Let me explain
Thursday 05 Feb 2015
I predicted the year would start strongly so I have been surprised by the fact that throughout January there has continued emphasis on the ‘shortage of supply’. I think the market is a bit illogical right now. So let me explain.
We need more listings. It’s that simple. There are not enough properties on the market to meet buyer demand. And I’m talking across all property configurations and price ranges. Despite solid results throughout December there still appears to be a real lack of confidence out there which seems to be deflating momentum to move onto the market.
I recognise the inclination will be to assume agents exaggerate claims that ‘supply is low’ as an excuse to motivate vendors to ‘pick me, pick me’.
Of course there’s an element of competition when fighting for listings but right now the focus of the fight is not between agencies, rather it is simply to get potential vendors to list at all. Figures released this week by Core Logic RP Data show the number of new listings in Sydney are down 14.6% on last year.
It’s illogical because buyers are there but vendors aren’t, and I can’t work out why. Late January and February represent an ideal time to list. Holidays are over, school is back, the weather isn’t too hot and people who have been distracted are focussing on the business of getting on.
Add to that the fact that interest rates are low – even lower as of this week – with many commentators suggesting another rate cut is still possible in the near future.
Buyers are out there. We have seen a surge in activity in the high end price bracket between $4 million and $5 million which I see as a great demonstration of buyer confidence. They are active and keen to take advantage of the affordable finance opportunities.
Perhaps vendors are holding off in the hope of a price boom. But why wait? Demand is there now. Great prices are entirely gettable, so my advice is to get out there, get your property on the market and get a great deal done.