With the constant inflation and high-interest rates in Australia this year, many aspiring homebuyers are turning sceptical as to whether they should purchase a property in the current cooling market or play a waiting game until the economy shows stability again. In real estate, situations change like the seasons, and just like what you do in every season, you need to have the ability to adapt.
As buyers’ advocates in the beautiful city of Melbourne, we have seen multiple market cycles and different buying conditions. Historically speaking, it’s in times of uncertainty and fear in which savvy buyers make smart decisions, they play the long game of property investment. Over the course of the last two months, we have noticed a drastic change in Australia’s property market and the sentiment on the ground.
More properties are being passed in at auction and it’s become a very price-sensitive market. We are now experiencing what we would call “A Buyer’s Market”, but what is a buyer’s market? To put it simply, it has more to do with supply and demand, less demand and an increase in supply, combined with rising interest rates is denting the confidence amongst buyers. This phase in the cycle will result in house price declines, but the declines will not be equal across the board. Certain markets and asset classes will be more susceptible to declines than others. It’s knowing where to buy well for your borrowing capacity that is a crucial part of buying well in a Buyer’s Market.
Before you step into the window of opportunity, here are some tips on how to buy well in a buyer’s market;
Be knowledgeable on what’s available.
Don’t just buy the first property you see but instead, go house hunting! See as many properties as you can to provide you with a broader view of what’s happening on the ground. Looking through the housing market not only helps find your dream home but also gives you an insight into the property market value which will be quite handy when you’re negotiating the house price. Look for OFF-MARKET properties that are often distressed or in need of work.
Bide your time.
If you’re planning to buy a house during the buyer’s market phase, there is definitely no need to rush in purchasing one. There are more options and less competition so this will give you the upper hand when negotiating if you know how to play your cards right.
Be aware of the days on the market.
It’s very crucial that you know how many days a property has been on the market. The higher the market days are, the higher your chances of negotiating the property at a low price or within your budget. More so, don’t forget to consider the condition of the property. Do your due diligence by doing a bit of research about the property you’re interested in so you would know what other reasons the property is not selling besides the cooling market.
Understand Market Value.
The seller wants to get a fair deal, too. As long as it’s not overpriced given the current market and it stays within your price range, if not a bit lower, then don’t push your price offer too low as it would discourage the seller from selling. Remember, there are also other buyers who are willing to pay a fair price.
Hire a buyer’s advocate or buyer’s agent to assist.
When the market transitions from a seller’s market to a buyer’s market, a buyer’s advocate or buyer’s agent can be your secret weapon to securing an amazing result. The experience of a professional negotiator in a buyer’s market is invaluable. An experienced buyer’s advocate will help simplify most of the complicated decisions, instil guidance in property inspections and do thorough research to support you in making your property goal not only achievable but successful over the long term.
Industry Insider specialises in buying established family homes in the inner 10 km ring of Melbourne, Bayside, and the beautiful Mornington Peninsula.
If you need any assistance with buying, don’t hesitate to speak with one of our Property Buyer Agents on +61 8374 7652 or book a zoom call here
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Founder & Buyer’s Agent
Your Dream Home, Without The Nightmare.