Australian Property News
Is it the bottom of the market?
Posted on Tuesday, October 04 2011 at 3:48 PM
There’s more for sale, there are fewer buyers out there and loans are pretty hard to get right now. But how do you know for sure if it’s the bottom of the market? As investors, we all want to buy when we know things are likely to turn. However, trying to figure out exactly when that will happen is almost impossible, according to Patrick Bright of EPS Property Search.
“The truth is, it would normally take you between six to 12 months to know for sure. You’d need to see at least two quarters to see a pattern or a trend,” Bright says.
“It could be a short-term thing and the market turns because of supply in that little pocket, but it doesn’t mean the market has definitely turned (even if the statistics over two quarters look promising).”
Bright admits we may not see “massive growth” for some time, but that doesn’t mean there’ll be massive falls either. While the first-time investors are holding back and waiting, Bright is seeing more “seasoned” investors getting on with the job.
“If you’re buying to hold for 10 years plus and if you’re buying and selling in the same market, it doesn’t matter. An investor will buy when they can afford to buy. A speculator will try to time the market and I wish them all the best.”
While interest rates have been kept on hold, one true indication that the bottom of the market has been reached could be when interest rates start to fall, according to Bright. This is because it will attract more buyers to the market and investors will start to feel more confident.
“It’s very unusual for rates to go down and then back up very quickly, so once they start to go down, that will be an indicator.”
Of course, the bottom of the market in one part of Australia could be a rising market in another. Bright says even in Sydney, each pocket seems to have properties selling and you really have to research your area and market first to know where you can negotiate harder and which price brackets have more competition.
For example, anything above $3 million on the Lower North Shore is “really soft” but below $1 million is still “pretty firm” and the $1 million to $2 million market is doing okay. However, go further north past Curl Curl and the market above $1 million is “pretty soft”. The eastern suburbs are “soft in general” but the inner-west of Sydney is still performing.
“Some parts of the market have got a lot of stock, some have less, but my view is that if you’re a homebuyer, I would get on with it,” he says.
Follow us on Twitter.
Was this article helpful? Place a link to it from your website, or share it using the button below.
Pain and gain depends on postcode
Owners holding homes for longer
Is it a gift or just a guarantee?
Sydney’s high housing costs driving older people out
Check your rate is competitive
Calls for more caution and education