If you are looking at buying a home first and then selling your current home in the present market, we urge your to tread carefully.
In this article, we provide insights into the contents of the book -” Inside Real Estate” by Peter O’Malley. The average consumer is known to transact relatively infrequently; and with the real estate industry changing so rapidly it is not surprising that consumer’s previous experiences are usually left redundant. Unintentionally, many people feel as though they are flying blind when buying and selling their primary asset. “Inside Real Estate” will fix that.
In the past 5 years as prices have been rising, those looking to buy and sell their primary residence/s have often elected to buy a new home and then sell their existing property.
For a period of time, consumers have had exposure to the market through two properties – the one they have bought and the one they now intend to sell.
In a booming market, while that strategy has risks, the buoyant market conditions minimised the risks. However, all booms end and we get the distinct impression this one is coming to an end.
If you buy a property and intend to sell your existing home – you don’t want to discover the boom has passed mid-campaign. If you do intend on buying before selling, it may be wise to get your property reappraised by an agent.
There are clear signs that the market is changing. Stock levels are up on last winter and the time on market is becoming longer. It may be prudent to budget for a lower sale price than you initially thought. Budgeting on a lower sale price and getting more is preferable as opposed to hoping for top dollar and having a hole blown in your budget by a softening market.
There are unknowns lurking in the market too. How will the Government’s measures to close out foreign investors impact the market? Similar policies in Canada saw the market drop 15%.
If stock on market is high in winter, you can expect it to be even higher in spring. A scenario whereby there are an increasing number of sellers and a declining number of buyers is forming for the market. The first home buyer incentives won’t have any impact on the market. Add the bank’s far tougher stance toward borrowers into the equation and you can see why we are urging those who ‘buy then sell’ to tread carefully.
Markets that can go up, can also go down.
Our Thanks to Peter O’Malley for this article.