Buy now or wait? That is the question that I hear regularly from clients who read that the property market has peaked (and could even fall).
This week, the country’s auction clearance rate was a healthy 72 per cent, with Sydney at 72.8 per cent and Melbourne a very healthy 74.1 per cent. Given that there is now a large supply of properties on the market for sale, these figures indicate that there is still strength in the market.
And, given that some analysts are predicting prices to fall, these figures look pretty good – although a long way from the peaks of almost 80 per cent earlier this year.
Certainly it’s hard to see the market achieving the rates of growth it has for the past years (and already the mining states are pretty pessimistic). But owner-occupied lending rose 6.1 per cent in August, more than offsetting any slowdown in investor lending.
So what do buyers do: take advantage of the fact that there is now less competition; or wait to see if prices fall?
Australia’s property market is now worth $5.76 trillion. It comprises 9.53m dwellings at an average price of $604,700. According to the Australian Bureau of Statistics, in the last financial year, every capital city increased in value (except Perth and Darwin). In a market this size there are bound to be hotspots and areas of decline – only a fool would assume the only way is up (or the only way is down).
But, if you do your research, you can identify locations and properties with sound fundamentals whose value will at least hold and probably go up.
And, given that the market is less frenzied than before, home buyers increasingly have the luxury of time to do their due diligence and negotiate a fair price.
Good mortgage brokers have access to lots of data that can help you research the value of a property. Many also have relationships with buyer’s agents who can negotiate on your behalf.
So what are you waiting for?