Rich pickings are giving today's buyers the trump card
It's a bumper time to buy a property. Figures from research show that around 308,500 properties were listed for sale across Australia in June. That's 9% more than the same time last year, and the sheer weight of numbers is giving buyers the upper hand.
The situation we're currently seeing – where supply outweighs demand, is termed a ‘buyer's market', and it has seen property prices fall by 5.3% over the past year.
Today's market is the result of several factors including uncertainty over the global economy, the interest rate outlook and even the impact of the new carbon tax. One thing that is certain is that buyers hold the trump card in negotiations.
On average, buyers are securing price discounts of 7.1%. On a property with an asking price of say, $450,000, that means a saving of $31,950. So it can certainly be worth starting your negotiations with an offer well below the advertised price.
Who benefits most?
The buyer's market may not favour everyone. If you're thinking about upgrading it's vital to set a realistic selling price for your current home. The upside is that your money will buy a lot more especially if you're purchasing in a higher price bracket.
First home buyers could be the big winners in the buyer's market. Without a property to sell, first timers can afford to focus on selecting the right loan, finding a suitably priced property and negotiating a strong discount.
Investors are well-placed too, with tight vacancy rates and rental yields as high as 6.0% in some state capitals.
Having loan finance preapproved before you look at properties is a smart move in today's market. It shows vendors that you are in a position to buy on the spot, and that makes any offer you put forward more compelling.
Australian economic outlook remains positive
As the economic situation in Europe stabilises, it's important to remember Australia continues to enjoy a positive economic outlook – our population growth is solid, unemployment is below 5%, and interest rates are below average.
Speak with us to discover the home loan options best suited to help you make the most of the buyer's market.
Source of property data and figures in this article: RP Data