With news that will fill house hunters with joy, industry experts believe that next year will see the real estate scene finally shift to a buyer’s market.
Anyone who’s remotely familiar with the Australian property market knows that the scales often tip in favour of either buyers or sellers – and knowing the difference between the two is often key when it comes to getting the best bang for your buck. Over the last two years, we’ve seen demand far outstrip supply when it comes to the national real estate scene, resulting in a sellers market that limited opportunities for first home buyers to get a foot on the property ladder, particularly during 2021. While we knew that the property boom couldn’t last forever, increases to interest rates and sky high inflation has seen the market approach a significantly more balanced position. Although many media reports would have us believe that house prices are about to fall off a cliff, in reality, the market is set to transform into something far more interesting: a buyer’s market.
Why The Stars Are Aligning For A Buyer’s Market
According to the latest forecasts released by the National Australia Bank, house prices are set to plummet across the nation in 2023, with an overall drop of 23% expected to happen in the not so distant future. However, it’s important to draw two separate distinctions from these predictions: that this drop may not affect all corners of Australia in the same way, and that a true buyer’s market goes beyond a decrease in property prices. In fact, the definition of a buyer’s market simply means that buyers have the advantage over sellers. While it’s true that this type of economic shift is usually tied to when supply exceeds demand, it’s worth noting that navigating a buyers market simply means that there’s more room for negotiation on things that go beyond the price.
Other data sourced from NAB’s latest report indicates that property professionals generally believe that there are three important considerations for homebuyers when deciding to buy a property. While the amount they are prepared to borrow to buy leads the way at 82%, two other surprising factors include good local amenities (60%) and the size of the house (57%). What this means is that if the house is located in a good neighbourhood or is located on a decently sized block, a buyer may be more likely to pay slightly more if the property meets their property checklist requirements.
While it’s true that house prices will inevitably fall as a reflection of rising interest rates and lower borrowing capacities, these priorities mean that buyers also have more choice when it comes to compromising less on what types of homes they want. In addition, more power will be given to buyers thanks to a shrinking pool of competition. Many buyers have opted to temporarily ‘tap out’ of the market until inflation settles, or have instead put off purchasing a home in favour of pursuing overseas travel opportunities that were off the cards for the last few years. As such, there are less buyers available for sellers to pitch to, so the latter is likely to be much more open-minded when it comes to generating serious offers. Quite simply, the FOMO – or fear of missing out – that drove the recent property boom is now a thing of the past.
When combining lower auction clearance rates with more homes to choose from among a smaller buyer pool, Sydney and Melbourne are leading the way when it comes to the transition from a seller’s market into a buyer’s market. In contrast, it’s also worth noting that in regional hubs, the market is still holding strong for sellers and paints an entirely different story. If you’re getting ready to potentially buy a house next year, then there’s one important factor that needs a great deal of your attention: access to finance. Knowing how much you can borrow, how much you’ll need to repay and what types of properties fit within your budget are crucial pieces of information to have during your journey as a buyer, so partnering with a reputable mortgage broker is a must – but where do you find one?
Your Guide For Navigating The World Of Home Loans
With a background in banking, finance, business development and project management, there’s no better advocate to have on your team than Nikki Berzin. As a fully qualified mortgage broker and director of Cherry Lending & Finance, Nikki is passionate about all things finance, and empowering her clients with the tools to hit their property goals is what she does best. If you’re looking to get into your first home, purchase an investment property or even want to look at your options for refinancing, the first step is starting the conversation. Get in touch with Nikki today, or call her directly on 0427 374 155 to bring your mortgage dreams to life. Disclaimer: We recommend that you seek independent financial and taxation advice before acting on any information in this newsletter. It contains general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. Interest rates are subject to change without notice. Lenders terms, conditions, fees & charges apply. Credit Representative 499652 is authorised under Australian Credit Licence 389328.