As this is our first update since Christmas, I hope you were able to find time over the past couple of months to unwind and enjoy some quality time with those you care about.
I’m pleased to report that the property market in 2019 has kicked off on a relatively positive note, despite the ongoing negativity in some sections of the media. History has taught us that at the start of each new year we normally see a fresh pool of buyers come into the market. This has again proven to be the case in 2019.
An analysis of activity during the past four weeks has shown that buyer inspection numbers are up by between 30-40% when compared with December. Combined with the usual drop in new listings during the holiday season, we have seen increased competition between buyers, albeit at price levels below what the market was once commanding. That being said, it is encouraging to again be receiving multiple offers, rather only negotiating with a single buyer, or no buyers at all. This environment has enabled vendors to approach their campaign with a great deal more confidence about what their sale price is likely to be.
After working through a sharp drop to property prices in the latter half of last year, we now look to the year ahead and expect a more balanced market place. In the short term, it’s likely that buyer activity will remain solid, but we expect some softening across particular suburbs as they align with adjoining suburbs that were harder hit in 2018.
We see the next couple of months providing property sellers with a relatively clear run, with just the Labour Day weekend to negotiate. However, it is important to remember that once April arrives, we will have the next school holidays, the Easter break and, (in all probability), the Federal election disrupting activity. So, if you’re going to make a move in the first half of 2019, you might be wise to consider doing it sooner rather than later.
On the topic of the election, it seems that property is going to play a key role in the lead-up to this year’s vote. Whilst we do not wish to publicly take sides in this important decision, when it comes to matters regarding real estate, we agree with the recent call to Bill Shorten by the Real Estate Institute of Australia. The REIA has asked for Labor to declare all the details of their proposed changes to Negative Gearing and Capital Gains Tax laws so that voters know exactly what they are actually voting for. As the REIA said, “All Australians need to know what and when a Labor Government, if elected, will do regarding property taxation.” Unfortunately, Bill Shorten, has stated that there will be no decisions made regarding changes to existing Negative Gearing and Capital Gains Tax arrangements until after the federal election, which leaves us all in the dark as to what changes may be on the horizon.
If, as has been touted, there is a reduction to discounts on Capital Gains Tax, as well as the complete removal of Negative Gearing for investment properties, we expect to see additional downward pressure on property prices. So, depending on the outcome of the election and the implementation of policies that follow, we could be in for some significant adjustments later in the year.
The one fact that you can be sure of right now is that movements in median property prices have varied a great deal, depending on the area you live, the type of property you own, and the price bracket that it falls into. This actually provides a huge opportunity for both buyers and sellers alike to take advantage of the current discrepancies in prices. The people who receive the best quality advice in down markets, are the ones who tend to profit the greatest over the long term.
With this in mind, if you are considering selling, or simply making longer term financial plans, please don’t hesitate to contact one of our team for some objective advice, and a thorough update on what is happening in your area.