Winter Pause

Uncertainty Reigns

The real estate market can often take a pause during July and August, however this year there are several extra factors adding to the uncertainty.

For many families the end of the first university semester and the end of the second school term often means travel. Combine this with a northern hemisphere summer and many Australian households are too distracted to think about property.

However, this July we also have several other major issues overhanging the property market and giving all households (renters, buyers and sellers) even more reason to hit the pause button.
One of the biggest uncertainties is what the regulator will do about slowing down lending to investors. Will investors soon need to have a bigger deposit?

Another issue is the ongoing international uncertainty. How the European crisis will play out during the coming months is almost anyone’s guess, but in the meantime it is causing widespread doubt across financial and currency markets.

A falling Australian currency is also making our real estate a cheaper option for overseas buyers and investors.

At the same time, however, property sales are lower in volume. This can be taken two ways; Lower volumes can help push up prices because there are less properties available, however it can also mean less options for buyers, many of whom will not compromise if the right property is not in the mix.

What is certain, amidst all this uncertainty is that these factors are providing people with reasons not to make a decision. It’s much easier to do nothing until things improve or become clearer.

While this pause is understandable, if not part of the annual cycle, people still need to be prepared to move fast when the opportunities present.

Until next week,

Jock Bing