Achieving a Result in a Challenging Market BOOM, BOOM, BOOM….for years in the noughties this is what we associated property investment with; golden times where bricks and mortar provided attractive returns, quite quickly. Well, don’t despair, the old adage of investing in property is still and will always be solid, but investors and home owners do need to be educated about the market, and be aware that real estate returns are subject to the influences of a fluctuating economic cycle…always have been, always will be.
Alas, how quickly some people forget. Now, that is certainly not to sound negative…in fact, as principal and franchisor of three property based businesses I am inherently confident in the future of the Sunshine Coast market today, tomorrow and beyond. The fact is, it is unrealistic and unsustainable for prices to continually go up and up and up without substantial wage growth, and clearly on the Sunshine Coast which is a tourist/small business driven employment catchment area, there comes a time for price stabilisation (not decline), and I believe that’s what we are in now.
Statistics show prices haven’t really fallen, they just haven’t risen at the levels we experienced in the mid & late 2000’s, and that’s what happens in every sector of a market economy. So many factors influence supply and demand, and therefore price.
Supply is a major key in the price inflation or deflation, for example, in a hot market demand outstrips supply as we experienced in 2005 -07, and therefore vendors could demand higher prices. As more properties are for sale, buyers have a greater choice, and are therefore more in control of price as they have a greater selection and less urgency to make a decision.
Motivated vendors often face the quandary of trying to achieve a price that will return them a handsome profit and balancing that with the desire to achieve a result and move on. As a seller in the market today, you need to really assess the following:
• Why am I selling and how quickly do I need/want to achieve a result;
• Am I buying and selling in the same market? If so, the price I achieve may not be what I would ideally like, but I will be in a buyer’s position and can also have that powerful bargaining power to secure a property at good value. So, in essence, what I perceive I lose in one transaction, I gain in another, hence it’s not an untenable situation;
• How can I create a sense of urgency amongst buyers in the market to make a decision about my property? These are all quintessential questions you need to ask yourself, and any good agent will ask you these same questions, because, really in a market flooded with choice, it’s the serious sellers that will secure a result quickly, or at all. How you chose to price your property is your own decision, and the clearest, most effective way to do this is to be educated about what similar properties in a similar location have been sold for recently…not three years ago when the market was booming, but in the very recent past, i.e. three months ago. Any professional agent can supply you with this information, and whilst they can’t set the price for you, they can equip you with the facts to make an educated decision.
One of the most popular and effective ways of achieving a quick result is to Auction your property.
The advantages of Auction to the seller include:
a short, intense campaign with a deadline for interested buyers, therefore creating a sense of urgency, and also the fact that it works agriculturally at the base level of market forces, i.e. the market will dictate the price that they are willing to pay.
Even if you chose not to sell at that price, it gives you the collateral to make the decision to either withdraw your property from sale, or to set a price that may be more palatable to the market.
In conclusion, the really shining news for anyone who owns property on the Sunshine Coast, is that we’re a high growth area with an influx of interstate and overseas migration, and it’s been widely documented not only by property/demographic experts, but also by government studies that it is in the not too distant future that demand will outstrip supply again…so property owners will once again be in a very attractive position.