It’s well documented in just about every media publication that property prices have increased both state wide and nationally in 2021, with predictions of further increases for 2022. It does however present a number of challenges for the consumer. With stock levels low there are still people that would like to sell, however the issue those sellers face is the majority need to go into another property and they too are confronted with very little selection. And for those sellers to buy as a subject sale, they don’t stand a chance especially with the amount of pre-approved finance buyers and cash buyers currently in the market. So those potential sellers are staying put, but caught in a difficult situation around the process of selling. So that’s obstacle one.
Another challenge for sellers is around pricing. There can be some wild ranges of pricing from agents to the point where I’ve heard first hand of agents just pricing any old figure, just to secure the listing because they have no stock. This is not in anyone’s best interest as they are not taking into account comparative sales because either there isn’t any or that the sales range is expansive. It’s also confusing for some sellers as well because agents have access to the same sales information & data.
We’re also seeing a number of landlords sell properties being they either purchased in a softer market and are trying to recoup some of the value of the property or are in the process of moving to retirement or succession planning and want to offload their asset. With landlords selling, there are generally tenants involved which can cause high emotions because if the buyer isn’t an investor then the buyer may want vacant possession. And for that to be achieved the tenants have to find another property (making sure they are given the correct notices in accordance with the Residential Tenancies Act) which isn’t an easy task when there are very limited properties available to rent (only 15 houses available for lease in Albany at the time of writing this article) and when there are massive amounts of people viewing property and putting in rental applications.
You’ve then got those clients that are wanting to build. With majority of the suburban blocks sold and being built on due to the government grants in 2020 there are massive wait times to secure builders. In Albany, for example, we’ve gone from under 150 residential approvals for the 2018/19 financial year to over 350 approvals for the 2019/20 year. Also, if the building timelines aren’t enough of a stumbling block, then the severe increases in costs of materials and the cost of building is providing a lot of frustrations. It’s not uncommon to hear that builders won’t allow fixed priced contracts, and to pass on cost increases on short notice that are out of their control. That is also not taking into account the shipping delays and slow processing at ports.
Buyers, of course, are having their own difficulties in securing a property. And apart from the lack of available listings for consideration they are competing with multiple offers, and in most cases not even getting a look at it before it hits online.
A tip for buyers reading this article. If you want to know what’s coming onto the market before it goes online, register your details with your requirements with an agent so you are on their radar.
So while the property market is strong, it’s also worth remembering that sellers, buyers, landlords & tenants have a lot of the above challenges plus a lot more not mentioned on a variety of levels, and that some of those aren’t going to go away anytime soon. Lots of patience & understanding is required for everyone involved which isn’t always easy, but is necessary in the current environment. And that’s all industries, not just real estate.
By Jeremy Stewart
Director
