From the desk of Greg Pearson – Sales Consultant with Wellington & Reeves Real Estate Albany
Firstly, Happy New Year! I wish you and your family all the very best for the exciting year ahead.
Well, 2023 was certainly a crazy year with an extremely active property market across all sectors. We have seen significant growth here in Albany, Western Australia, which only continues to rise. A highlight for the year was seeing Albany take the title of ‘Top Performing Regional Centre’ for the March 23 quarter according to data from REIWA. Whilst latter REIWA data revealed that Albany had a rise in median house prices of 10.3% to June 2023. There are a couple of factors driving the growth but here is what I see to be the main contributors:
- We are continually seeing people from both the metro and other regional areas discovering exactly what Albany has to offer. Generally, the block sizes are larger and of course, our milder climate is appealing in comparison to many other areas which have seen less rain and warmer temperatures, making Albany a desirable relief location.
- The housing shortage continues to ring true in the rental sector. I am regularly hearing stories from tenants turning up to rental viewings, faced with 20+ potential tenants viewing the same home. From this, we are seeing a number of tenants bringing forward their purchasing plans to help escape the rental race. However, what is slightly pleasing is that we’re also seeing investors return to the market place with a quarter of my personal sales for the year going to investor buyers.
Looking Forward To 2024
So, the number one question I was being asked towards the end of 2023 is “what is the market going to do in 2024?” and whilst I don’t have a crystal ball to answer that question with absolute certainty, my prediction is another year similar to 2023 with continued upward pressure on prices.
Why do I think that?…Well, a number of reasons. I have already spoken to several investors who have expressed some concern about the changes to the Residential Tenancy Act next year and how those changes will affect their rights as landlords. I think we will see some of those landlords exit the market which will keep pressure of the rental prices. Tenants who are unable to locate another rental property may move prematurely into the sales market keeping competition high amongst buyers.
Impact of Interest Rate Rises
Whilst we have certainly seen interest rates rise during 2023, it has had little impact on the local property market. This is for a number of reasons:
- We are still continuing to see a large number of “cash” contracts. For me, 45% of contracts written did not require finance and;
- Those who are needing to borrow are simply changing price brackets if and when interests rates have gone up. What I mean is, if a buyer was looking in the $500,000 range, they may have needed to adjust their budget down to say $480,000 for example but still very much keen to get into the market – I expect we’ll see this continue in 2024.
Sell First or Wait?
The other question that has been a popular is from potential sellers who are keen to make their next move but have concerns about the lack of properties available. The question has been “should I sell first or wait?” which I believe will continue to be a common question as we progress through 2024.
My answer to that is, no matter what the market is doing, as a buyer you will always be in a better bargaining position when you are not subject to the sale of another property, because to the seller, it’s essentially a deal without really having a deal as there is the chance things may fall through. In my opinion, sellers who have the confidence to sell first and purchase later tend to secure properties faster and for reasonable prices as opposed to those who purchase on a subject to sale offer.
So, my comment to buyers considering purchasing in 2024, the best time to buy real estate would have been twelve months ago…the next best time would be today, and the worst time would be to leave it until tomorrow. To those thinking of selling in 2024, supply has never been tighter and demand has never been so high, so if you are looking to sell your home, now is the perfect market to get an awesome result.
If you are looking to either sell or buy in 2024, I would love the opportunity to help you. It’s as simple as a quick call to start that conversation. I look forward to assisting you in 2024.
