Wednesday 17 Apr 2019
Whenever something changes there will be a period of adjustment that is often awkward and difficult to manage. It’s something we talk through with our kids as they morph into teenagers and young adults with the message that things will settle down eventually. It will be different, but it will be okay. And that’s exactly what we are now seeing unfold in the residential property market. It’s settling down….
As much as I regularly implore clients not to base decisions on the resilience of the property market purely on the auction clearance rate, it is an obvious number to watch and it’s interesting to see clearance rates throughout March have remained steady.
But it isn’t just that the number has remained steady. It’s good news too because the number of properties being taken to auction has risen which shows buyers are there ready to absorb new stock coming online.
I think what those numbers demonstrate is that we have reached a point of acceptance. The market has moved through the tough months of uncertainty and awkward conversations to emerge at a point where vendors and buyers are now prepared to work within the new market reality.
I won’t deny that reality is very different from what we have come to expect over previous years. It is important for vendors to acknowledge that double digit growth can no longer be considered a certainty. As I have said in previous weeks, we continue to see buyers active and willing to pay good value but they are also prepared to walk away which does gives them a position of strength.
For vendors, understanding that the dynamic has changed ensures they are in a much better position to take advantage of the growing buyer activity and find a place where they are satisfied and can make a deal.
Our team spend significant time working with vendors to identify expectations and realities in terms of their property sale. Those conversations are an important foundation for productive negotiations with potential buyers and positive outcomes for vendors.
The market is settling down as more people come to realise that whilst it has changed, it is still ticking along nicely.