A few weeks ago we predicted that house prices in Elanora had peaked. And, if you have been following market trends you would see that the median house price has been fairly stagnant over the last few months. Today, we look at what the current market conditions mean for owner-investors in the area and ask whether now would be a good time to sell your investment property.

The 2 main factors affecting an investment property’s return are rental yield and capital gain. If the goal of your investment strategy is to maximise your capital growth, then it is essential that you sell your property at the right time.

Property cycles

As an investor, you would be aware that the property market tends to be cyclical, and while there are stages of growth, the market also goes through periods of stagnation and even decline. The trick is anticipating the period of decline and selling your property while the prices are still buoyant.

Neighbouring suburb demand

Elanora’s neighbouring suburb of Palm Beach is going through something of a boom at the moment. There has been a lot of interest from developers and there are a number of construction projects underway, with more in the pipeline. The promise of infrastructure upgrades—like the G:Link tram—and the availability of new, luxury developments is drawing more buyers to Palm Beach. This is likely to have a negative impact on properties in Elanora, with potential buyers bypassing the suburb in favour of purchasing in the more desirable Palm Beach.

National downturn in housing prices

The Australian housing market has taken a downturn, with prices in capital cities dropping by as much as 6% in Sydney. Regional market growth has slowed and this trend is being replicated in the local market with a levelling off of the median property prices in Elanora.

What is more, concerns over the findings of the Financial Services Royal Commission have led to a further cooling of the property market. Mortgage companies have tightened lending criteria and experts fear there will be even more restrictions in the near future. Stricter lending terms will mean fewer buyers and lower property prices, adding downward pressure to already declining property prices.

Taking all these factors into account we believe median house prices in Elanora are likely to drop. For investors, the time to sell your property to make the most of your capital gains is now.

If you’d like to discuss selling your investment property, call Alex or Jason today. With more than 20 years’ real estate experience in the area, we can help you get the best price for your investment.