Realestate.com.au, has conducted a research about buyers and what motivates or stops them from purchasing property in Australia. The company has exposed four of the biggest myths preventing consumers from entering the property market. Property expert Margaret Lomas, from property advisor group Destiny, has urged those looking to buy or sell not to be misled by current hearsay and to take the leap and make the move this autumn.
Research conducted by realestate.com.au1 has identified four common property market myths among Aussies:
1. The time of year doesn’t impact the success of buying and selling property
2. First home buyers are being forced out of the market
3. Properties are currently overvalued
4. Low auction clearance rates mean houses aren’t selling
Myth 1: The time of year doesn’t impact the success of buying and selling property
Consumer research indicates that over half of Australians (51 per cent1) believe the time of year bears no impact on the success of buying and selling property, with only 9 per cent1acknowledging autumn as the best time. However, Lomas claims: “Autumn is most definitely the most opportune time to enter the property market.”
Realestate.com.au data2 reveals March and May were the two most popular months of the year for new property listings in 2011. The site attracted over 7.5 million unique browsers in May last year, the most of any month.
Joanne Whyte, General Manager – Brand, Communication and Insights for realestate.com.au, says that autumn is definitely a popular time for people looking to buy and sell property.
“Our website traffic over the past three years shows a spike of activity in March. Overall, autumn has more new listings than spring, and accounts for almost 30 per cent of total listings during the year3. We also know that there are more people visiting the site and making enquiries on properties, which provides a terrific opportunity for both buyers and sellers,” says Whyte.
Myth 2: First home buyers are being forced out of the market
Over three-quarters (77 per cent1) of first home buyers in Australia believe they are being forced out of the market, yet realestate.com.au data suggests there are more affordable properties on the market now than last year. In 2011, there were 23,000 more properties at $500,000 or less listed on the site, compared to 20103.
Lomas explains: “Today I see many first home buyers entering the property market on a lower rung, as investors first. While many of the more exclusive suburbs of capital cities are indeed unaffordable to the first home buyer, considerable affordability can be found in outer suburbs with excellent infrastructure and in larger regional areas which offer diverse employment opportunities and an excellent lifestyle.”
Myth 3: Property prices are overvalued
Although 61 per cent of Australians1 believe property prices are currently overvalued, Lomas explains that this misconception has been perpetuated by sensational headlines that consider affordability only in relation to yearly household income – painting a largely inaccurate picture.
“We are at a time when housing is the most affordable it has been for a decade,” says Lomas. “From a peak of 34 per cent of the average household income in 2010, average mortgage payments on the median priced home have declined to 32 per cent and are expected to fall beneath the long term average of 30 per cent by early next year4.”
Myth 4: Low auction clearance rates mean houses aren’t selling
While almost three-quarters (74 per cent) of Australians1 believe low auction clearance rates indicate houses aren’t selling, Lomas says the connection that is placed on clearance rates and market health is misleading. When comparing January 2011 to January 2012, there was a slight increase on days on market across the country. Numbers from RP Data indicate houses are selling, it’s just taking longer. In New South Wales, days on market increased by 9 days year-on-year, while days on market in Victoria and West Australia increased by 22 days6.
Lomas reasons that these days, buyers are much more educated and far keener negotiators. “In my experience, auctions merely provide a backdrop against which interested buyers can gauge true market value and later negotiate privately for a sale,” says Lomas. “Few will commit at auction, yet many who attend later use what they witness as a suitable benchmark upon which to carry out successful, private negotiations.”
This autumn, realestate.com.au encourages Australians who are considering entering the property market to challenge common misconceptions and see what the autumn season has to offer. Whyte concludes: “Autumn is a terrific time of year to buy and sell. Whether you’re looking to invest, upgrade or even renovate your property, there’s plenty of inspiration at realestate.com.au.”
“As there is a broader price range of properties available on the market, there’s never been a better time to dive in. With our range of apps and mobile site, it’s easy to get the latest information on property wherever you are and make the search process less stressful.”
(1) Research was conducted by Pure Profile between 17-22 February 2012
(2) REA Internal Statistics, Nielsen Market Intelligence. Jan - Dec 2011
(3) REA Internal Statistics, % of new listings in 2011, Jan - Dec 2011
(4) REA Internal Data Warehouse
(5) ANZ Property Outlook 2012
(6) RP Data Custom Market Scorecard