After an incredible 2021, the market has shown little sign of slowing down in recent times. Though COVID-19 continues to impact our community, consumers are certainly not being deterred.
Whether you’re a first homebuyer, upsizing, downsizing or looking to invest, buying property in today’s climate can be daunting.
We caught up with Rich Harvey, Buyer’s Agent and CEO, Propertybuyer.com.au, one of Australia’s most trusted industry voices, to discuss the market’s current state and what you need to know when looking to buy.
Hot start to 2022
“The year has kicked off at a cracking pace – though it’s not quite the same furious sprint as last year. I still recall going to an auction in 2021 which had 22 registered bidders – you just don’t see that,” Harvey says.
“Presently we’re still recording good numbers, between 5-10 bidders, though properties aren’t selling crazily high over reserve. I would’ve expected to see more listings, but I think that’ll ramp up toward Easter – traditionally the first of two peaks, the other being the Spring high season.
“Overall, the market is definitely still strong, but particularly for quality property – that’s bringing buyers out of the woodwork and creating fierce competition.”
The interest rate debate
Much has been made about a potential increase to interest rates by the RBA. But what effect is that having on the market? At this stage, as Harvey explains, the impact is negligible.
“So far, there’s been no evidence of a reduction in prices due to potential interest rate rises down the track – I certainly believe it’s on the mind of buyers, but there’s been little material impact on behaviour.”
Advice for prospective buyers
When it comes to buying, Harvey stresses that it’s all about preparation and strategy.
“If you have borrowing capacity, get your pre-approval and buy – but do it carefully. If you’re a first homebuyer, look for the best opportunity to enter the market, if you’re an investor, research the market and find the area that’s going to deliver optimum capital growth and yield – it’s all about identifying your goals and executing.”
“A lot of people worry after getting their pre-approval – they might have $1 million but only want to spend $800,000 – why wouldn’t you buy better property if you can do so?”
In terms of what to keep an eye out for, Harvey believes the following is key:
- Make sure you understand covenants, easements and any restrictions over the land and as a general rule, avoid being on main roads or next to large power or transmission lines which can deplete value.
- Don’t be overly concerned with a cracked tile or a little bit of rot here or there, look out for major structural damage.
“It’s also important to watch auction clearance rates and how many days a property has been on market – those signals of when there’s drop off in demand.”
Propertybuyer is an independent Buyers’ Agency that assists home buyers and investors find their ideal home or investment property.