Homeowners face conundrum over making the first move
To buy or not to buy; that is the question. And if the answer’s to get into the market, then next comes the most critical decision of all – to sell before buying, or the other way around?
Traditionally, it was always sell before buy, since no one wanted to get saddled with paying off two mortgages if there were delays in selling, especially when interest rates were high. In recent times, it became about buying first so you’d never have time out of a rapidly rising market.
But now? It’s a bit of both.
“In this market, I would definitely sell first,” advises Carlie Ziri, director of the Lifestyle Property Agency. “I think you have to be smart about what you’re looking at and property prices are a little bit inflated at the moment.
“In some areas, prices are stabilising and calming down, so I would sell my own home first, put the money in the bank so you know exactly how much you have to spend, then find something to buy with flatter prices.”
On the other side of the equation, however, is Neil Robson of Ray White Gladesville and Ryde. “Buy first,” he urges. “You want to find the perfect property to suit your needs so wait till you find it to put your home on the market. Then ask for a 12-week settlement to give yourself time to sell.
“There’s always going to be a buyer for a property with a good real estate agent that’s well marketed and nicely presented.”
Generally, it all depends on market conditions, and they can vary hugely from suburb to suburb. Real Estate Institute of NSW chief executive Tim McKibbins, says when the supply of properties for sale is low, it’s better to wait and find something to buy first – which may be the more difficult task – before selling yourself.
“So it’s contingent on where you want to buy and where you are selling,” he says.
“There are certainly supply difficulties in some areas, and in some others, like south Sydney, it’s alleged there’s actually an oversupply, so you’d sell there before you bought.
“Also, it’s important to look at price movements. Once prices flatten out, the pressure comes off you to stay in the market; you can sell and take your time to buy, maybe even renting for six months in the interim.”
LJ Hooker head of research Mathew Tiller agrees. “Traditionally, it was sell before buy but then with a lack of new supply and strong demand, with the number of listings a bit tight, it flipped around and we’re seeing the marketing shifting to buying before selling.
“Supply hasn’t kept up with demand, so it’s more about finding your next perfect home and that could be a struggle. But markets will be different for both buyers and sellers.”
Supply is generally quite dramatically down, around 15 per cent, compared to this time last year, believes Domain chief economist Dr Andrew Wilson.
“A lot of the reason is that we had a very high level of listings last year during the boom and buyers brought their demand and supply decisions forward, and some of those sellers from last year are now also still in the market looking to buy.”
But that supply does vary between different areas and nowhere is the difference between supply levels more extreme than the eastern suburbs – down 916 listings from last year – and south Sydney, up 764.
Brad Hillier of BresicWhitney in Darlinghurst says there’s not enough listings in Surry Hills, Darlinghurst, Elizabeth Bay, Potts Point and Redfern, meaning people wanting to move there should buy before they sell.
“But south of Redfern, around Waterloo, Zetland, Green Square, there’s a fair bit of stock on the market, and there’s going to be a lot more coming on,” he says. “So if I had a home there, I’d definitely make the decision to sell and wait until that happened, before I found somewhere to buy.”
Selling first was not an option
When Anne Lewis and her husband Chris started looking for a house to buy in the Blue Mountains, they thought it may take them a while to find exactly what they wanted.
So when they chanced upon their perfect home, they knew they couldn’t wait to sell their own house in the inner west; they had to buy immediately.
“We just looked at each other and said we’ve got to do something now,” Anne says.
“But we weren’t too worried. Interest rates are low so the cost of relocation is less and we knew we’d be selling our current house for more than we’d be buying the new one.”
Thus the auction for their pretty three-bedroom house at 15 East Street, Marrickville, takes place this weekend – the same time as they settle on their new home.
The sale is expected to net them between $1.25 million and $1.35 million through McGrath Balmain agent Cherry Owen (0418 338 388). But now they’re focussing on their next house, with a large garden to keep firefighter Chris, 58, busy, and room for a hand weaving studio for risk engineering consultant Anne, 55.
“So this time we’ve bought before we sold, but I’ve also done it the other way around before,” Anne says. That didn’t work out too well. Twenty years ago she sold her house in Annandale, then was forced to rent for six months until she found a bigger one in the same suburb to buy, and then to rent for a further six months to renovate since it was so derelict.
“But I would feel nervous doing it this way around – buying before selling – if I was buying a house that was going to cost more than the one I was selling,” she says.
“That would definitely be more nerve-wracking!”
Feature property
66 The Avenue, Rose Bay
Guide: $2.6 million
Close to the Rose Bay foreshore and ferry wharf, this four-bedroom, three-bathroom home is bound to excite plenty of interest, says Ray White Double Bay agent Oliver Lavers.
And most of them will probably be home-hunters who’ve already sold their own property and are looking for something extra special to buy. “I always advise people to sell first and ask for a long settlement,” says Lavers (0411 294 232), who’s selling this by auction on June 23.
“That puts you in the right position to buy, knowing how much you have to spend. Otherwise, you can sit on the fence and end up looking for six to 12 months.”
This family house has a light-filled, open-plan lounge and dining area looking through bi-fold doors to a north-facing terrace and garden with heated pool, as well as a rumpus room and study alcove. Features include a gas fireplace and an integrated sound system, while the main bedroom, with ensuite, also has a balcony.
There are high-end finishes throughout, including a kitchen with an induction stove, stone-topped benches, stainless steel appliances, a breakfast bar, ducted air-con and soft-close drawers. All of the double bedrooms have built-in wardrobes. “It’s a beautiful property,” says Lavers.
See more at: domain.com.au/2012827278
Or try these:
26 The Parade, Dulwich Hill
26 The Parade, Dulwich Hill
Guide: $1.05 million
This three-bedroom-plus-study freestanding home has lots of original features including fireplaces, polished timber floors and high ornate ceilings, but also has a modern gas kitchen with a breakfast bar, and a paved rear yard. All the rooms are spacious and light, while train, light rail, buses, shops and cafes are all close by. For auction June 22 via William Pereira of Raine & Horne Marrickville (0400 288 647).
See more at: domain.com.au/2012823286
2/83 Grasmere Road, Cremorne
2/83 Grasmere Road, Cremorne
Guide: $850,000-$925,000
Covering half the ground floor of an art deco boutique block of four, this two-bedroom apartment has a modern timber-and-granite kitchen that opens on to the communal garden. With floorboards, plantation shutters and open-plan living and dining, it’s close to Neutral Bay cafes, restaurants and bars. Auction June 16 via Lesley Crawford, of LJ Hooker Lower North Shore (0411 400 591).
See more at: domain.com.au/2012809379
285 Avoca Street, Randwick
285 Avoca Street, Randwick
Guide: $1.5 million
With great renovation potential, this three-bedroom, two-bathroom freestanding Californian bungalow, with a sunroom, is in original condition. Its period features include high ornate ceilings, lead light windows and a fireplace, while the formal lounge could be turned into a fourth bedroom. It also has a large level backyard. For auction June 18 with Nelson Dueza of Century 21 Classic (0411 837 584).
See more at: domain.com.au/2012823107
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