One of the topics that homeowners often ask us questions about here at Ian Reid Buyer and Vendor Advocates is centered around choosing the right time to sell. As a result, a lot of people ask us whether there is a right length of time to hold onto your home before selling it.
The first, and most important, answer to this question is that there is no hard and fast, one size fits all answer. The simple answer is that the right time to sell is when it best suits your own needs and circumstances, not what best fits the needs of the agent or the buyer.
Having said that, however, we saw some figures recently that shed some light on this topic that many readers may find informative.
Last week the analysts at Corelogic published their latest ‘Pain and Gain Report’, examined close to 1,000 property sales that occurred across Australia in the September quarter of 2021. In particular, it compared the sale price of properties that were sold during that period with the price that was paid when the same property last changed hands.
The report for the three month period found that the percentage of profit-making resales of residential real estate, (i.e. those properties that sold for more than they were purchased for), rose to 92.4 per cent in the third quarter of 2021. This was a solid increase on the 87.5 per cent recorded in the same quarter of 2020, despite the impact of the lockdowns that affected the property market in Sydney, Melbourne and the ACT during this period.
Beyond the headline numbers, there were some other interesting trends that made interesting reading. For example, the increase in activity among tree-changers and sea-changers meant that regional properties had a higher rate of profitable resales than in the capital cities. Regional markets had 93.1 per cent of sales being profitable, while the figure was 91.1 per cent in the metropolitan markets.
The report also found that house resales had a slightly higher chance of achieving a profit than units, (95 per cent versus 86.5 per cent), although that gap does appear to be narrowing in recent times.
As far as holding times on property are concerned, the median period of ownership on the sales was 8.8 years. Not surprisingly, properties that were held for more than 30 years achieved the highest overall profits, averaging around $745,000. However, due to the strength in the recent market, the report also found that properties sold within two years of purchase achieved the highest average rate of annual growth, achieving close to $120,000 per year.
The important thing to keep in mind with statistics like these is that while they do provide some interesting insights into the overall market, they don’t provide specific information on how much more your own individual property could be worth, or how the market is performing at a local level.
That’s why the advice and guidance of an experienced Advocate can be so valuable when you sell, particularly when it won’t cost you one cent extra! So if you are considering selling and would like some objective advice, give us a call this week on 9430 0000.
You’ll also find lots of helpful tips on selling your property in our free booklet, “Fatal Real Estate Traps Exposed”, so feel free to download a copy while you’re here.