Market conditions such as; supply and demand, interest rates, market confidence and the general economic outlook have an impact on the price and the time it takes to sell.
Historically, property values in Australia have increased by about 10% per year. Therefore holding property over a long-term will inevitably protect you against any highs or lows in the market. With time you would have built some equity in your property and should enjoy the rewards of long-term capital growth when you sell.
If you are selling to buy another property it is of little significance what stage of the property cycle we are at. If the market is at its peak you may be able to get a higher price for your home, but you will also be paying a higher price when you buy. Similarly, if you are selling at the bottom of the market you may not get as much for your home, but you also don’t have to pay as much when you buy.
The most important factor when selling and buying is to sell and buy when you are ready to do so because of your own family and personal circumstances and needs.
When selling and buying your family home it is the changeover price you should be looking at. this is the difference between your selling price and buying price. It is the amount you need to either come up with if you’re upsizing or if downsizing this will be the amount you want to be left over with.
The stage of the property cycle will not have much impact on the changeover price. Therefore, when buying a family home which you intend to live in for many years, don’t overly concern yourself with the state of the market. As long as you remember not to financially overextend yourself.
By Paul Kounnas