There are many external factors at play when buying, selling, or renting property. Consumers need to be aware of these greater property market trends to plan for how the conditions will affect them.
There are two main ways to describe the condition of the property market, namely whether it is a seller’s market or a buyer’s market. Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, explains that these terms can have a range of implications for anyone involved in real estate transactions.
To elaborate on these implications, RE/MAX of Southern Africa explains how these two market trends will affect buyers, sellers, landlords and tenants:
Buyer’s / Tenant’s Market:
The market swings to the favour of buyers or tenants when there is an abundance of similar homes for sale or for rent in an area. This oversupply will drive down demand and prices are likely to be dragged down along with it. In these conditions, a seller might want to hold onto the current property until market conditions change. For landlords, these conditions make it tricky to charge more in rent, because there are plenty of other rentals available if the current rental amount is not appealing.
Seller’s / Landlord’s Market:
In a seller’s or landlord’s market, there are fewer homes for sale and for rent. This drives up demand which also pushes up asking prices. Buyers will need to act fast and make competitive offers when looking to purchase in these kinds of markets. Similarly, tenants will need to act fast and get their applications in first to make sure theirs is the one that gets accepted by the landlord.
Timing the market
It is challenging to time the market right so that you sell in a seller’s market and buy in a buyer’s market. Goslett reminds homeowners that when selling a home to buy a new home, the advantage from the one market will offset against the other. “For example, sellers might be able to sell for more in a seller’s market, but then they will also likely purchase for more too. Similarly, in a buyer’s market, homeowners might sell for slightly less, but they will also be likely to purchase a home at a better price.”
It is important to remember that each suburb will also have its own micro trends that can either mirror or be completely opposite to greater market trends. While it is easy enough to find out what type of market conditions the country is experiencing as a whole, local suburb trends are best discovered through a conversation with a local suburb expert.
“With access to real time data on the average time on market and price per square meter in the area, real estate professionals can share suburb-specific information that can help consumers to gauge timeframes and possible costs or returns. This information can help buyers, sellers, landlords, and tenants make better decisions when it comes to their real estate transactions,” Goslett concludes.