It’s time to grab a property bargain
HAVE you thought that these real estate pages have been feeling a bit heavier over the past few months? Your keen sense of touch does not fail you. In fact, open inspection listings in recent weeks have been up to 40 per cent higher than for the same time last year. This illustrates one of two possibilities. First, the real estate market is booming and fresh sellers are coming out of the woodwork because they’re buoyed by the high prices being paid.
Second, it’s a true buyers’ market because there is a glut of property up for sale, meaning investors and potential homebuyers are better placed to grab a bargain. My money’s on the second theory. The scales of supply and demand look to be tipped firmly on the supply side at the moment and we are certainly not seeing boom conditions.
RP Data recently reported that Adelaide’s median house price rose just 0.4 per cent to $410,000 in the 12 months to February.
Unit prices were a bit better, increasing by 1.3 per cent to $328,500.
Both were below the rate of inflation, which means in real terms the prices are going backwards, although only slightly.
The general feeling among agents and builders seems to be that the market is patchy. Some properties are still selling quickly while others are hanging around for months – much to the frustration of their owners.
The old line ‘‘if you’re realistic about your asking price, it will sell’’ is being wheeled out regularly.
Uncertainty over interest rates is hurting the market. While the Reserve Bank left rates on hold again early this month, most economists say the next move will be higher and will probably come before the end of the year.
Add to this the tougher lending conditions imposed by banks since the global financial crisis and property finance doesn’t have a lot going for it.
So what do you do? It all depends on your position.
A seller needs patience and must understand that it may take a few months to get results.
This patience will be sorely tested if you’ve already bought another property and are looking at unpleasant bridging finance scenarios and lenders mortgage insurance.
Sometimes you just have to take some financial pain and accept an offer below what you were hoping for. I’ve seen people turn down offers that were a few thousand below their expectations and end up holding an unwanted properly for six months or more, spending thousands of dollars in unnecessary loan interest and advertising costs.
Buyers are in a good place, with plenty of options available and some sellers getting more distressed as the days go by.
It’s the same for investors looking to buy while investors looking to sell need to be patient and continue to see their properties as a long-term asset.