The last 2 years have consisted of a large amount of pessimistic property media which continues today. The downturn in the market was initiated by APRA investigating and applying pressure on banks to reduce interest only loans, at the same time tightening margins on living expenses whilst applying for loans. This was then closely followed by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. These events, in conjunction with the uncertainty surrounding the Federal Election, are factors why the property market has seen prices decreasing.
Despite the negativity, a flat or declining market can present opportunities that are not evident in a rising market. As median prices fall, potential upsizers that have, until now, been chasing a rising market can now afford the home they may not have been able to 2 years ago. As an example, the sales and growth chart below shows the median house price in Mosman in August 2017 was $3,500,000 from 19 sales, which is now (March 2019) down to $2,862,500 from 18 sales.
Source Price Finder – Mosman median house prices and sale numbers.
Apart from the obvious price decreases, declining markets offer other significant benefits to upsizing:
• The lower the amount paid for the property reduces the stamp duty amount payable
• Declining markets offer less competition from other buyers
• The lack of competition allows a purchaser to take their time and make a considered choice that fulfils their needs
• Provides buyers the ability to negotiate harder to get the right property at the right price
The reoccurring question that we are asked in this market is “will the market go down further?”
Whilst no one can predict the future, our view is that the market is starting to stabilise. We are receiving more client inquiry and seeing increased numbers of financed buyers at open for inspections and auctions. The general feeling is that sentiment within the property market is improving.
What we do know:
• Prices are lower than 2 years ago
• If you can acquire the finance, now is a great time to buy
• As a rule – we focus on time in the market, not timing the market
If you are considering taking advantage of market conditions, a buyers’ agent can really help with providing clients an advantage by sourcing off-market as well as on-market properties, increasing the choice of stock for our clients to consider.
As well as our buyers’ agent services Prosper Group also offers vendor advocacy services which is no additional cost to our clients. This service helps clients looking to sell their property by:
• Assisting with choosing a selling agent who is best suited to sell your property
• Advise with creating a marketing campaign
• Advocate on your behalf to the selling agent during the campaign
• Guide with setting a reserve price at auction
• Manage the selling and buying process to align settlements
Please contact Prosper Group for a no obligation consultation on what services and value we can add to your property buying experience.