We are, as they say, living in interesting times. There is an election around the corner. The result seems a forgone conclusion, but not necessarily the candidates who will be contesting it. By the end of the week we should have more certainty about the candidates, but then maybe not the result. Still following me? We have an increasingly heated property market and a world economy in uncharted territory. The US Fed’s signalling of an end to quantitative easing has thrown world share markets and our currency into a spin. On the one hand, this could mean that interest rates have bottomed, putting a lid on property price increases. On the other hand, the instability in the share market could cause capital to flee to the relatively safe haven of property. After all, some of our largest property booms have been during times of high interest rates and instability. Now, if you’re any wiser about the state of the market after reading this, I’d love to hear from you!
Throughout June, the auction clearance rate has remained in the mid-70s, the strongest winter results we’ve had for years and a huge improvement on the same period last year. Properties in the $1-2 million range are performing particularly well, as buyers in this market become increasingly frustrated at the limited stock available.
There are the usual reasons: continuing low interest rates, low unemployment, relatively low stock levels, and investors moving out of stocks and into property. Most important, however, is improving buyer sentiment. Buyers see the market as strengthening and many are nervous about “missing out”. However, things can change quickly and a lot will depend on the news coming out of the US.
If you are considering selling in the next 6 to 12 months, I recommend that you think about doing so sooner rather than later. Limited stock levels, however, mean that you need to give careful consideration to your ability to secure a new home. These two recent blog posts can help you with these decisions: choosing the best time to sell your property; should you buy before you sell or sell before you buy.
Regards
Alex Hart
