Australia is currently going through the biggest house price declines this year. The world’s major crediting agencies have declared that any recovery is not expected until 2020. As prices and interest rates fall, discounts increase and competitions reduce giving buyers with good credit histories, the best of all worlds. There has also been a pullback in investor lending due to a number of regulatory interventions. Banks have made it almost impossible for overseas investors to receive interest-only loans and have stamped out those with multiple properties. So first home buyers have the market to themselves.
But before plunging right in, it is better to sit back and check with your adviser on any rebates. With thousands of apartments flooding the market, developers are now offering incentives like cars, cash bonuses, rebates on stamp duty etc. While these incentives are definitely attractive, you should always focus on the property – whether it is right for you in terms of location, design, finance and cost.
We can safely say that the housing market in Australia is struggling. Vendors are not getting the desired rates. So how can you prepare yourself for the right bargain? Here are a few pointers:
1) Study the market:
There is nothing called as too-much-information when you enter the housing market. The more you know, the better. You will, of course, have a good understanding of your local area. If you want to move to another locality, then you need to be extra-cautious. Get to know the locality, understand the market sentiment and determine what would be a good offer.
2) Get mortgage pre-approval:
Now that you know your locality and the prices that determine the market, you should calculate your borrowing capacity and check what loans would be available for you. You can contact a professional broker like ‘Challenge my Rates’. We’re the most trusted brokers in Australia. We will help you get the best financial services.
With banks imposing tougher screening processes for loan applications, it is hard to get the desired funding. You may get approved for less than what you hoped for. However, don’t stress out, everyone is sailing in the same boat. You can easily get your deal.
3) Calculate your bidding offer :
The next step is to place your bid. Always remember – Patience is key. To get a good price, try to focus on the deal and keep your emotions at bay. Here is where a thorough knowledge of the housing market scenario in the locality will come to your rescue. As mentioned earlier, due to restrictions on interest-only and investment lending, investors are looking to sell. You are now in a buyer’s market. You don’t have to worry that you may miss out on a purchase if you make a low bid. Just hold your ground.
You know that as a buyer, you are now in the drivers’ seat. You should remind the vendors that they won’t get the prices of 2017. Times have changed and the previous selling price of the property does not matter since there is no longer the same competition. Also, since banks are lending less, vendors will only get the money that people have to offer.
5) Sit back and relax:
You’ve studied the market and you’ve done the Math. As a buyer, this is a good time for you. So no need to jump right in, just take your time and once all your cards fall into place you can go ahead and make your purchase. Once you’ve bought your home, just relish it. This home is the fruit of your hard work! Don’t let the dim state of affairs dampen your spirits. Just enjoy your new home and focus on paying down your loan asap.
Hope you got some idea on how to use the current market environment to your advantage. Need some advice to buy your next property? Get in touch with us and we will get you the best deal!