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Buyer’s Market

Put simply, a buyer’s market is when supply exceeds demand, giving purchasers an advantage over sellers in price negotiations.

The concept of buyer’s and seller’s markets stems from the law of supply and demand which states that as supply increases amid constant demand a downward pressure on prices occurs, while a demand increase amid constant supply puts upward pressure on prices.

What happens during the period of a buyer’s market?

Generally, in a buyer’s market, properties will sit on the market for longer before receiving an offer and sell for less than their asking price. Often, there is competition between property sellers so they must drop the price of their property to attract an offer from a purchaser.

Buyers markets occur during the slump and stabilization phase of the property cycle

The opposite of a buyer’s market is a Seller’s Market where demand exceeds supply and owners have an advantage over buyers in price negotiations.

 

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About

Michael is a director of Metropole Property Strategists who create wealth for their clients through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


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