The reason is that the tempo of sales for lower priced property is strong and the higher you go in property values, the slower it is. Whilst this is always the case, it is particularly so at the moment because the demand doesn’t seem to have percolated upwards significantly yet.
Most importantly, a market of this nature minimises your funding gap whereas a boom market tends to do exactly the opposite.
Here’s what we mean….
Let’s assume you sell your existing home for $450,000 and buy a larger property for $650,000. The gap to fund will be $200,000.
If you hold on and decide to make your move when the market is up 10%, you
will get $495,000 for your property, and have to pay $715,000,000 for the new
property, increasing the funding gap by $20,000 to $220,000.
Furthermore, you will pay more stamp duty and other costs.
If past experience is to act as a guide, it’s likely the higher priced property will appreciate more in a boom market than the lower priced home, to further increase the gap.
So, if you have sufficient equity for upgrading, now’s the time to be doing it.
If you would like an assessment on the likely price your home will fetch in the current market, why not call us? We’re happy to help.
One thing you should always be conscious of: good investors generally make their profits at the time of buying, not necessarily when selling.
We frequently come across people who wished they hadn’t made their move at the height of a property market boom, hence the reason for making the point: there’s some good buying opportunities in the market right now and these opportunities will not last forever.