If you’re waiting for a “fire sale”… don’t

One of the things that consistently surprises us at Hello Haus is the number of buyers that try and play a waiting game, looking for the market to bottom out so they can sweep in and nab a “bargain”. Time and time again we’ve seen people who have the financial resources organised pass on properties that fit their every criterion, thinking that if they just wait a few more months, they’ll get an equivalent property while saving big dollars.

This is why we weren’t surprised by a recent story, published on Domain.com.au, suggesting that significant numbers of buyers are sitting on their hands and holding on making offers on properties. Despite CoreLogic data suggesting that home values have fallen by 12.1 per cent in Sydney, nine per cent in Melbourne and 8.6 per cent in Brisbane, over the last year, there is still the expectation in some circles that prices will drop further.

“I think very often buyers don’t realise it’s the bottom of the market until it’s passed,” The Property Bureau’s Alastair Mairs said in the article. “Everyone’s waiting for a fire sale.”

Things are already heating back up again

Over the past couple of weeks, we’ve observed conditions that point to anything but a “fire sale” market. Indeed, every indication is that we’ve hit the bottom of this particular dip, and the market is rapidly heating back up again.

For example, one recent property that we helped a buyer secure in Erskineville, Sydney sold in pre-auction for $1.76 million, above the guide price of $1.3 - $1.4 million. They had an offer and acceptance at $1.6 and were ready to exchange contracts before the agent started ringing around other contract holders. The price then raced ahead another $176,000 through heavy competition before arriving at the final price. This is an incredibly strong sale result and shows the buyer depth and demand in inner Sydney.

Meanwhile, also in Erskineville, we were able to help a client secure an off-market deal through heavy competition with 4+ other contract holders on the final day of negotiations. That activity took the property, which had a $1.2 million guide, to $1.392 million sale price.

Based on these examples (and others), we actually expect to see the market accelerate from here, and rapidly so. It will start in the more prestige cities and suburbs, so the normalisation in regional areas and the suburbs where property values are a little lower might take a little longer to rebound. However, the rebound in all locations, when it does come, will be sharp.

Now that there’s some confidence that the interest rates are, if not peaked already, close to the plateau, there will be more confidence among buyers, too. Greater confidence means a greater pool of buyers to compete with, further heating the market.

If you’re ready to buy a house, you need to be out there actively looking for one now. Make sure that you’re buyer ready, and work with us to help with your search and negotiation strategy. For the short to medium term, the market right now is the strongest buyer’s market we’re going to see in Australia.