How selling in a falling market can help you achieve real estate goals
Many of Australia's capital cities are currently facing stagnant or falling house prices. While this can seem scary for a prospective seller, it can work in your favour in some circumstances. Her are some of the reasons it can be great to sell in a falling market.
A lower supply of properties
In Australia, many people will hold onto properties in a falling market, not wanting to crystallise losses on property. This can lead to a lower supply of properties, which in turn can speed up the selling process if you are eager to sell. For some buyers, this faster selling time can be very useful. For example, if you are going through a divorce settlement and both parties want to access funds to buy new properties or you are in the middle of a move overseas or interstate, you likely want to sell your property fast.
Cheaper to buy new properties
For people who are looking to sell one property and buy another one, while they will receive less for the property that they are selling, it will also be cheaper to buy the new property. This can make it easier to buy the next property and either get a larger house or release much-needed cash, which can be used to supplement income. This can be very useful for young families upsizing as well as older people looking to downsize out of their family homes. In most locations, government stamp duty is also levied as a percentage of property sale prices, so lower prices also reduce the associated government duties.
Limiting your losses
If the market is stagnant or falling and you don't need to repurchase quickly, it can often be a good idea to sell quickly and place your money into cash or shares while waiting for the market to show some signs of recovery. If you can recognise the signs that the local market is starting to stall, then you can often limit your losses and consolidate your equity so that you can buy in again after the market has bottomed. This can allow you to make the most of your equity and maximise the amount and value of real estate that you own longer term.
If you are looking to sell a property in a falling or stagnant market, it is a good idea to get some advice from an experienced real estate agent, so that you can get the fastest sale and maximise the final sale price.