The Advertiser - Real Estate
Buying during the boom time
Keeping within budget requires flexibility, writes
Home seekers will need to be flexible with their choice of location and property if they want to break into the housing market during the current boom.
Recent CoreLogic data confirmed housing values grew last month at the fastest rate nationally in 17 years and more growth is expected. The boom has come as listings remain at low levels while buyer demand, boosted by record low interest rates, has been surging.
CoreLogic head of research Tim Lawless said the mismatch between supply and demand was a central factor pushing prices higher. “Although new listings are likely to track higher over coming months, if buyer demand continues to lift it’s likely overall advertised stock levels will remain low,” Mr Lawless said. “Buyers are likely confronting a sense of FOMO which limits their ability to negotiate.”
Vendor discounting rates were estimated at a record low of 2.6 per cent in February, and auction clearance rates have consistently been well above average at about 80 per cent, Mr Lawless added.
“Serious buyers would be well advised to have their financing pre-approved and be ready to act fast in order to secure a property under such tight supply conditions,” he said.
Real Estate Buyers Agents Association president Cate Bakos said buyers who were repeatedly outbid were often looking in areas they couldn’t afford.
She suggested home seekers use comparable sales as a guide to pricing rather than agent price guides, which were often marketed at figures below the vendor’s expectations.
Those disheartened by the strong competition should keep in mind that the best properties would attract the most interest, Ms Bakos said. “It might seem like a good idea to go for properties where there is less interest, but remember that if you buy a bargain, you will sell a bargain,” she said.
Harcourts chief executive SA/NT Gregg Toyama said he hadn’t seen such a “consistently strong market” in his 30 years in the industry.
However, he said potential buyers needed to look carefully at what they could afford and then – if they see something they liked – go for it.
“From my perspective, as long as it fits within the lending and payment criteria, my advice would be to put your best foot forward,” he said. “If you see something you like and you’ve been looking and you’ve got the funds to be able to go to a certain level, then do so.”
Mr Toyama said it was important for househunters to be flexible with issues such as settlement dates and “subject-to” conditions.
“My personal advice would be to get pre-approval to the maximum you feel comfortable with. That way you can knock out the ‘ subject to’ and make your offer more competitive,” he said.
“Then if you see something you like, just put your best foot forward so if you do miss out on it, you’ve at least done all you could.
“And the third point is, especially in this market, try to put yourself in the sellers’ shoes ... so if you were selling this property, what offer would I like to see?”