A few weeks ago, I handled a sale that for me ticked every box for the change in market we have seen over the past couple of years, and last 12 months in particular.
A fairly standard home in Edmonton, well presented in credit to owner, but not substantially different from anything else on the street or in the suburb of a similar vintage. The property last sold just on a year ago, but a change of lifestyle meant that the owner was ready to move on.
Now what difference did 12 months make? The home was still substantially the same, no big renos, no repaint. I’ll tell you - 29%. That was the increase in the price achieved, in literally a year. Must have been a cashed up Sydney-sider paying over the odds, you might think. On the contrary, the result wasn’t even an outlier of the campaign – with 40 plus enquiries, 7 contracts submitted, and 3 of those within a thousand dollars of each other. And of course a healthy mix of investors and owner occupiers, locals and interstate.
With 6 otherwise qualified buyers that missed out, invariably the question is, “do you have anything else like it?” Rewind pre-COVID and you probably could have spun around in a circle, put your hand out and found another one for sale within 200m. Today? Not a one that doesn’t have “under contract” or “sold” on it, with that fact only putting more fuel into the fire.
The level of growth on this particular home is not necessarily typical – but certainly a 10-20% lift at the lower end of the market is becoming more regular. The interesting take away from that though, is what it does for those looking to upgrade, and the flow on effect we see in pricing in other sectors.
When prices have been static, people have generally held longer, choosing to update homes rather than upgrade to the next one, unless family outgrew the space or a downsize became more appropriate. With rapidly increasing equity and a market where renovations are both a time and money intensive exercise, upgrading becomes the more practical avenue, further driving the cycle and the intense frenzy we currently see on most houses between $400,000 and $700,000.
Hindsight on 2022 is going to be interesting – as I suspect we will redefine “expensive” and “good value”, and potentially that the two might not be mutually exclusive.