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The weather is getting warmer and the days are getting longer, which means that spring has arrived and Australia's housing market is about to enter it's busiest time of the year.
Mortgage rates are at record lows and some housing markets, especially premium suburbs of Melbourne and Sydney, are showing signs of recovery.So, what does this mean if you want to sell and buy?
Australia's housing market is about to enter its busiest time of year. picture: Artist's impression of a home within Frasers Property's Fairwater community.
The case for buying
“Now is a good time to buy, primarily because interest rates are so low. You can now get more house for your home loan payments,” says Nerida Conisbee, chief economist at realestate.com.au.
“And prices have softened. Some individual properties and premium suburbs are doing well, but that hasn’t flowed through to cheaper suburbs yet.”
This means that outside the blue-ribbon suburbs, there are still plenty of opportunities to find a home that suits your budget and your lifestyle.
Cameron Leggatt, Executive General Manager Residential at Frasers Property says investors are also in a strong position.
“This month’s rate decrease has taken rates below the one per cent mark. Whether purchasing a home or investment, this improves affordability and returns,” says Leggatt.
It’s important to look for a home that suits your budget and lifestyle. Picture: Artist’s impressions of Frasers Property’s Burwood Brickworks community in Melbourne’s east.
The case for selling
Buyers are competing for a smaller pool of houses because sellers are holding back.
“I think sellers are waiting for a bit more heat to come into the market,” says Conisbee.
“But if you are selling, this isn’t a bad time to do it because there isn’t a lot on the market. There are plenty of buyers out there and fewer homes and the lower number of listings could work in your favour.”
Leggatt notesthat interest-rate changes, tax cuts and improved lending conditions are starting to have a positive effect on Sydney and Melbourne markets.
“This provides the opportunity for buyers to achieve a sale on their existing property whilst purchasing a more expensive property when the market is well off the highs of late 2017,” he explains.
Investors are also back, looking for quality homes with good rental yields. Picture: Artist’s impression of townhomes in Frasers Property’s Fairwater community.
Negative gearing rules haven’t changed so investors are also on the lookout for homes with healthy rental yields and capital appreciation opportunities.
The national snapshot
According to data from realestatecom.au,Sydneyis seeing the strongest increase in buyer activity and has also seen the biggest fall in properties being listed for sale. Prices are increasing in premium areas with some of Sydney’s multi-million dollar suburbs enjoying double digit growth.
“The rest of the market is not doing as well and if you’re looking to buy, some suburbs are sitting at rock bottom so there are opportunities,” says Conisbee.
Melbourne is shadowing Sydney’s market and Conisbee predicts that the city’s premium suburbs will start climbing soon.
“If you want to buy in those areas of Melbourne then you have a little more time to find a property,” she explains.
In Brisbane, data shows an increase in search activity by potential buyers, but the market remains flat. Conisbee says moderate price growth is expected, making buying soon a sensible option.
“Perth is five years into a downturn and although premium suburbs are doing better, there isn’t price growth across the board yet,” she adds.
Experts predict that Melbourne’s premium suburbs will start climbing soon. Picture: Artist’s impressions of a home within Frasers Property’s Burwood Brickworks community.
The take home message
Overall, there are more buyers than sellers and this benefits both sides of the property equation. Be sure to do your research before listing your home for sale or making an offer on your next property.
“Buyers are back and there is a shortage of listings –but that doesn’t apply to every suburb in every city. Talk to your local agentand find out what is happening in your area before you make your move,” suggests Conisbee.
Leggatt’s advice is to take a longer-term approach to buying and selling.
“I cannot stress this enough,” he says.
“Property is a long-term game. Yes, we have seen some large price growth in short periods of time in the past, however this is not a prediction of the future and people should focus on buying high quality properties in good locations with a long-term view.
“I would never recommend sitting out of the market, trying to pick the bottom or best time to purchase. It doesn’t take much for the market to improve slightly –and the difference in what you once could have purchased has substantially changed.”
This article was originally published on realestate.com.au as What you need to know about buying and selling in the same market.