What the current property market could mean for you
We know that the Australian property market is currently experiencing some changes… with the seemingly daily news reports on the topic, how can we not? With falling house prices in some cities and an almost snail pace price growth in other cities, we’re seeing a lot of ‘clickbait’ headlines trying to predict the next move in the market, and the majority of reports are mostly scaremongering.
There is no need to panic. In fact, the current state of the property market (and the way we can expect the future to go) can present some key opportunities for certain types of people… if they know what to look for. History shows that this is normal behaviour of the property market after a steady increase.
While Melbourne and Sydney are seeing the housing boom pull back and the market begins to cool, it doesn’t mean that all areas are going to follow suit. We’re seeing other major suburbs begin to enter their own growth phase, perhaps slower than our main cities but still growing.
So, what does this mean for you? It depends what stage you’re in when it comes to property…
First home buyers
Our first home buyers should be getting ready. The downturn in prices can present some opportune moments where first home buyers can enter the market. Keeping an eye out for those prime pockets and suburbs that will be hit harder with the correction means properties can be purchased at a better value than we’ve seen in the last few years.
Dropping auction clearance rates also allows buyers an advantage, if they’re prepared for it. The lack of competition at some auctions presents opportunities to negotiate on price in ways that weren’t possible during the boom. By preparing themselves with a rock-hard savings plan to achieve as high a deposit as possible, first home buyers are in the prime position to benefit from our current market state.
Though first home buyers have a great opportunity coming to them, investors don’t need to wait for a different market to invest in property. The key to getting into a challenging market when investing is to play it safe, don’t risk your savings, and don’t go out on a limb. Savvy investors are preparing to purchase safe investment-grade assets, as they’re recognising that asset selection is the key to their returns later down the track.
For those have held onto their properties during the last few years can find a fair amount of equity to play with, and looking away from Sydney and Melbourne presents some great investment opportunities in growing interstate markets. Looking at the QBE Housing Outlook Report (which you can find here), we’re expecting growth in most of the major cities and regional centres across Australia over the next three years. Wise investors will always find some great opportunities in the property market.
So, what do you do now?
The issues in the market aren’t a result of people not willing to purchase property (there’s an abundance of keen buyers at the moment), the issue is the tightening credit policies we’re experiencing from most lenders. Knowing your lending capabilities is essential when it comes to purchasing a home that you will be comfortable living in over a long period of time. To find out your borrowing limits and current financial situation, contact one of our experienced brokers in your area today.