There may be a variety of reasons to upsize your home. Your family is growing and you need more space. The children need a bigger backyard. You are looking for a better property with stronger long-term capital growth prospects. But it is not always easy knowing how and when to upsize, especially throughout the Eastern Suburbs, Inner West and Lower North Shore where larger properties tend to be scarce and highly sought after. When you're trying to find the smart way to upsize, there are a few important things to consider.
The Right Time
The Housing Market in Sydney has taken something of a hit recently : https://www.smh.com.au/business/banking-and-finance/house-prices-have-biggest-drop-since-gfc-amid-warnings-of-credit-crunch-20181001-p50729.html.
Between December 2017 and January 2018, Sydney property values fell at a monthly rate of 0.9 per cent, 0.6 per cent in February and 0.3 per cent in March. The drop in Sydney is now at 6.1%, the biggest yearly median price fall in Australia since 2009.
The price fall can be attributed mainly to the tighter lending restrictions which have limited the amount buyers can borrow. On average, buyers can now purchase homes for an average of $50,000 less than they would have paid almost a year ago. Housing experts believe that prices will continue to dip into the first few months of 2019.
Ironically, this makes the current market possibly the best time to invest in upsizing. It may initially seem that selling your existing home when the market is in a trough is a poor plan but it could actually present the best opportunity to upsize. Regardless of how much money you may lose in selling your existing house, the drop in value on the larger home may be more significant meaning that overall, you could be in a much better financial position when you upsize in a softer market.
While the market may be down now, it will swing back up at some time in the future. That may just be the time when you need a bigger home and you may find it harder to upgrade at that point in time. So when it comes to upgrading, plan well ahead.
Don’t Waste Time
If you’re planning on waiting a while, just remember that the numbers are constantly fluctuating - you might need to act sooner than you think. Property data company, CoreLogic-Moody, predicts growth rates of 0.6 per cent for houses and 1.8% for units by the end of 2019 and 3 per cent for both houses and units in 2020. A long pipeline of infrastructure upgrades are said to fuel the rebound in property values by then while boosting incomes and encouraging further population growth at the same time.
It can also take a very long time to find the right property for your needs – if you start now, you may find the right one by the middle of next year! On the other hand, if you delay your purchase decision too long, you may find yourself buying in a rising market.
For those who are ready to upgrade now, it is likely that you’ll be capitalising on the best purchasing conditions in at least six years. With a combination of decreased property values and built-up equity, Sydney upgraders could be in the best financial position to upsize.
The Right Location and the Right Space
Don't base your decision to upgrade on price alone. Upsizing is an important and serious step forward, and if you want to be maximizing the best use of your time, money, and resources, make sure that you're visiting and learning more about the area you're moving into first. Always pursue the right space for your needs, both now and as your family grows or changes in the future. When checking out properties for sale, remember that most are styled and presented in the best light. Consider how your family will actually make use of the space; are the rooms large enough; and are there enough storage areas?
Grabbing the Right Opportunities
Upgrading in the current property market requires strategy – it’s more than just the numbers. By hiring a professional buyer’s agent, you will gain a better grasp of market conditions and the local area as well as social and environmental factors that impact upon properties.
At Buyers Domain, we have the knowledge and experience to help you navigate Sydney’s property market. We’ll guide you through the whole process and ensure you’re happy with your purchase. With us, you’ll make smarter decisions and invest with confidence.
Call Nick Viner today on 0405 134 645 for expert advice on properties in Sydney.