Traditionally, spring is a popular time to list and buy property.
For sellers, the warmer weather means homes are presented in their best light and for buyers, there are more choices.
This time last year, buyers were in the back seat as the PropTrack home price index showed annual price growth at its fastest pace since 1989.
But what a difference a year makes.
Today, that same index reports that every capital – and recently booming regions – were all in negative price growth territory.
Steve Mickenbecker, Canstar Group executive and financial commentator, said buyers were now taking the driver’s seat.
“I think this spring is going to be quite a buyer’s market. Buyers need to approach it knowing they have a choice,” he said.
“There will be more properties on the market, there won’t be the shortfall that we’ve seen lately driving prices up.
“And there will be fewer buyers.
“The balance of power has shifted and now shoppers know they can enter this buying season without feeling that fear of missing out that has been driving the past two years.”
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NEGOTIATION IS BACK
Reece Coleman, buyer’s agent and head of advice at Maker Advisory, said buyers were regaining control of what was a runaway housing market.
“Buyers have been left on the sidelines and I see no reason to be left on the sidelines anymore,” he said.
A falling market results in sellers accepting more realistic prices, and in many cases these price corrections offset any interest rate increases.
“The current decline in house prices and the ability to negotiate rates now make this one of the best times in five years to buy property,” Mr. Coleman said.
“Sellers are serious about selling their homes and not just looking for a lottery win – and smart homeowners are taking this opportunity to make a move because they can see this is an economic climate in which everything is aligned.”
MORE CHOICES FOR BUYERS
Listing numbers are up and the number of buyers has declined, so buyers face less competition for more inventory. In August, new “for sale” listings in capital cities rose 8.7% from a year ago, while regional areas rose 3.2%, according to data from PropTrack. Total buyer demand fell 6% nationally by the same metric.
“There are definitely more opportunities for serious buyers right now,” Mr. Coleman added.
“Every agent seems to have a pocket full of off-market listings. People have asked agents to appraise their homes, but haven’t necessarily pressed the ‘go’ button until they see how the spring market is going. So my advice would be to push the agents as they will all have properties that they know are coming to market.
RELIEF UNDER THE HAMMER
AuctionWorks auctioneer Jesse Davidson said fewer serious buyers meant competition was easing.
“Buyers will start to see more options at more reasonable prices. People are realizing now that we are far from sky highs and prices are starting to stabilize. Buyers have a little more power than they had last year, and less pressure with fewer registered bidders at each auction.
Mr Davidson said his auction advice for potential buyers remains the same regardless of market conditions.
“Once you have done your due diligence, then participate. There is never a time when a non-participating buyer can then trade after the auction if there was another bidder.
“That doesn’t mean your first offer has to be the best, but put yourself in the best position to buy the asset. From there, just control your increments and when you reach your limit, stop. With interest rates rising, now is not the time to buy over budget.
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FLEXIBILITY WITH INTEREST RATE
Although interest rates are rising and borrowing power is diminishing, Coleman said buyers should have serious conversations with their lender.
“If a bank advises an interest rate of 4%, a good broker should be able to negotiate a rate up to a level above 3 with that same bank,” he said, adding that buyers should also look for competitive prices. fixed rates.
“The fact that many of the big banks are reviewing fixed rates and in many cases reducing them indicates that they expect short to medium term relief from interest rates. Our advice to clients is not to accept the bank’s first offer on interest rates as they are more negotiable now than they have been for the past three years.
SIGNS THAT WE ARE IN A BUYERS’ MARKET
Reece Coleman of Makers Advisory said many markets are seeing some of the most favorable buying conditions in years.
More realistic prices – The fear of missing something is well and truly over. Buyers have been able to purchase properties recently at the most reasonable prices in months, and in many cases price corrections are offsetting any interest rate hikes.
Fixed interest rates down – Although there was a lot of news about the rise in the official exchange rate, the reduction in fixed-term rates did not make a big splash. Behind the scenes, banks are now offering deeper discounts on advertised rates than they have been throughout the pandemic.
Real estate bounces back – There’s no doubt that prices are falling and will continue to do so in the months to come, but they won’t do so forever. Economists are already predicting the timing of the next recovery. ANZ economists predict prices in the capital will fall 18% next year before rising again in early 2024 starting with a 5% rise.
Rents go up – The good news for investors is that rents across the board are up 7% according to recent data from PropTrack. It is clear that returns in many markets are considerably higher and that these gains will more than cover the costs of rising interest rates for investors.
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Originally published as Real Estate Sydney: Do it now – key signs attracting home buyers