The Pros and Cons of Selling Property in 2023

The Australian Real Estate market has been grabbing headlines for quite some time. To stabilise, the Reserve Bank has raised interest rates several times. However, the rate hikes have not sounded a death knell for the Australian property market.

Even though rates are higher and there is talk of recession, there is a good chance this is the time to sell your property.

The Current State of the Market

Right now, the real estate market in Australia is somewhat unpredictable. However, experts say the conditions are favourable for the time being. Those who are thinking about selling should pay attention to several factors that heavily influence market performance.

• Interest Rates – The Reserve Bank intends to continue to fight inflation by raising interest rates. While the rates are not exceptionally high, it could be a good time to make a move.
• Inflation – Inflation raises the cost of everything while simultaneously lowering the ability of people to save money. To fight inflation, the Reserve Bank ups interest rates which makes buying a home difficult.
• The Rental Market – Rents across Australia are rising quickly. At the same time, vacant rental properties are scarce. The higher price for rent makes saving for a deposit increasingly difficult, and fewer buyers enter the market.

Property Forecast

The Reserve Bank has raised interest rates a dozen times, up four per cent. When the increases began, experts proclaimed the price of homes could fall as much as 15-30 per cent. As everyone braced for the rapid decline, the housing market flouted those predicting its descent and, to date, has climbed.

This points to the other factors which influence the housing market, which include migration, employment levels, and the supply and demand for houses.

There are expectations of housing costs levelling as soon as September 2023. However, gloom and doom are not in the forecast. The same factors that propped up the housing market to this point will continue to bolster housing costs.

As with all transactions, there are several pros and cons to selling your property right now. These include:

Pros:

• A Smaller Price Gap – This is excellent news for sellers who are looking for a new home. In 2023, there is a smaller price gap than we usually see. The smaller gap makes upsizing easier.
• Pressure on Buyers – Because rising interest rates lower borrowing capacity, buyers may need to move quickly to avoid losing their buying power.
• Increased Buyer Pool – Immigration is rising, and vacancies are still few and far between. This means more buyers are anxious to find a home. Interest rates are not excessively high, and with few options, buyers will be at your door.
• Potential Capital Gains – While it depends on when you bought your property, there is a good chance you have seen growth up to this point. Selling now, before prices drop, can be to your advantage.
• Many First-Time Home Buyers are Entering the Market – There are several government incentives for first-time homebuyers recently announced by the Government. Combined with the difficulty of finding rentals, the incentives are helping people decide that it is time to purchase a home.

Cons:

• Economic Volatility – Right now, wages are strong, and unemployment is low, and these factors mask a potentially problematic situation. Many experts in financial circles believe a recession is on the way. Selling a property during a recession is much more challenging.
• Timing Challenges – Because the market is never genuinely static, we can expect an upturn where more buyers enter the market, and prices increase. Some sellers may want to wait for the upturn and cash in on it.
• Increased Transaction Fees – Many rates are going up as a response to the market conditions.

Aside from the listed pros and cons, other indicators indicate whether you should put your property on the market.

• The conditions in your local market
• Your circumstances
• The property cycle is constantly in motion

How Zest Realty Can Help

Given the changeable nature of the market, it is understandable that you may feel unsure of the best decision for you right now. Contacting the professionals at Zest Realty will give you confidence no matter your situation. Our experts can assist you in finding the right property in an ideal location or help you with the sale of your home.

At Zest Realty, we put our customer’s needs above anything else, whether you are selling, buying or both, and we can assist you on your journey.