Residential property is definitely more of a buyer’s market these days. Buyers, however, are taking a lot of convincing and are often missing out on a great purchase simply because they are waiting for someone else to make the first move. As Michael Marquette of Marquette Turner recalls, “by the time a nervous buyer waits for a competitor to make the first move, the sale has been sealed under their nose and they must continue the never-ending search for that ‘perfect’ property, meanwhile economic pressures are increasing.
Lower prices are offset by concerns about inflation and interest rates and anecdotal evidence suggests that there are fewer people attending open homes and inspections.
If anything at the moment softer prices and rapidly rising rents make Sydney property a good long-term buy. With data suggesting weaker retail spending, it is likely that we can expect another year or two before inflation becomes acceptably in check, whilst the pressure on interest rates remaining.
So it is likely that the lack of competition identified in the under-$1million price range in Sydney will also remain. During that time, rents will continue to rise.
Here’s some tips for potential buyers:
- With houses, focus on land size.
- With apartments, look at the number of bedrooms (stear clear of studios and aim for two) and give preference to boutique blocks over large buildings, and avoid high strata costs – lifts, gyms and pools may look nice, but they are costly to maintain.
At present in NSW 25 per cent of household income is needed to cover the average rent, whilst in Victoria 22 per cent and Western Australia 23 per cent.