Perhaps that’s because after having some downtime during Christmas and New Year people have been able to do all the necessary cleaning up, de-cluttering and squaring away of the legalities that need to be sorted before their property goes onto the market.

And that does take more time than you think – and more planning than you anticipated.

So as we now approach mid-March, regardless of whether you’re a buyer or a seller, now is a good time to keep watch on the market to see what sorts of prices are being achieved in the area that you live, or the area you’re planning to live in.

At the same time there is much speculation about what will actually happen to interest rates this year with some analysts predicting that rates won’t actually rise by as much as was forecasted at the beginning of the year.

A number of experts are now saying that the more likely scenario is that rates may rise 1% this year, rather than the previously predicted 2% and this is not only because of any impact that events such as floods may have had but because of various economic factors.

For this reason, March remains an interesting time to watch how that sentiment is affecting property prices and it could provide a decent barometer for the year ahead.

Stay tuned!

And at the moment (notwithstanding we’re coming into the Christmas season), it’s a challenging period to try and choose the right time to sell if that’s part of your game plan.

Auction clearance rates are down and although some properties are selling well above their reserve, others are struggling to even find a bidder.

I’ve heard too many stories over the last year about people who were told their property would sell quickly because it’s a ‘sure thing’ – only to find it still languishing on the market two months later.

And with several rate rises making many borrowers feel a bit cautious about what they are prepared to spend on a property, there are particular price brackets where properties are moving more quickly than others.

But apart from just price, what else do you take into account when you’re weighing up whether or not it’s the right time to sell?

There are three aspects you need to consider:

1. Don’t just look at what other properties have sold for in your suburb, but put into perspective their price bracket, size, proximity to schools and shops, the general style of the place as well as how much maintenance will be needed.
2. How desperate are you to move? If it’s simply a case of feeling you’ve outgrown your existing property, take your time – especially if you know you’ll be in your new home for the next twenty years.
3. Have you already bought elsewhere? If so, given you’ve already broken the cardinal rule of property i.e. try to sell before you buy, can you consider renting out your new property if the market for selling doesn’t seem to be in your favour at the moment.

Generally, there’s no-one twisting your arm to sell a property – so take a deep breath and consider whether its in your best interest to revise your plans.

1. All eyes watching to see what the Reserve Bank does on December 7
2. Watching to see how the major lenders and other lenders react
3. Borrowers looking to see how both standard variable and fixed rates move
4. Existing and potential first home owners watching how the property market in general reacts.

And although the property market is about to go into hiatus for the Christmas/New Year period there’s no question the rate rises already delivered this year have done their job in cooling down the market with lower auction clearance rates and prices, so any further impact for the rest of the year is likely to be minimal.

However the current case of the rate wobbles can be cause for new opportunity as rates have time to settle into their new levels for the next two months until the Reserve Bank meets again in February.

In fact, it’s a perfect time to watch what has happened to all rates over this year and have a look at the new playing field that has opened up for the benefit of borrowers.

It’s a buyers market.

Whatever the reason you decide you want to up sticks and move houses, you would do well to remind yourself that the cost to move homes doesn’t simply start and finish with the difference it may have cost you to upgrade to new digs.

That’s because the cost of moving can be surprising, unless you’re well prepared for it. Of course, this will vary depending on your individual situation, but costs can add up to around five per cent of the actual purchase price of a new home.

So if you are moving, consider the following potential costs in your budget:

Real estate agents fees

When you sell your old home the agents fees can vary greatly and can range from anything between 1% and up to 5%. And in some instances you can also expect to have additional advertising costs on top – which is why it pays to shop around for agents who can genuinely offer you the best all-round deal.

Stamp duty

If you’re moving to a new home you’re unlikely to be eligible for first home buyer stamp duty concessions, so the cost of stamp duty can be hefty. The amount will vary from state to state and on the cost of the new property and is usually the second biggest cost in buying a new home, after the purchase price.

Solicitors or Conveyancing fees.

Unless you do it yourself you will need to account for these for both selling your old property and buying the new one. Again the fees can vary greatly.

Removalists costs

Hunt around and compare costs between companies as these can fluctuate markedly depending on the size of the move and the kind of service you use. Some companies provide you with a choice between a flat fee or an hourly rate when quoting. Either way, it can be as high as $5,000 for a big move or less than $500 if you hire a truck and do it yourself.

Loan costs

If your loan is portable you may be able to take it with you, but there’s still likely to be valuation and legal fees for the new property. Likewise if you’re refinancing or taking out a new loan, you may be liable for application fees, legal fees and valuation fees – as well as any costs for discharging your previous loan. Finally, depending on your circumstances you may also have to pay for lenders mortgage insurance, if you’re borrowing more than 80 per cent of the value of the new property.

Bridging Finance

If you buy your new home before you sell your old and there is a period in between where you are technically in ownership of both properties – you may need to apply for and pay for bridging finance until your old property is sold.

Building and pest inspections

Seen by many as an essential cost where costs can vary depending on the inspector and the size of the home.

Property Improvements

This is an open chequebook situation and will vary according to whether you think you’re going to get a return on your investment in terms of a higher sale price from the work you put in. You may also need to make essential changes to your new home as well – if there are major maintenance issues.

So with a few words of caution and in the wise words of my mother – remember to remove your rose-coloured glasses when you’re looking at any property as the emotional connection you create, may end up costing you serious money. 

This is because there are properties with good potential and potentially good properties – but it’s working out the difference between the two that can help save you time and money. 

I deem properties with good potential as ones that may need some work but currently come across like someone who needs a cosmetic makeover and some TLC. 

And as for potentially good properties – I categorise them as ones that could be ‘potentially good ‘– were it not for that wall that’s falling down, or that kitchen that reminds you of the war or those floorboards you just put your foot through.

 That’s because these items, as well as bathrooms, electricals and roofs are the sorts of features on a property that unless you are confident in your building and renovation experience, are not items that are simple and cheap to fix up or replace.

 So while DIY shows can happily show us the way to achieve the look-for-less, you do still need to remember that there are some aspects to fixing up a property that are best left to the professionals.

 And if you’re heading out now to look at properties that you think may fit into your dream home category – make sure you leave your rose coloured glasses at home and enlist the advice of trusted friends and professionals.

 Better still – invest in that highly recommended building inspection so you can get a professional opinion from someone who may have clearer vision than you.

 And finally, whether you intend living in the property yourself or renting it out – if you do find yourself falling head over heels in love with it, do what you would with any prospective suitor and look as what else it has to offer!

 Look at features such as rental yields, the population growth for the area, the quality of local infrastructure and what the property can deliver you in terms of price growth, because the lure of property, like beauty, can also be skin deep – and consequently may not stand the test of time.

While auctions account for less than a quarter of all dwelling transactions nationally, Cameron Kusher, senior research analyst at Rpdata.com says, “auction clearance rates provide an excellent indication of current market sentiment; the results are more timely than private treaty results which are subject to time lags.”

RP Data is leading the way in collecting and recording capital city auction results. While competitors collect on average 65% of auction results, RP Data dominate at 80%. 

The latest figures from RP Data show that the recent number of properties sold in auctions have significantly dropped the last few weeks.

The fall in auction clearance rates has been led by Sydney and Melbourne which are the two largest markets and also the two best performing markets. Eight weeks ago, Melbourne recorded a strong clearance rate of 85.3%, last week that had dropped to 69.4%.  Similarly Sydney, recorded 73.7% clearance rate eight weeks ago, and dropped to 63%. At their peak, clearance rates hit 45.6% in Brisbane, 77.8% in Adelaide and 65% in Perth. Last week, these cities achieved 32.5%, 51.4% and 14.3% auction clearance rates, respectively.
 
Kusher says, “We’ve been suggesting for some time that the rate of property value growth will slow in 2010. It seems as if the recent weakness across auction clearance rates, along with a number of other less buoyant housing sector figures, may be providing the first signs of a residential market slowdown.”
 
Despite auction clearance rates easing, the total number of auctions taking place has remained very strong. Kusher points out that there is “obviously, no shortage of willing sellers in the market.”

Source: Rpdata.com and Your Mortgage

Mr Graham believes the coming year will see upgraders stepping up to fill the demand gap created by the decline in first home buyer activity since the federal government’s boosted first home buyer stimulus was withdrawn. 

In the case of those in the market to upgrade, many have equity from selling their previous property in the first-home buyer frenzy or turning their current home into an investment property to fund the upgrade purchase. 

This along with the decreased encouragement of low rates and government grants have contributed to knocking first home buyers out of the market because of a lack of property affordability. On top of this, recent rate rises and the expectation to get a loan with less than 10% deposit are also contributing to market entry discouragement and lack of affordability for first home buyers.

According to JP Morgan and Fujitsu, Current first home buyers are committing 34 per cent of their after-tax incomes to servicing interest payments on mortgages, compared to 24 per cent for typical borrowers. They are borrowing about the same as other borrowers (around $280,000) but their loan to valuation ratio is higher.

So if interest rates increased, which is the case in some interest forecasts, first home buyers will be committing 39 per cent of after-tax income to loan servicing.

Nonetheless, it is predicted that the first home buyer sector will remain strong throughout 2011 despite of the withdrawal of the first home owner grant boost and recent rate rises.

According to QBE LMI’s mortgage update report, compiled in partnership with BIS Shrapnel, more than 110,000 loans will be written for first home buyers in 2010 – a healthy 27 per cent above the low point of loans to first home buyers in 2003/04.

“The research by BIS Shrapnel shows strong population growth in the first home buyer cohort (25 to 39 year olds) totalling 3.2 per cent over the three years to June 2012. The solid growth in this age group will result in a bigger pool of first home buyers in the market which will support demand in the future,” Mr Graham said.

Have a read through and cast your vote on the blog poll or comment your thoughts below – we want to know:  Would you rent as a lifestyle choice or would you prefer to live in a home that you own?

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“But that is not correct, affordability in the housing market is not deteriorating rapidly, average house prices are not seven to eight times household incomes as is often quoted,” he says

According to their research, in 1993, the average first home cost between two and three times the average household incomes.  Ten years later the ratio increased to only about four times – which has remained steady in the last seven years.

While this is not being disputed by Senior Economist, Ben Phillips from the Housing Industry Association – he does however have a different take on this.  He claims that “House prices have about doubled in recent years and incomes simply have not kept up, especially for first home buyers.”

The Housing Industry Association research has shown that about two thirds of first home buyers are under 35, which in 2001 was more than three quarters.  Phillips says, “First home buyers need a much higher deposit and they need to be able to afford much higher repayments than in the past,” confirming that affordability is getting worse.