The window of opportunity for home owners who are selling to upgrade to a better property is closing as strength returns to the market according to RE/MAX WA Regional Owner, Geoff Baldwin.
“As the market strengthens some sellers may be tempted to hold out for a better price however this tactic can be extremely costly for those people intending to upgrade.
“While people wait for a buyer to pay a higher price for their current home, the market they intend to upgrade into is also strengthening with the result that the price gap between the two properties widens.
“As an example, if an upgrader sold their current home for say $500,000 to buy an $800,000 property today then the gap is obviously $300,000 however if market values lift by 5% then the gap between the two properties will also increase.
“With a 5% increase the $500,000 property would be worth $525,000 but the $800,000 home would have gone up to $840,000 increasing the gap to $315,000 and costing $15,000 more for the changeover.
“Often upgraders hold on hoping to get more for their current home because they think that it will make the one they are buying more affordable but history shows that this can be an illusion especially in a strengthening market”, Mr Baldwin said.