendors are willing to listen to offers from prospective buyers on the hunt for homes across Melbourne’s suburbs.
The current state of play in the residential real estate market – characterised by motivated vendors and well-researched buyers who face challenges in securing loan finance – is tossing up all the right conditions for “upsizers” to buy competitively.
Nelson Alexander Sales Director Arch Staver says the vast majority of sellers have a strong reason or a time deadline, or both, for putting their properties up for sale.
That reason could be a desire to reduce debt, to relocate to a new area or to fund the purchase of a new property. Either way, there are very few discretionary vendors who refuse to settle for anything less than a sky-high asking price, active in Melbourne at the moment.
“Vendors are not a problem in this market,” Mr Staver says. “This is what buyers need to understand.
“If they can get their finance together, there are good opportunities to buy. Owners are pliable and are willing to sit at the table and negotiate good outcomes for both parties.
“If you are a vendor on the market, you are on the market for a reason.”
One of the key trends in the 2018 market is that more residential properties are selling for prices within – and sometimes, below – their agent-quoted price ranges.
This is generating opportunities for Melburnians to make substantial savings when they upgrade to a more expensive home.
There are distinct price advantages for home owners looking to trade up from a $1 million to $2 million property to one priced at $2.5 million or above.
The market is very much being driven by owner-occupiers. Investors are increasingly unable to access new interest-only loans and, in general, they are sitting on the sidelines and letting owner-occupiers target a broader pool of properties.
Mr Staver says it’s clear that the market is continuing to produce tearaway results.
He notes that properties such as A-grade period homes in top-notch locations and listings that offer an unusually large land size produce big prices at auctions. But he adds that a greater proportion of properties are selling for around their price range or not a lot more.
Well-researched buyers typically opt to buy and sell in the same market. There are major plus-factors for upgraders who make their move when median housing prices are stable and the tempo of buyer activity is more moderate.
It is often better for homeowners to upgrade their housing in a softer market because the savings can be larger in the dearer price brackets they aspire to.
For example, if you are looking to purchase a $3 million house, that property might now be available for $2.7 million or $2.8 million. So even if you accept $50,000 or $100,000 less than the price you had hoped for when selling your existing $2 million property, it can be well worth the trade-up to make the gain on the next property.
Mr Staver believes recent sales and price trends strongly demonstrate that it’s an advantageous time to upgrade.
“If there is a house that you aspire to own, understand that it is on the market with a motivated vendor,” he says.
“If you have got your finance locked in, the opportunity to upgrade to a larger, more expensive house is very good. Let’s just say, that that more expensive house is probably less expensive than it has been previously.”
If you’re thinking of selling, or would simply like to know what your property is worth in the current market, please fill out the form below and your local Nelson Alexander agent will be in touch shortly.