IS IT A GOOD TIME TO BUY PROPERTY?
With property prices and competition falling away, the short answer is yes, it is a good time to buy property — if you’re one of the lucky ones who remains financially secure.
Advantage Property Consulting director Frank Valentic said buyers had been flung back into the box seat since COVID-19 began to curb the flying Melbourne property market.
“Sellers have had it good for the last 12 months, but now buyers have more opportunity,” he said. “Properties are selling at the bottom or middle of the price range, where a month ago they were selling up to 20 per cent above the top end. If a vendor is needing to sell, you can definitely pick up a good deal.”
Melbourne house and unit values shot up 10.7 per cent in the year to February 29 to hit a record high, CoreLogic reported.
But the gains were curbed to just 0.4 per cent in March, and price falls are inevitable in the months to come.
Mr Ryder said those who did buy during the pandemic could do so with confidence the market would recover after it came to an end.
He noted the Melbourne property sector had entered COVID-19 in a “solid position”, and history showed real estate had a “track record of hanging tough in a crisis”, with prices even rising during the 2008 Global Financial Crisis.
“Prices will take some kind of hit, I don’t think it’s going to be dramatic, and I don’t think it’s going to be long-term,” he said.
The Hotspotting analyst did forecast “a major reduction in activity”, with many would-be buyers ruled out by financial woes and vendors withdrawing from the market or deciding not to list at all.
This meant househunters would have fewer properties to choose from, but also less competition.
Buyers should also be buoyed by the fact the interest rate sits at a historic low 0.25 per cent.
HOW CAN I BUY WELL IN THIS MARKET?
Buyers should be aware of their heightened negotiating power in the coronavirus-hit market, without taking advantage of vulnerable vendors.
Industry Insider director Andrew Date said he was finding motivated sellers were willing to cut 5-10 per cent from their asking prices in certain instances, especially to buyers offering enticing terms.
“For example, if you had an upsizing family who’s had their home on the market four to five weeks, try making a lower offer but give them attractive terms,” he said. “You could say, ‘I’ll rent the property back to you for six, 12, 18 months so you can stay living here and not have disruption to your daily lives (during the pandemic)’.”
Mr Date said would-be buyers needed to be able to show agents and vendors they could act quickly by having pre-approval from a lender.
Off-market opportunities were also likely to boom, as many vendors viewed selling in this market as a gamble, Mr Valentic added. “Vendors don’t want to risk paying $5000 to $10,000 upfront in advertising costs then find they are unable to sell,” he said.
Buyers in the coronavirus climate will also need to embrace technology.
With auctions, open for inspections, and inspections of occupied properties banned by the state and federal governments, agents have turned to digital platforms to showcase and sell homes.
TIPS FOR BUYERS IN CORONAVIRUS CLIMATE
-If you’re financially secure to buy, view this period as an opportunity and don’t sit on the sidelines. Now is a good time to buy property.
-Be flexible in your requirements from a home to keep your options broad
-Pursue multiple properties to ensure you have stronger negotiating powers (eg. telling a vendor you will make an offer on another property if they don’t take your offer)
-Be creative when negotiating (eg. offering to rent the property back to vendors to limit disruption to their lives and strike a better deal)
-Source off-market deals by forming relationships with agents in your desired suburbs
-Show agents you’ve got the ability to make buying decisions quickly by having pre-approval
-Use a buyer’s advocate to help you source the right type of property and pay the right price
-Remember there’s no need to take advantage of vendors left vulnerable by COVID-19 to get a good deal
Contact Fortis Real Estate now for more information!
P: 02 8328 0901