Opportunity for buyers in a tentative market

It’s impossible to avoid the intense media coverage of the property market downturn, and if you’re in a quandary about whether to purchase now or wait, it’s very likely that you could be hoping that the market drops further before you commit to buying.

As experienced agents we know that real estate is a long game and a cooling market often presents great opportunity. The past couple of years have undoubtedly been a sellers’ domain. Low stock levels and a low interest rate environment drove record-breaking growth and saw buyers battle it out, routinely paying well above reserve to have any hope of being the successful purchaser. However, during a downturn, vendors have to be a little more flexible, meeting the market where it sits and often being prepared to negotiate on price and terms.

As the market cools in the face of rising interest rates and increased uncertainty, some potential buyers will put their purchasing plans on hold, which means less competition for available homes and more choice for committed buyers. Compare the current environment to the peak of the market last spring when homes were selling in an average of 15 days and many listings were snapped up before even hitting the open market. Buyers today can afford to take their time, making sure the property is the right fit.

Another advantage for buyers in a cooling market is that falling prices mean lower mortgage repayments. You might also find that the price difference between your current home and your coveted home narrows, making it a great time to upgrade. It’s curious that we wait for many things to be on sale before we buy, yet when it comes to real estate there can be some resistance when better value is displayed. There’s a strange fear-of-missing-out mentality that sees buyers eager to purchase in a heated climate. But why would you want to be fighting it out in a hot market when you can buy in an environment where you’re afforded more time to make your decisions? Those who traditionally get the best returns are those who buy when others are fearful. When in doubt, pan out and look at the historical growth charts and the bigger picture. Our advice to buyers is always the same – when you find the right house at a price you’re able to pay, it’s always a good time to buy. If you’re holding a property for more than five years, history shows that your asset will appreciate. If you look at a 10 year cycle, your property is likely to be making serious gains, no matter what climate you purchased in.