There’s no doubt, it’s boom time for Australian property right now with prices growing at their fastest pace in 17 years.
According to recent Core Logic data, the value of Aussie homes is up 16.1% since this time last year, which is the strongest annual growth seen since 2004. Despite recent lockdowns, due to the pandemic, most cities around the country have seen home values continue to rise with Brisbane and Sydney seeing dwelling values increase by 2% over the last month.
So, while it’s definitely a seller’s market, is it also a good time to buy?
Investing in property is always a good idea so if you can get a foothold in this hot market, now is the time!
Here are some tips to help you prepare for securing a property while competition is fierce.
- Estimate your borrowing power
It’s important to understand your budget before you start looking at properties. There are a few different online calculators out there to estimate your borrowing power, but for a more accurate idea, speak with a mortgage broker or your bank about how much money you can potentially borrow before making an offer. Having pre-approved finance means you can make an offer without a finance clause to put you in the driver’s seat. Make sure you understand stamp duty too. Stamp duty is a government tax on certain transactions like buying a motor vehicle, insurance policy or real estate. Stamp duty on a property can also be known as “land transfer duty”. It Is a percentage of the purchase price of a property so make sure you factor this into your budget.
- Be ready to pounce
With competition from inter-state buyers willing to purchase properties site unseen, it’s important to have your ducks in a row and be ready to act quickly. Make sure you –
- Have your deposit and pre-approved financing ready to go
- Request a copy of the sale contract as soon as possible and have a solicitor look over it
- Have a building and pest inspection on standby
- Don’t sit idly by and wait for an open inspection. Contact the real estate agent directly to organize a private viewing.
It will pay to be as organized as possible once you’ve found the right property. Being proactive will help you get the jump on the competition.
- Understand value
Do your research and for those buying established, visit as many open homes as possible to get a feel for value in the current market. Attending auctions will also give you a good grounding in the value of homes in your area, and the demand for these dwellings. For those buying new, visit display homes and speak with new home consultants to gain as much market insight as you can. Knowledge is power, so if you are armed with as much information as possible, you’ll be able to make an informed decision.
- Make a written offer
Putting an offer in writing will be more appealing to vendors. While your initial offer may not get you over the line, it could open up negotiations and help build a relationship with the seller. Verbal offers can be made too but a written offer on paper carries more weight. When faced with an auction, it’s possible to secure the property before it even goes to auction, if your offer is compelling enough. Be mindful that making a pre-auction offer will either entice the seller or reinforce that competition is strong. Either way, in a market like this, don’t expect to pick up a steal before auction.
- Show flexibility around settlement
Find out what settlement terms the vendor needs and be flexible to accommodate their request. For example, does the vendor need a shorter or longer settlement to best suit their needs? Some sellers may require more time to vacate their property, in which case, offer a longer settlement. The real estate agent should be obliging with this information to help give you an edge.
- Consider building new
Buying an established home in the area you love may be great in theory, but unfortunately, unlike a nice bottle of red wine – homes built decades ago, might not age as well.
Majority of the time there’s changes to be made in order to make a home your own or simply maintain the aesthetic with various fixes required along the way.
Building a new home, whether you’re knocking down and rebuilding in the location you love, or alternatively, securing a block of vacant land you wish to build on – could provide you with more return on investment as opposed to something that requires much more maintenance.
When looking for areas to build new, it’s imperative that you do your research in order to get bang for your buck. Things to look out for are items like upcoming infrastructure and facilities such as – schools and universities, day care, future plans with access to public transport and motorways, shopping centres, parks, beach access and more. This will put you on the front foot in terms of return on investment if you ever look at selling your home in the future. And if you end up loving the area and home you live in, then doing this research is just as important as it could potentially increase the equity within the home over time in order to borrow against to increase your property portfolio. Coral Homes has various home designs and facades to choose from when undergoing a Knock Down & Rebuild project; and for those looking for house & land packages, we offer those too.