People have been asking lots of questions given the recent property market slow down and I came across this article, which I
think may help to clarify a few things for you if you are looking to purchase a property soon or considering it.
If you don’t want to read the whole article, here is the summary.
Q: What’s happening to property values around Australia?
We’re experiencing a relatively mild downturn considering that nationally house prices are still 31% higher than they were five years ago.
Q: Are house prices likely to fall further, and if so, how long will this weakness last?
While the value of some properties may fall a further 5% in some locations, home values are holding their own and even increasing, in other areas. In other words, our two big property markets are exhibiting a soft landing.
Q: If I’m looking to get into property should I buy now or wait for prices to drop further?
Don’t try and time the market.
The fundamentals of strong population growth, a robust economy with excellent jobs creation and state government infrastructure spending will underpin a property market.
Q: Which segments of the property market are likely to suffer the most in a buyer’s market?
- About 10% of all properties sold sell at a gross loss for their owners;
- Apartments were more likely to sell at a loss than houses, which is most likely due to the high premium many investors paid for their new unit;
- In the last quarter, Melbourne units were 10 times more likely to re-sell at a loss than houses, which was much the same in Brisbane (9 times) and Canberra (8 times) but dissimilar from Sydney and Hobart where a greater proportion of units re-sold for a profit than houses; and
- More regional properties sell at a loss than those in our capital cities.
Q: Do you have any other tips for buying well in a buyer’s market?
1. Firstly, don’t try and be smart and time the market — even the experts can’t time the market.
2. Now more than ever it is important to get a good team around you.
3. Don’t be scared to buy at auction — there is generally less competition nowadays.
4. Be prepared to buy before the auction.