MATUSIK PROPERTY CLOCK

Dec 07, 2017
Michael Matusik

Overview  –  A market’s position on the property clock is based around the strength and direction of several key real estate indicators.  These indicators include:  

Sales volumes, price and rent momentum, underlying housing demand, new and existing dwelling supply, employment generation and buying/rental affordability.

There are four phases to the Matusik Property Clock:

  • Recovery
  • Upswing
  • Downturn
  • Stagnation 

Recovery phase

This phase is mildly favourable to sellers.

  • Sellers should expect a quick sale; especially if the property is well priced, presented and marketed.
  • Buyers need to make sure they don’t overpay, but they can miss out if they take too long.
  • Renovators need to understand the market’s limits. Overcapitalisation often happens in recovery locations.

Upswing phase

An upswing market is a seller’s market.

  • Sellers can expect a quick sale, especially if product is well priced, presented and marketed. Second or subsequent buying offers can often be better than the first.
  • Buyers need to make sure they don’t overpay but buying decisions often need to be made quickly.
  • Renovators, again, need to understand the market’s limits. Over-capitalisation is very common in upturn conditions.

Downturn phase

A downturn market is often a buyer’s market.

  • Sellers should not expect a quick sale. First offers are often the best.  It may be best to delay selling until market conditions improve.
  • Buyers can take their time and make hard offers, especially when buying with limited or no contract conditions.
  • Renovators might need to hold an asset for considerable time. Renovate for rental return first, resale uplift second.

Stagnation phase

A market in stagnation is a balanced market – where one can sell and buy at similar value.

  • Sellers can sell quickly if product is very well priced, presented and marketed.
  • Ironically, buying decisions often need to be quick for well-priced and/or recently renovated property.
  • For sellers, first buying offers are often the best.
  • Some form of renovation is often needed to attract interest to a property.
  • Renters can still negotiate a better lease or premises

Capital city positions

Below is our take on where each of the capital cities is positioned on the property clock, as at late 2017.

Recovery phase

  • Adelaide houses
  • Hobart houses

Upturn phase

  • Brisbane houses
  • Canberra houses
  • Hobart apartments
  • Melbourne houses

Downturn phase

  • Brisbane apartments
  • Melbourne apartments
  • Sydney houses and apartments

Stagnation phase

  • Adelaide apartments
  • Canberra apartments
  • Darwin houses and apartments
  • Perth houses and apartments

Queensland property clock positions

Our new two new Queensland outlook reports outline what we think will happen across the state’s 22 major urban areas next year, including current, and likely property clock positions, by late 2018.

For our South East Queensland Outlook Report – go here.

For our Regional Queensland Outlook Report – go here.

Contact us if you wish to buy more than one report.  20% discounts apply for multiple report purchasers.

Until next time,

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Michael Matusik

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