Considering investing in Property? Here's what you need to know.
/We know many of our clients will be looking to take up investment opportunities that might be created in this market, so we’ve asked buyers advocate, Craig Shearn to give us a Property Market Update. Craig is a property professional with over 35 years of industry experience in residential and commercial property. Craig's broad expertise comes with deep insights into the property market and its trends - past, present and future.
PROPERTY MARKET UPDATE - Craig Shearn
As a Buyers Advocate and Property Advisor, I have reflected on a number of recent conversations with experienced agents in areas such as the Bayside, Boroondara, the Inner-city suburbs and Stonnington and one thing is abundantly clear...yes the landscape has changed over the last six weeks and yes there has been some price adjustment but ultimately the bulk of properties, are still selling, for in most cases reasonable prices and the evidence of “panic“ seen in the week commencing March 16th, has now subsided.
Effectively, in mid-March when open for inspections and public Auctions were shut down, a number of Auctions were either brought forward, withdrawn or as was more common, changed to Expressions of Interest campaigns or Private Sales, hence Auction clearance rates being touted over the last month were completely skewed for this very reason.
Furthermore, the majority of those properties were subsequently sold, a few at slightly discounted prices initially but most of them with competition, and of course these were properties originally listed by vendors in February and early March. Move on six weeks and the successful use of the online Auction method has resulted in some good outcomes for vendors.
In general, prices in the municipalities mentioned have come off circa 5% to 10% but this adjustment has already happened and effectively in some cases sees values now back at levels they were only 12 months ago! Will prices come off further? Maybe but possibly very little in the coming months because of a lack of supply and a still steady demand for A-class properties in historically solid and popular suburbs. If anything, the return to local community focus because of social isolation will see in my opinion, a revival in local village strips thus underpinning and putting upwards pressure on prices. School locations aren’t moving, parklands aren’t moving so the reasons for values remaining solid and increasing in popular areas, will continue over time.
So what is selling? Properties mainly in the price range of $1million to $2.5 million, apartments, townhouses, single fronted homes, and in some cases double fronted family homes on 500 sqm to 700 square metre land allotments. Potential sellers above $2.5M, generally speaking, are not putting their homes on the market and probably won’t until later in 2020 or early 2021. In other words, why sell now unless you have a good reason to do so when you can still capitalise on record low-interest rates and in some cases a mortgage break for 6 months if required.
However, as is historically the case, when the current situation is clearer and buyers start to re-enter the market having not acted during this unprecedented time in history, there is every chance that the property market will rebound and possibly quickly, particularly in good areas and popular investment suburbs and therefore as a buyer, you may well have missed a good opportunity between now and September, October to buy at a better price point.
If you have secure employment, are well researched, have your finance approved in principle and you are taking a longer-term view, despite what you might be reading, now may well be a time to buy if you are in a position to do so.
Key points to consider if you are looking to buy now;
Be well researched, prepare a detailed brief to provide to key agents in the area you want to buy or if you would prefer to deal with someone at the coal face, consider appointing an Advocate to advise, research and negotiate for you.
Understand there is no guarantee of what the market does in the short term and the property you buy may reduced in value post-purchase but history and a raft of property data tells us property values increase over time, particularly if you sensibly take a longer-term view.
Please make sure you have your finance in place, banking rules and regulations have changed so seeking advice from a professional finance broker such as Thatcher Finance is of paramount importance to ensure you can act decisively and in some cases, with a limited supply of property, quickly.
If you are uncertain don’t buy now but ensure you know what is actually happening in your suburb of choice and don’t only listen to hearsay or broad-brush views which may be affecting the correct decision for your personal circumstance. I’m still to this day amazed how much people can listen to family or friends on their unsubstantiated view of the market and often from people who don’t actually own property.