12 April 2024
We often get asked by clients whether they should buy a new property before selling their current one.
It’s a question that involves assessing individual risk appetite and understanding the current market conditions. In this article, we share our insights to help you make an informed decision.
The Risks of Buying or Selling First:
In a strong, rising market, selling before buying could mean losing out on potential gains if you can’t find a new property quickly. Conversely, in a declining market, buying before selling puts you at risk of having to sell your current home for less than expected.
The key is to minimise risk by aligning your buying and selling transactions as closely as possible, or to buy and sell in a balanced market where prices are relatively stable.
Current Northern Beaches Market Considerations:
Our property market is closely linked to interest rate behaviour – as rates go up, prices tend to pull back, and vice versa. Understanding these market conditions is crucial when deciding whether to buy or sell first.
After experiencing significant price increases post-COVID, the upper Northern Beaches market has stabilised. Interest rates have remained steady for the past few months, and experts predict they may start to decrease towards the end of 2024. As interest rates pull back, property prices are likely to rise.
Strategies for Hesitant Sellers:
Some homeowners hesitate to list their property because they haven’t found their ideal next home.
To help these clients, we recommend a phased approach:
- Introduce potential buyers and gather offers to establish a baseline price.
- This information provides insight into purchasing power without committing to going to market or a sale.
- If a suitable property becomes available, the seller can proceed with confidence.
In a sideways market like we’re experiencing now, selling first often provides the assurance needed to make a purchase. Thorough due diligence and research into available properties and prices can also alleviate uncertainty.
A Conservative Approach:
Ultimately, the most conservative strategy depends on individual risk tolerance and market conditions. In a rising market, buying before selling can be conservative. In a declining market, selling before buying is often the safer choice.
In a balanced market, the key is to minimise the time between transactions. Being decisive is essential – selling first is often necessary for buyers to know their budget and proceed with confidence.
Navigating the Decision:
Deciding whether to buy or sell first in the Northern Beaches market requires careful consideration of your personal circumstances and a clear understanding of current micro-market conditions.
As your local real estate experts, we are here to guide you through the process and help you make the best choice for your unique situation.
