For the fourth weekend in a row I have been to auctions with more than three people bidding at properties on the market. There is a strong return of both investors and owner occupiers to the market place. Some properties purchased over the weekend sold at prices that may not have been attained in December last year. If we look at the media comment from most agents they are saying the same thing.
The market is heating up again and it is due to two major factors. Firstly, good property has a habit of always going up over the long term. Even with the “drop” in the market this year most good properties will still show 12 month increases above 10%. The March 2008 Melbourne Median price still showed a rise of 14.4% for the year (REIV Statistics). Can the Stock Market show this?
Secondly, good property is scarce. Supply and demand factors are way out of sync. Many people have been putting off their house purchase for the past six months, to see what would happen. Now they are in a position where they must buy or rent and both of these are daunting tasks. If stock doesn’t increase by October, to quote Paul Braddock, ANZ Banks chief economist “there will be the mother of all booms in the property market”
It is not easy to find good property, and when you do you have to be prepared to “fight” for it to a certain point. You need to set limits, but you also have to be realistic. Good property, will always be good property and whilst everyone thinks the market is in the doldrums, smart people are buying these good properties.
Always do your research, always have a plan. Use a professional Real Estate Agent that is working specifically for you. Unfortunately, your accountant, your loan broker, your valuer or your best mate will not be able to assess and negotiate as well as a seasoned professional Real Estate Agent. Buying property in this market without using a Buyer Advocate is fraught with danger. You need to know what to buy, when to buy and how much to pay. You need to be able to negotiate with a seasoned professional.
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