Is 2016 A Buyers Or Sellers Market?
I don’t have a Crystal Ball to predict the future (don’t we all wish we did?), but what I do know is that 2015 saw some crazy activity in the Melbourne property market. I also observed some major signs of change during November and December. Clearance rates were down, tightening on foreign investment kicked in 1 December and tighter lending for investment properties saw less investors in the marketplace.
Property is, and always will be influenced by supply and demand. Throughout the winter months there was massive growth in most suburbs across Melbourne. What the stats don’t tell you is that there were far more buyers than sellers. In other words it was a sellers market and they were able to achieve great prices partly due to a lack of supply. This pushed median prices up and in some cases gave false readings on the values of properties.
The latest quarter results are yet to be released but when they are I expect that many suburbs median price would have decreased. The truth is, in most cases that prices would not have actually decreased from 6 months ago, they have just been smoothed out from some more unrealistic results due to a lack of supply in the middle of the year.
This is good news for the buyer on two fronts, firstly, they will not have to stress so much about missing out. Prices are more stable in a flatter market. Secondly, a decrease in median values will freak some people out. After all, who wants to buy in a suburb where prices are decreasing? What if they fall more? Maybe I should wait? The longer a property is on the market, the more the vendor will have to be realistic and drop the price
Is this really all bad news for the vendor? Whilst everyone wants to get 2015 prices for their home, if the market cools off just slightly, then they will most likely be buying their next home in this cooled market too. Whilst they miss out on a higher sell price, they save on being able to buy cheaper.
So right now, I would say we are in a balanced market. Neither the buyer or the seller has a huge advantage over the other. Properties will always sell for what the market is willing to pay and so both parties will be successful if they are just realistic about a homes current value.
Each home is unique and if you want expert advice and a detailed report from one of market share properties consultants we are here to help. Even if you are not selling many people are interested to know the value of their homes and this information can be useful in the future.
11th January, 2016