“People are looking to upsize more than at any other time in the 18 years I’ve been in real estate,” says real estate agent and Clarke and Humel principal Michael Clarke.
“They can’t travel the way they used to, so the lifestyle their home represents has become more important. They are focusing more than at any other time on things to do with the home.”
Growing families with roots in their community are increasingly seeking more space, says Village Real Estate director and auctioneer Huss Saad.
“They just want to stay in the area, so upsizing is the next step,” he said. “We’ve started to see a lot more competition on that type of stock.”
A rising market can make it increasingly tricky to upgrade, putting pressure on home owners to trade up sooner rather than later.
“With sky-high clearance rates, people are worried about the market getting away from them,” Clarke said.
An upsizing home owner may find their buying power diminishing as competition for target properties intensifies.
Increased demand may produce a higher sale price for their own property, but strong competition can push more valuable homes beyond their budget.
Being prepared to act quickly is critical in a rising market, says buyer’s agent and Brady Marcs director Brady Yoshia.
“Traditionally people would sell first, but now, a lot more people want to find something, buy, and then sell once they’ve got the property they were looking for.”
“Because there are not a lot of properties on the market and [there is] huge buyer demand, they don’t want to be caught out in a situation where they sell and don’t buy into the same market.”
Committing to buying a home before selling isn’t an option for everyone, says Saad, but it’s the smartest way forward for others.
“A family that doesn’t have much in savings but a lot of their capital in the home might need to sell it and then buy something,” he said.
“Then you’ve got families who might be looking for about two or three years until they buy something because stock levels are just so low and suitable properties hardly come up.”
A simultaneous settlement allows purchasers to pay for their new home with their current property proceeds, avoiding bridging finance.
“Settlement becomes a critical part of the negotiation process,” Clarke says. “I’m telling all my clients about the importance of flexibility.”
Saad says negotiating a settlement period of at least 120 days when buying and a 60 days when selling is usually sufficient to align dates.
Get ready to go
House-hunting home owners should use their property search as an opportunity to start shortlisting sales agents, so a decision doesn’t need to be left to the last minute.
The difficulty of accurately valuing a property in a rising market means home owners should exercise caution when upsizing, especially when buying first.
“A lot of people are very house proud and think their place is worth a bit more than what the market thinks,” says Yoshia.
“Appraisals could vary by between $50,000 and $100,000. Get a couple of opinions on value, but go and buy a property based on a worst-case scenario.”
Decluttered and well-maintained homes can be listed in as little as a week, Yoshia says, but more time is required for homes that need work.
“It comes down to how quickly a client could prepare the property,” Saad says. “The average time is about two weeks.”
Pre-sale preparation, such as painting, gardening and refinishing floors, should occur before purchasing, and local agents can often put forth reliable tradespeople who can work to a deadline.
“If you’ve bought a property already, you don’t want to be tinkering around the house for a month,” Saad said. “You want to get the work done quickly. Get a professional in, get the work done and get things moving.”