R & W Marrickville/Hurlstone Park Market Update 28.09.2019
We are definitely sailing through uncharted waters at the moment.
With the base line interest rate from the Reserve Bank about to drop below the 1% mark for the first time in its history the impact is being clearly seen in the current Inner West market.
This is without doubt the slowest start to a Spring selling season I have seen in the past 25 years.
Well as always, I’ve got a few ideas to share. What comes to mind instantly for me is job security, Stamp Duty, finance and interest rates.
The most underrepresented seller in my market at the moment is the upsizer, i.e. someone wanting to potentially remain in the area but trade a smaller property for a larger one. They mainly do this due to their family growing and choose the second half of the year to act as they prefer to move house just before or after Christmas when school is out.
Right now, they are almost an endangered species.
They aren’t confident in their employment due to slow to negligible wage growth, are coping well with their current mortgage repayments where the rates are significantly less than when they purchased and view the transactional costs of Stamp Duty as draconian.
I’ve spoken to many of these owners who have decided to either wait, or if they live in a house stay put permanently and go with plan B which is an extension. It’s a compelling argument when you consider if you wish to sell your current house and buy a more expensive one above the $1.5 million mark you stand to pay in excess of $100,000 in Stamp Duty and Agents/Solicitors fees.
Throw anywhere from another $200,000 to $500,000 in debt on top of that to trade up and people start to baulk. A home extension by comparison will cost significantly less with every single dollar invested in the capital improvements they make.
I mean what does Stamp Duty get you?
Their house might still only be on a small block of land with possibly no parking but now they have an extra bathroom and bedrooms as well as an upgraded kitchen, storage etc. which can last them another five years plus at least.
It’s a difficult proposition and the lack of suitable homes for buyers to inspect in the current market is evidence of the conundrum many of these vendors are facing right now.
I think this will improve gradually but not enough for anyone looking this Springtime to expect a much greater choice than what’s available right now.
Put simply owners don’t have pressure on them to sell with the current rates so low and can choose to stay put if they have to rather than want to.
Buyer’s need to keep this firmly in the front of their mind when they look for a home to buy.
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