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The real estate market has been sizzling this past month, particularly in the lower price bracket. First homebuyers have surged into the market, eager to take advantage of the government’s 5% guarantee scheme, which effectively removes the lenders mortgage insurance (LMI). For context, this incentive can save a purchaser approximately $38,000 on a $900,000 property—an extremely attractive proposition for anyone looking to get onto the property ladder.
This boost has created an unprecedented level of competition, with many homes priced under $1 million selling in under a week. It is not unusual to see properties attracting more than 30 inspections and up to 15 individual offers. Consequently, properties in the $800,000 to $900,000 range have experienced price growth of 5 to 10% in just over a month. While this rapid appreciation is great news for sellers, it may not be the ideal outcome policymakers had intended with the government guarantee program.
For sellers looking to upsize with properties under the $1 million mark, this market frenzy presents a fantastic opportunity to maximize returns. If you are considering selling, now is an opportune time to list your property, as buyer demand remains strong and motivated.
On the flip side, first homebuyers should approach with caution. The intense competition and inflated prices mean buyers might benefit from waiting for the market to cool down. Patience could prevent overpaying in this heat-driven market, allowing buyers to secure a better deal in the not-too-distant future.
Interestingly, this surge in entry-level sales has had the knock-on effect of invigorating the upper price bands as well. Properties priced up to $1.5 million, which have historically been slower to move, are now selling more briskly. For those looking to upsize, this is excellent news. Selling your current home in the current hot market could provide significant capital gains that can fuel your purchase of a larger or more suitable home.
In summary, first homebuyers should remain prudent and consider waiting for a market cooldown to avoid the stress of intense bidding wars. Meanwhile, sellers and upsizers stand to benefit from the current momentum and should look to capitalize on these favorable conditions.
Real estate markets can change quickly, and staying informed is crucial. If you have any questions or would like personalized advice, please do not hesitate to get in touch. Real estate guidance is always free, and I am happy to help you navigate these dynamic times.
Stay safe over the festive season and enjoy your family and friends.
