Could you get blindsided by the 2017 property market?
If you’re considering selling any assets within your property portfolio but can’t decide whether to list with an agent this year or next year, there are some unusual factors to consider as 2016 draws to a close.
In the lead up to the summer property market hiatus, potential vendors start worrying that it’s too close to Christmas to list their property for sale, but that’s only one factor in the equation.
They’re correct to be wary of the traditional slow down in the market that takes place over the Christmas and New Year period. However, last year, many real estate agents were flat out handling buyer enquiry throughout the holiday period and, with stock levels far below normal levels nationally, many expect to be even busier this year.
Typically, home sellers get the best response to their property when there are few other properties for sale to compete with. Buyers are quick to make offers and keen to negotiate acceptable prices because they’re keen to secure a new home before listings thin out over the holidays.
Homeowners or investors thinking of selling their rental properties should definitely be talking to agents and tax advisors now because preparing a home for sale, completing photography, and obtaining the necessary legal documents for an agent to start work all takes time. There is also a raft of changes coming for Self Managed Superannuation Funds in July next year, so some investors may be thinking now is a good time to sell.
One of the most substantive changes the Government will make, with regard to Superannuation and property in 2017, is the imposition of a $1.6 million ceiling on the amount of Superannuation savings that can be held in a tax-free private pension. With seven months before the changes come into effect, some investors with self-managed funds are taking steps to sell up in advance. Naturally, the best advice is to avoid rash decisions. Consult a tax advisor or personal accountant before deciding the best course of action for you.
Agents are generally anticipating increased stock levels throughout 2017, because 2016 has by and large been a seller’s market and vendors have been holding back, keeping the number of homes for sale unusually low nationally. The real estate market is cyclical by nature and bounces in stock levels generally occur after periods of shortages.
A glut of apartments nearing completion is another factor anticipated to come into play throughout 2017. Concerns are growing that many apartments purchased off the plan by foreign investors may not be able to complete as a result of tightened lending regulations. In response to the concerns of property developers, Treasurer Scott Morrison has announced that foreigners can now purchase off-the-plan dwellings purchased by other overseas buyers who don’t settle their payments. This response will limit the risk posed by a flood of apartment listings coming on the market in distressed circumstances.
Another factor that’s hard to predict but likely to influence market conditions in 2017 is the “Trump Factor”. We’ve already seen America’s largest non-bank lender lift fixed rate mortgages in anticipation of the US turning on the debt tap to fund infrastructure builds. This is likely to drive interest rates up and Australia will not be immune.
If interest rates rise, the willingness and ability of buyers to meet homeowners’ price expectations will begin to erode. If the number of homes for sale increases concurrently, and it typically does in the New Year, market dynamics could shift in favour of buyers.
Confidence is everything in the real estate marketplace and uncertainty about USA policy direction under President-elect, Donald Trump, will almost certainly influence overall market dynamics in 2017.
Are you planning on moving in 2017?