Author: REIWA President Damian Collins.
Property market commentary is almost always focused on the numbers. However, unless you are a seasoned property investor who understands the market and trends, many of these statistical observations may not be that helpful to you.
Everyone wants to buy at the bottom of the market and sell at the top, but for many of us the actual state of the market shouldn’t be of much concern.
For example, when selling one property to buy another, as long as you buy and sell almost simultaneously under similar market conditions, then the state of the market is of less importance. In fact, upgrading your home in a slow or falling market is beneficial because you might save more money.
If you assume the property market has fallen say 10 per cent, your $550,000 home might only now fetch $500,000, yet your new home you intend to buy was previously worth $770,000 but now sells for 10 per cent less at $700,000; meaning a reduced trade up cost of$20,000.
At the moment many buyers are in a holding pattern, with some of them reticent to commit to a purchase perhaps fearful of a further retreat in the market. If you are a first time buyer, then such reluctance is understandable, but upgrading buyers ought to proceed with more confidence.
While no one can predict the market with 100 per cent certainty, it appears the Perth market is starting to turn after a prolonged downturn. Stock for sale is at multi-year lows and rental pressure is starting to emerge, which may see more tenants move from the rental market into home ownership.
In a rising market when people gain confidence to buy, stock levels fall as demand increases and choice becomes constrained Some buyers are then forced to buy houses inadequate to their needs.
Sure, be choosey, take your time and re-visit homes on your short-list more than once but with good, quality stock currently being snapped up the fastest it has since December 2017, don’t wait for the market to turn and for your choices to lessen.
If you are unsure, make sure to contact your local REIWA agent, who will be able to take you through your options.
For more information about how Perth’s property market is travelling, visit the WA market page.