Spring Real Estate Action Plan for Buyers and Sellers

Specialists warn, however, that it is a low base compared to previous years. “We are in the middle of a real estate recession and there are very soft conditions in all the capital cities,” says Louis Christopher, managing director of SQM Research, which monitors the markets.

“There are a variety of positive and negative drivers that drive sales volumes and prices. No single factor can determine the direction of the market for long,” says Ben Esau, national director of residential property consultancy Herron Todd White.

Whether you’re a buyer or a seller, there are lessons to be learned and mistakes to be avoided, experts say.

Tiera Butkus, business development manager, and Cameron Wallace, engineer, plan to buy their first home in Brisbane during the spring sales season despite rising rates and the possibility of prices falling further.

“We’ve been looking for about six months,” says Tiera. “We’ve saved a deposit and rising rates won’t scare us.”

She says they want a “forever home” that gives them financial security because they will pay for their property instead of renting it.

The couple plans to spend $900,000-$1.1 million on an older-style suburban home that they can renovate.

“A few months ago, the market was extremely competitive and it was very difficult to buy,” says Tiera. “But it has been changing. There are not so many people in the inspections and more houses are being passed”.

Brisbane listings were up more than 11 per cent last spring, says CoreLogic, compared to more than 72 per cent in Melbourne and 50 per cent in Sydney.

Tips for buyers

Note the buffer: Reducing competition among first-time buyers is that many younger borrowers are being priced out of the market due to rising borrowing costs and the Australian Prudential Regulation Authority, the prudential regulator, adding a three point servicing margin percentage to the interest rate, which is used to assess whether the borrower can afford the rising costs.

Do your research: Slower markets also mean potential buyers have more time to research and select the right property and complete due diligence checks (such as flood risk, local demographics, boundary checks, school locations, and others). services).

Be strategic: Buyers’ agent Cate Bakos says buyers need to have a clear plan for what type of property they’re looking for, the location and how much they can afford. “It is not good to waste time analyzing different options considering too many suburbs. Be very clear about what and where you want to buy”.

Specialists warn soft conditions in all capitals. Simon Letch

That includes a list of “must haves” such as property size, layout, availability of public transportation and local schools.

Prepare for loan approval: Buyers should get their finances ready by knowing how much they can afford to borrow, which depends on an accurate assessment of their income and financial commitments, as well as their potential home deposit. They should also have obtained a credit score and credit report.

Have your deposit ready: “In many cases, buyers get their deposits from a variety of sources, including principal releases from the sale of an existing property, family trusts, or businesses,” says Bakos. “This can be a complicated and time-consuming process, leading to delays that could make or break a deal.”

Decide on time: Buyers who are upgrading an existing property, or downsizing, need to know how long it will take to complete the sale of their existing property. Generally, 60 days is sufficient to satisfy the requirements of most buyers.

Bakos recommends that many buyers try to negotiate between 90 and 120 days to give themselves enough time.

Find the best mortgage: Lenders compete for buyers at discounts, offering cash incentives of up to $10,000 or lower rates.

“While there are still twice as many lenders raising rates, the list of cuts is growing, signaling a shift in the market as more borrowers shop around,” says Sally Tindall, head of research at RateCity, which monitors loan costs.

About 16 lenders have cut fixed rates this month, with more likely to follow as long-term funding costs (which are based on the bond market) continue to fall, says Tindall.

For example, the CBA recently cut the three-year interest-only fixed rate by 1.2 percentage points.

Buyers can negotiate about 200 basis points off a new loan, or about $20,000 a year for a $1 million loan, as lenders compete for borrowers, mortgage brokers say.


Tiera Butkus and Cameron Wallace say conditions have improved for first-time homebuyers. Jamila Toderas.

Find out: Sellers are increasing their discounts, says Domain, a specialist in the residential real estate market. The average discount in July for Melbourne properties increased to 5.8 per cent from 4.8 per cent compared to the same period last year.

Run the numbers: Buyers’ agents in key capitals say cash investors are attracted by record-low rental vacancies, soaring gross yields and a market that favors homeowners over renters. Investors need to calculate the returns they must earn to have a viable investment. They should also check their state or territory’s minimum rental standards to make sure the property doesn’t require capital expenditures that would seriously reduce cash flows.

Take advantage of the buyer’s market: “The message is clear to buyers,” says Rich Harvey, chief executive of property buyer agency Propertybuyer. “The next three months will provide some of the best buying opportunities we have seen in many years, while sentiment remains low.”

vendor strategies

Maximize the location: If you’re selling a home in a prestigious suburb, agents say there’s a shortage of properties and plenty of buyers. SQM’s Christopher says that the high-end billionaire market is influenced by the performance of the economy (which continues to grow strongly) or the financial and equity markets (rather than increases in interest rates).

The nation’s wealthiest constantly compete for trophy properties in elite zip codes. For example, Macquarie Group CFO Alex Harvey recently paid nearly $19 million for a house on Sydney’s Kirribilli waterfront, while in Melbourne’s Toorak, a cryptocurrency entrepreneur paid nearly $40 million for an abandoned mansion on St Georges Road.

Reveal the potential: Property stylist Natalie Fryer, director of M2 Styling and Interiors, says increased competition to find the right buyer means “you have to focus on who the market is, such as presenting a property that could be used as a family home. and then reconfigure the interior to tell that story.”

She says that in the last six months the 100 properties she has renovated for $3,500-$15,000 have sold for $200,000-$1.5 million above the asking price.

Be careful with renewal: Phil Dwyer, national chairman of the Australian Builders Collective, warns against “quick” renovation projects like adding a room or renovating a kitchen or bathroom.

“There could be terrible problems getting someone to do anything,” Dwyer says of a shortage of trades and costs for basic building materials that have more than doubled in the last 12 months.

Do it yourself: Sellers who want to cut costs could choose a DIY strategy instead of paying the traditional real estate agent’s commission.

For around $2600, local DIY vendor buymyplace will provide online listings, professional photos, for sale signs, and organize “open for inspection” signs. That compares with a real estate commission of around 2.2% for services including appraisals, home inspections and one-on-one assistance.

Those considering this option should be prepared to negotiate dispassionately with potential buyers.

Remember foreign appeal: Foreign buyers are beginning to return to the market with expats, Singaporeans, Japanese and other foreign buyers replacing Chinese investors, says Nerida Conisbeen, chief economist at the Ray White Group.

Give up the auction: An increasing number of sellers, such as the Aylwards, skip the auction process and instead invite buyers to express their interest.

Ray White’s Lazzaroni acknowledges that “there is no transparency” because unlike a traditional auction, or asking for a fixed selling price, other buyers won’t know the price the buyer wants or any details of other competing offers. This may create suspicion that prices may be inflated to increase sales prices and commissions.

“If there isn’t a knockout offer, we go back to the bidders to let them know what the price should be and get their feedback,” he says of the Aylwood sale. “If there are multiple similar offers, we give buyers another chance to make their best and last offer.”

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