While the weather is heating up, the property market is cooling down – and that’s just the right time for savvy home buyers to jump into the market.
We saw property prices in Sydney and Melbourne soar over the last 6 months, and now real estate agents are reporting a dramatic downturn in open house viewers.
A big factor in successful property investment is timing and location. But how do you know when is the right time and where the next growth suburb is?
As a mortgage broker in Sydney and the Central Coast, Mint Equity gets insights into the property market well before the impact hits.
Lending policy changes and the appetite of banks can be a trigger for how the property market will react. For example, it was the banks exiting the investment loan market that triggered the slow down in the Sydney property market. Some banks even went as far as to specify suburbs that were high risk for lending. If banks won’t lend to investors, then investors can’t buy property. Simple.
Investors were a major source of the competition for home buyers who effectively priced them out of the market. Home buyers can now step in and fill the gap in the investor market. But they have to move quickly because our sources show banks are now starting to open lending back up to investors.
Our top tips for home buyers
1. Timing is everything
Timing is crucial to successful property buying. Buying in a slow market rather than a hot market can significantly increase the profit or equity in the property. Of course you want the property to increase in value, but only after you’ve bought it.
Your mortgage broker speaks to real estate agents, banks, property valuers and other buyers on a regular basis and will be able to keep you informed of what’s happening in the market, as it happens. To stay ahead of the game, get on their database or subscribe to their newsletter so you get the inside info.
2. Be ready to buy quickly
To push out any competition you’ll need to have everything ready to go. Your wish list, preferred suburbs, budget, conveyancer, preferred building and pest inspection company and most importantly pre-approved finance.
Lenders have a history of changing their minds and policy, so it’s important that buyers have options for finance. This is where a mortgage broker is essential to moving quickly in the property market. Pre-approved finance is essential, but when lenders change their mind, a good mortgage broker will have backup options ready to go, so you won’t lose your chosen property.
3. Know your stuff
Research, research, research! Get to know the suburb/s you are considering and once you’ve got a property in mind get a property report. Mint Equity provides free property reports to all their clients.
4. Make your offer attractive
Often vendors will take a lower offer if they know the buyer has pre-approved finance and are flexible with settlement. If you are comfortable signing a 66W and waiving your cooling off period, then that’s a good incentive for the vendor. See our helpful links below to learn more about the pros and cons of signing a 66W.
5. Get professional support
A good mortgage broker will go above and beyond for their clients. Mint Equity will often contact real estate agents on our client’s behalf to find out more about the property, or negotiate with solicitors to extend cooling off periods. So if you’re not comfortable asking the tough questions, your mortgage broker can ask them for you.
If you’re short on time or your weekends are full, using a buyer’s agent can help reduce the time needed to find a shortlist of properties. Whilst buyer’s agents do charge a fee for their service, early access to properties and speed of service might save you money off the purchase price (and some of your sanity).
Spring Buyers Property Guide
We mentioned research is key to successful home buying, so to help you out, RP Data in collaboration with ING have developed a Spring Buyers Property Guide for all states in Australia. Insights include;
- 20 top-selling council regions per state
- 10 most affordable and most expensive suburbs per state for houses and units
- house and unit sales and year-on-year comparisons
- typical dwelling values, rental rates, selling time and discounting rates across every council region and suburb around the country
- maps highlighting the geographic trends in dwelling values
- 900 suburbs with a price guide under $300,000.