Climbing the property ladder is an ambition that you usually harbour during the good times when property prices are buoyant, your income is safe and everyone seems to be an eternal optimist.
That’s not necessarily the best time to strike out and buy.
Real property gains are made in the hard times when the economy struggles, the property market becomes sluggish and sellers don’t dare hold out for top-of-the-market prices.
Sadly, the coronavirus has proven to be an extreme of these tough times. Predictions of prices falling from their peak are plentiful, and that means there are some good buying opportunities.
This is a buyer’s market
Not convinced? Let’s show you how the current environment might play in your favour.
Your home is worth $500,000, give or take. The market gets sluggish and takes 10% off the value. So, now you’re holding an asset worth $450,000. Not cool, not much you can do about it, but there’s good news.
The million-dollar family home you’ve been eyeing in recent weeks is also a victim of this price correction. If it too fell by 10%, then you might pick it up for $900,000.
In this scenario, your gain is $50,000. Your house is down $50k, but the new home you want has dropped $100k. That’s pretty simple maths.
Fewer bidders to push price up
Ask any agent, and they’ll tell you that mid-range properties can be hard to sell in an unsteady economy. Most buyers in this market segment are worried about their future, or might have even lost their jobs. So, competition for the property falls away.
That makes vendors nervous, and they respond by either pulling their home off the market or seeking the best deal they can get, realising they’re in a buyer’s market.
The market will rebound
As agents, we’ve seen this all before and history suggests you might be able to negotiate a discount, depending how keen the vendor is to move. The lesson here is pretty simple: if you’re looking to upscale, then this is a great time to buy.
Ask your agent about the properties that might move for a competitive bid – but don’t play hardball. Negotiate sensibly and respectfully.
If you leave it too late, the virus crisis will have passed and the property market will likely have bounced back with a vengeance. That’ll leave you paying top-dollar for what could have been very good buying.
