| Should You Sell Your Home During a Recession?

It appears that Australia is heading for a recession due to COVID19. Whether you’re currently trying to sell your home or considering putting your property on the market soon.

Here are a few factors to keep in mind:

What Happens to Home Prices During a Recession?
It is no surprise that in an economic downturn, homes tend to sell for lower prices.  An easing of prices may be the norm in an economic downturn, but it is not always as simple as that.

There are a number of factors that influence property prices. A stabilising effect can be that there is less inventory (supply) which reduces large price falls.  A recession caused by a virus will likely be different than one caused financially. Although we are in uncharted waters and only time will tell. Also households with incomes that have remained stable can take advantage of incredibly low interest rates. It’s common knowledge that the value of property grows overtime.

Is Now the Right for You?
Recessions bring fewer buyers and an easing in home prices. if you don’t need to sell, it might be a good idea to wait until the economy improves.

Although some people just must sell. They may need to move because of a job transfer, family circumstances or financial pressures. So it is more about a personal decision and less about trying to time the market.

You need to focus on how you can add value to your home and maximise your sale price. (Read our article about selling in a buyers market).

How to price a house during a recession
In most markets – But especially in a recession, you need to be realistic about the potential sale price of your home. During a recession, often the major reason a house doesn’t sell is to do with an inflated price. You need to be far more realistic with your pricing strategy in recession than in a booming market.

If your home is priced correctly, it will sell.

Add Value
Try and add as much value as you can to assist in bringing your home up. There are many inexpensive ways to add value to your home. quick fixes can be the most cost effective.

• Declutter
• Clean Clean Clean
• Fix broken fittings and damaged walls and floors
• A quick paint can totally change the feeling
• Create outdoor living area
• Add new kitchen benches and handles
• Paint the front door
• Clean up the garden and front lawn

Make Your Home Move-in Ready
During a recession, cash-strapped buyers will not only be price-sensitive, but also reluctant to buy a renovator or any house that needs a lot of work.

Use some of the adding value ideas above to make your home easy to just move in and live.

If you must sell your home during a recession, buying  another property in the same easing market may well be a wise move.