In this article:
Our take on what to expect in terms of prices, your negotiation position and purchase timing.
After months of a persistent rise, the Australian property has now begun to show the first signs of cooling down. CoreLogic’s recent report states that the national house price index rose by 1.8% over April 2021. This is a sharp decline from the rise of 2.8% in March 2021. Here’s a quick look at what this means for prospective buyers on three important aspects.
Most experts cite pent-up demand on account of the pandemic and fewer properties on the market as the biggest propagators of rising prices. With an increase in number of listed properties for sale, and many first home buyers dropping out of the marketing in the wake of decreasing affordability, the market is now gradually approaching a more balanced position. This however doesn’t imply a correction or any kind of decline in prices. There will continue to be an increase, but the rate of this increase will be a lot slower and manageable, giving buyers more room and time to make an informed decision. Irrespective of pace of rise in property prices, it is imperative that buyers don’t give in to the ‘Fear of Missing out’ or skip property due diligence. For more tips on buying property in a hot market click HERE.
The magnitude of blanket relief provided by lenders to mortgage holders has also adversely impacted the number of properties being listed for sale resulting in a sizeable gap between demand and supply. With mortgage deferrals coming to an end and a sharp increase in property prices, many owners have become incentivised to sell their property. A larger property pool puts buyers in a slightly better negotiating position.
#3 Purchase timing
Despite several reports on the change in property prices, timing the market is extremely challenging. Proceed with a purchase if
- You are ready for the financial commitment
- You have found the right property that offers you great value in accordance with
- Your Budget
- Capital Gain expectations
- Rental Yield expectations
- Risk Appetite
- Your lifestyle needs
To know more about ‘How to value a property in a hot market’ click HERE.
For ways to get onto the property ladder faster click HERE.
Seek professional advice to make informed decisions. For your home loan (an extremely important aspect of your property journey) engage a mortgage broker. Lenders pay mortgage broker upon settlement of a loan. Their services are therefore usually free for borrowers. In addition to scoping the market on your behalf for the right product and guiding you on your mortgage strategy, your broker will also handle all your paperwork and keep you posted at every step of the application process.
Reach us for the best way forward as per your circumstances.
The information is a compilation from various sources for your benefit and should not be relied upon in lieu of appropriate professional advice.