With property prices declining in many parts of the country, and many people’s borrowing capacity falling as well, this is a different market than we’ve seen in many years.
So here are some important tips around buying, selling and securing finance right now.
Buyers
Buyers are usually the big winners in falling markets, because they generally face less competition and can score better deals.
During downturns, the number of for-sale properties generally rises. Unsurprisingly, then, property listings in December were 4.6% higher than the year before, according to SQM Research. That means now could be a good time for you with more choice and greater chance of securing a bargain.
First-home buyers
If you’re a first-home buyer, you may be able to take advantage of federal and state government housing incentives. Reach out if you’d like me to explain which ones you might qualify for.
Relocators
If you’re moving home – whether you’re upsizing, downsizing or ‘same-sizing’ – think carefully about the order in which you do the two transactions.
In a falling market, it is worth considering selling first (when prices are higher) and buying second (when they’re lower), however keep in mind you may need interim accommodation between the two.
Upsizers
A falling market can be a great time to upsize. That’s because while you have to sell your old home for a certain percentage less, you get to buy your new home for a similar discount. That can lead to an overall ‘profit’, because the dollar saving on buying a dearer larger home is often greater than the dollar loss on selling a cheaper smaller home.
Sellers
If you don’t need to sell, now may not be the best time; instead, it may be better to wait until prices are rising again.
If you do need to sell, it’s vital you price your home accurately. In December, the number of old listings (those that had been on the market for more than 180 days) was 14.3% higher than the year before. Why? Well, according to SQM: “As there remains more sellers than buyers, dwellings on the market that are not priced to market, don’t sell.”
Finance
As interest rates have been rising, the average person’s borrowing capacity has been falling. My strong advice is to contact me before you begin your property search, so I can test your borrowing capacity at different lenders (it varies from bank to bank) and organise a pre-approval for you. That way, you will know your budget before you start making offers.
If you’re moving home and want to buy before you sell, I can help organise a bridging loan for you.
