This is a question which many sellers have been faced with when selling a property.
How is it that my property has not sold for the asking price, yet “that” property which is similar has sold for more?
What is it that differentiates properties? Here are some factors to consider when you are faced with this question.
Interest rates and a specific time of the year are some factors which determine the price of a property. Then we need to look at location, what the property offers and the state of the property.
It is a fact that every suburb has a ceiling, an upper and lower limit in value. A very important factor to bear in mind in this is when you consider renovating or extending your property. You could inadvertently be out pricing your property. The result of this is a property that will not sell easily. It could remain for sale until it has “grown” into it's price.
If the property is in a state of disrepair or neglect it will not fetch the anticipated price as I doubt anyone would want to purchase a property he still needs to repair unless it is purchased at a reasonable price to compensate for the state of disrepair and the intention is to renovate and change the property. Another factor which is important to consider is the age of the property, the finishes may not be in keeping with current fashion trends thus rendering the property less attractive. This is true for bathrooms, kitchens, tiles and in some instances even the roof or design of the property. Your property may be a gem but it could, through market trends, not be in fashion any more.
The time of year is a factor in driving property prices. This is also a factor which establishes a trend in the property market. Generally the most movement in the property market is in January. The reason for this is income. Salary increases and annual bonuses are generally paid in December. There is more money available to do things with and one is to upgrade your property. December is thus spent house hunting or relocating to your new property.
Interest rates are a factor in acquiring or upgrading or down sizing property. Lower interest rates mean more cash at your disposal. This should however not be a factor driving your decision to upgrade to a larger property as interest rates are driven by factors which directly impact your income. Higher interest rates equate to less disposable income and could be a factor in you having to down size as it has become too expensive to maintain the current bond repayments.
The location of property is a major factor driving selling and or buying property. Suburbs which are young or where development is showing growth, are generally a good place to invest in. Older suburbs do have movement but not as frequent as emerging suburbs. Crime is one factor which could debase entire suburbs thus driving prices down. Location of property close to schools or major motorways, hospitals or malls could be both positive or negative, depending on the history of the suburb and even the location of your property close to noisy highways.