Property prices are powering ahead as buyers in the autumn selling season continue to display optimism ahead of predicted interest rate cuts in the second half of the year.
In the first 12 weeks of 2024, prices have increased by 1.6%, according to the Home Value Index run by industry researcher CoreLogic.
A rise of 0.6% in March alone represents 14 months of successive increases in property value.
CoreLogic says property prices have totally recovered from the loss from the post-Covid slump, which saw values decline as interest rates increased to fight break-out inflation.
In that period between April 2022 and the following January, values slipped 7.3%. The latest recovery has pushed the Home Value Index 10.2% higher, CoreLogic reports. This represents an average increase in values of $71,832.
Australian property has been recording record highs in average value since last November.
Perth, Adelaide and Brisbane are supercharging value growth while Sydney and Melbourne languish a little.
Melbourne’s market slipped 0.2% in average values in the quarter to March 31. Darwin is also flat, losing 0.2% in March alone.
Despite high interest rates and the cost of living crisis, CoreLogic says the “undersupply of housing relative to demand continues to keep upward pressure on home values”.
The volume of home sales was estimated at 9.5% higher than the corresponding first quarter of 2023, indicating the continued optimism of buyers.
If you’re a buyer seeing prices move higher, these tips may help you find success.
Balancing act
You may need to move quickly to secure your desired property, but speed can lead to poor buying decisions. So, think and plan carefully at every stage.
Loan approval
Find a desirable lender and seek a pre-approved loan. This will help you understand how much money you can spend. It will ensure you’ll also be able to act as quickly as everyone else, unless your rival buyer has cash.
Be flexible
Rising prices may mean you have to reassess your plans. You may have to consider a different suburb or location, or perhaps you should shop around for a better loan deal.
Do your research
Appreciating property values is critical to a good buying experience. Even in a rising market, try to avoid spending above fair value. If you do, you may have to wait a while to sell at a profit.
Think long-term
Consider not just today’s price but also the likely value appreciation of your target property in a five to 10-year timeframe.
No fear
A common buyer trait in a rising market is FOMO – the fear of missing out. Try to quell this emotion when negotiating with the seller. You should always be prepared to walk away.