Tyson says a warning to sellers is that buyers have become increasingly savvy. They have done their homework before venturing on to the streets and into potential new homes, and they have a complex understanding of value and availability.
This is according to Chris Tyson, CEO of Tyson Properties, who says there are neighbourhoods where stock is still plentiful as the world continues working through the 2008/2009 financial crisis, but well-priced homes have become the latest issue affecting the property market.
“The good news for sellers is that this rocketing interest from would-be buyers shifts the balance of power into their hands again,” says Tyson.
Previously it has been the banks’ reluctance to award home loans that caused a bottleneck in the system. However, he says those tight controls have been eased in recent months, affording more people an opportunity to house hunt and the corresponding issue with stock availability.
“There are indications the stock problems will remain in place for 2016, despite the recent 25 basis point increase in the prime lending rate, and that bodes well for the property market on the whole,” says Tyson. However, he says a warning to sellers is that buyers have become increasingly savvy. They have done their homework before venturing on to the streets and into potential new homes, and they have a complex understanding of value and availability.
“That means the market is unlikely to sustain a rampant hike in property prices, because buyers will not commit, even if they have found their dream home. No-one is willing to overpay for their investments, and homeownership is no exception,” says Tyson. “If reasonably priced, property will sell in a shorter period of time and closer to asking price instead of being on the market for extended periods and selling at a greatly reduced price.”
Another element that will rein in rampant price escalation will be the banks, says Tyson.
“While they have not been as rigid on their lending criteria, the rise in the prime rate will affect their calculations for bond approvals, even if only marginally. The banks will also value the property and lend based on their valuation.”