If you already own a home in Sydney’s eastern suburbs but want to move into somewhere with more space, the strength of the market can be more of a challenge than a benefit.
Owning in Sydney’s east is a huge asset, but how do you make the most of your sale to buy bigger while staying in the area you truly want? We take a look at some of the key market factors that apply eastern suburbs upsizers.
Moving from the $1.5 million to the $2.5 million bracket
As our eastern suburbs market snapshot for 2017/18 shows, younger families are often those aiming to buy larger terraces or semi-detached homes priced between $2 million and $3.5 million. Their current property could be an apartment or terrace that will tend to sell for under $2 million, leaving a large financial gap to contend with.
The good news for this particular group of upsizers is that they are rarely competing against those older buyers who have more financial flexibility – this group are usually looking for the lifestyle benefits of owning luxury apartments or terraces with less upkeep. That said, competition from similar buyers means buying back into the east within this price bracket is still highly challenging.
As with any real estate transaction, market knowledge and expert advice are key to upsizing in a way that meets both your personal and financial goals. Our primary advice to upsizers is to remain open to properties just outside your most desired locations with the knowledge that they may become more sought-after in future.
Managing the prospect of interest rate rises
In 2016, the ABS put the median monthly mortgage payment across Sydney’s eastern suburbs at $2,900, against a median weekly household income of $2,163. So it’s clear that many homeowners across the east are already paying a large percentage of their income towards the cost of their mortgage, which means high exposure to any rise in interest rates.
With many financial forecasters agreeing that interest rates could begin to rise again in 2018, the thought of having to borrow more to cover the cost of a larger home in the east can be a huge concern for upsizers. Here again, it’s important to gather as much information about your target markets as possible to make the right financial decision. It’s also worth considering the cost of making your move sooner, versus waiting for a possible change in the market that could put you at a bigger disadvantage.
Which market reports should you pay attention to?
Real estate reporting can be a source of stress when making your decision to sell in the eastern suburbs. News outlets are quick to respond to factors like minor changes in auction clearance rates or signs that Sydney’s median prices may be beginning to drop. When reading these kinds of reports, it’s important to remember that:
- Sydney is made up of many real estate markets, including many micro markets in the eastern suburbs.
- Each of these markets has its own set of prospective buyers who have particular requirements and concerns – their actions may not follow broader real estate trends.
If upsizing in the east seems beyond reach, it’s important to discuss your situation with those who know the market. To get expert advice on making this move, talk with our team today.
Sydney’s Eastern Suburbs Market Snapshot
A detailed annual assessment of the property market focusing on the Eastern Suburbs of Sydney, Australia.