Spring is here and homeowners and property investors are waiting with to see what’s in store.
Will the property market experience its traditional spring rebound? Will buyer demand keep pace with housing supply? And everyone wants to know what will happen to prices.
At the coalface, the markets are patchy, fragmented and uneven. Some suburbs are still performing well with multiple buyers for every property for sale pushing up prices, while other suburbs are eerily quiet.
Historically, the spring market tends to be the most active time of the year and usually delivers the strongest price growth of any quarter. But this year it’s likely to be different. Prices are unlikely to grow significantly.
With all the mixed messages in the media people are very cautious, and are holding off making major buying decisions.
On the negative side there is the depressive effect of the Reserve Bank’s six interest rate rises; worsening housing affordability; wobbles in the financial markets and persistent fears about the fragility of the international economy; the uncertainty caused by the delays in the outcome of the federal election.
And, yet, there is still plenty to be positive about. Australia’s economy is among the healthiest in the world. Interest rates, while higher, are still comparatively low. Population growth remains robust and there still aren’t enough properties being built to satisfy long-term demand.
The buyers’ agents at Metropole tell me that good properties are still selling well, there are lots of buyers out there for great properties, but secondary properties such as on main roads or in porr locations are struggling to find buyers.
We have turned from a sellers market in the first half of the year into a buyers market now. If you intend to by a new home or property investment, this could be a great time to buy. In the past year or so it didn’t matter if you overpaid because in the rising market your property would have increased in value even before you settled on it.
Things are very different today. You can’t just buy any property – you need to be selective, do your research and buy well. Buy below intrinsic value in an area that has always had strong capital growth and buy a property to which you can add value.
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