Sudden increases in property prices, such as the one we’re experiencing right now, is not a new phenomenon in real estate. While sellers might rejoice, buyers face an increasing financial challenge.
Breaking into the market for the first time is formidable, and it can be daunting for owners who want to climb the property ladder too.
A red-hot market can blow all your financial assumptions out of the water. The hefty deposit that you’ve saved no longer gets the job done, and you’re tapping the calculator to see how your income can cover payments for a mortgage that you’d previously considered a stretch.
But all is not lost. Opportunities always exists in the property market, and diligent research and focus will eventually uncover them.
Where previously you might have thought your mortgage pre-approval would win the day, you’ll now have to think more strategically and should expect it to take longer to find what you want.
It can pay to work closely with local agents, rather than rely only on internet listings, newspaper ads, or walking past local real estate windows. Many buyers are reluctant to engage with agents, but let us know the type of property you want, that you’re a serious buyer and ready to put your money down. If you sign up to our new listings, we’ll send you new properties as soon as they come onto the market and before they are advertising more broadly.
If you haven’t done so already, you must have your finances lined up. Time waits for no buyer in a hot market. Double-down on ensuring you have all the available government subsidies covered. These will include first-home buyer grants and stamp duty discounts. These are a benefit and a curse. While they boost your capacity to buy, they contribute to the strength of the market.
You should plan your negotiating strategy when an opportunity arises for the right property. Price discounts are almost non-existent right now, averaging just 2.7% across all capital cities. A low-ball bid will take you off the board, so don’t do that.
Many buyers will win a property by offering a shortened or extended exchange period to suit the seller. So, be flexible and creative in your approach.
It’s also important to understand what’s really going on in the market. You can safely ignore most of the headlines on TV and online – don’t let them panic you. Real estate isn’t one market but thousands of micro-markets. We’d be happy to talk to you about local trends and prices rather than have you make assumptions about your target neighbourhoods.
Finally, don’t feel this is a time you should retreat from the market. There is a lot of academic research about the folly of trying to time market slumps and recoveries. If the time is right in your life right now for you to buy a home, stay the course, be diligent and you’ll find your dream.