With property prices tapering since their peak last May, new data from the Australian Bureau of Statistics shows buyers have a rare opportunity to capitalise on the current sentiment in real estate.
New loan applications for all housing fell 3.7% at the end of last year, according to the last figures from the ABS. New investor commitments edged down 3.6%
Additionally, owners are looking to ease mortgage costs as the Reserve Bank of Australia (RBA) uses rates to dampen Australia’s 7.3% inflation rate. The ABS says the value of owner-occupier refinancing rose 9.1% to a new high of $13.4 billion in November.
First-home buyer loans were down 16% on pre-pandemic levels and half of the total registered at their highest point last January.
As an experienced local agency, we see a silver lining for first-time buyers, and owner-occupiers seeking to climb the property ladder.
Firstly, the barrier to entry is falling.
Secondly, upgraders can position themselves to gain a greater dollar discount on their next home than any reduction they might see from the sale of their current property.
The question is, are you serious about purchasing your first, or your next property?
If so, now is the time to double down on your research, talk to agents and make a move before interest rates stabilise and property prices start increasing again.
Below, we’ve listed some ideas for how you should respond to the current situation. We hope you find them helpful.
Cash is king
Regularly communicate with your broker or lender. Seek a pre-approved loan but be aware that the fiscal goalposts can move on you. It’s a pretty fluid time right now.
Talk to agents
Researching online is great, but you can’t beat the judgement and knowledge of agents, regardless of whether you’re buying or selling. They’ll know the price trends locally and may even have a couple of off-market properties for you to consider.
Level head
A key element in any loan application is a lender’s agreement that you’re not overpaying. So, no matter how much you love a property, keep a level head about market values.
Be realistic
Don’t lowball your bids and offers. Generally, owners are not sufficiently stressed financially to be desperate. If you find a property you love, put in a reasonable offer but leave headroom to negotiate.
Cheap trick
Don’t buy a property because you think you can get it cheaply. Unless you’re prepared to flip it; that is, re-sell in the short-term. You’ll soon regret buying a home that you only liked because of “the deal”.