Post-GFC Australia has undergone a property boom (particularly in the capital cities) that meant some aspiring home buyers all but gave up on the ‘Great Australian Dream’ of owning their own home. However, in the last 18 months, there has been a decline in property prices creating more of a buyers’ market, increasing affordability and allowing more people to enter the market, despite the tightening of credit.
Whilst, a softer market does increase affordability, it’s worth keeping in mind, a property is worth what the market at the time says it’s worth – so when the market dips, so too does the value of the property. Thus, it is very rare to purchase something ‘under market value’; despite what the neighbours or well-meaning relatives may tell you.
However, it is entirely possible to buy a property at what you consider to be a bargain price for the area, property type and size – if you employ the right negotiation tactics and do your research, and get the right professionals on your side. If you’re in a position to negotiate on terms such as settlement periods and inclusions, some sellers, particularly those with high motivation, could be prepared to meet you in the middle when it comes to price.
Currently, it seems like there is less competition out there for properties. This has been the case, after foreign buyers were affected by regulatory changes, and APRA crackdowns and the Royal Commission have impacted the availability of credit for everyone else.
Recent positive developments, including APRAs relaxing of assessment rates, mean that there are more savvy buyers in the market with a keen eye for investment-grade properties, who have their finances set up so they can snap up the right property quickly when it comes along.
So, while you might see fewer people out at about and open homes and auctions, those that still turn up could prove to be pretty stiff competition. Therefore, it’s important you have everything in place to be able to purchase quickly if the right property comes up. This may not be the cheapest, most under-valued property you can find in the current market but spending a little more now could see you enjoying the payoff in years to come.
The team here at Wright Place are happy to provide you with advice on your potential purchase. Good luck!