When is the time right to sell in your suburb?
Timing your sale to reflect market conditions is important. Knowing when it is the right time to sell is never a matter of guesswork.
Key indicators point the way for seizing the moment and setting the direction for future investment gains.
Steady gentrification in your suburb or region often represents key demographical change.
If you’re noticing a shift in demographics, this often means that investors and upsizers are also taking note.
If you want to know how your area is faring, you should typically look at the age and status of your neighbours, nearby and further afield.
Ask yourself, “are the people in my area changing?” Demographics aren’t just important to sellers, but also to investors and upsizers.
Investors want to buy into areas that are on the rise; families want to get more for their dollar, and sellers seek to profit.
The changing landscape
Another sign that the market in your region is in demand is a surge in new developments, infrastructure and amenities.
If you are noticing that state and local governments are building/spending in your area, this indicates immediate or future investment demand.
Future development is a tell-tale sign
Return on investment is the bottom line for developers. Time, patience and buyer confidence are the building blocks of the best developers.
Keep an eye on neighbouring suburbs
What is happening next door in terms of future growth and development for your suburb? Take a close interest in the sales activity of your neighbouring suburbs.
If housing affordability, stock shortage and slow wage growth affect a buyer’s ability to purchase in a boom area, they will tend to look for more affordable, next-door suburbs.
This, in turn, causes a ripple effect on neighbouring postcodes.
Is your suburb in a ‘ripple’ area?
Imitation is the sincerest form of flattery and the same can be said for suburbs seeking to emulate the qualities and characteristics of their more coveted counterparts.
Take the amenity test in your neighbouring hot spots. It might entail a slightly longer trek to train stations or schools, but if the commute is still within acceptable range, you should consider the sales potential in this area.
Assess the median value of the aspirational neighbouring suburb. If the median value is up to 10 per cent higher than your suburb, within six months to a year, this value should be reflected in your neighbourhood.
How to read auction clearance rates
It is often said that clearance rates act like a temperature gauge to show if you’re in a buyer’s or seller’s market.
There is a multitude of factors that affect auction clearance rates. These include interest rates, seasonal variations, unexpected economic shifts, public holidays, sudden economic or lifestyle changes (think: COVID-19 lockdowns and consumer sentiment) and even popular events occurring in your region.
Clearance rates above 70 per cent indicate that you are in a seller’s market. Conversely, if a market records clearance rates below 70 per cent, this suggests low or uncertain buyer sentiment.
It is important to keep the volume of stock for auctions at the forefront. However, if auction stock levels are low, then clearance rates are not a trusted indicator of how the market is currently performing.
A good agent knows that what is usually more pertinent than when to sell is the quality of the sale.
Focus on getting the right price for your home in the current market environment and purchasing the next property to fulfil your future objectives. If you maintain these objectives, your investment portfolio will steadily build.