What are the 4 opportunities for property buyers right now?
Are you looking for opportunity in the current market?
Yesterday the Reserve Bank of Australia raised the cash rate by 50 basis points to 1.35%. Most media headlines are doom and gloom for the property market but if you remove the media noise, there are great buying opportunities right now.
They are buyers looking to upsize, take advantage of distressed sales, recently priced out or looking to expand their investment portfolio.
Upsizing
Believe it or not, there can potentially be a net gain for home buyers that upsize in a decreasing market. There are many factors to allow this such as challenges to serviceability but for some it Is a great option. Let’s take a look at an example.
To keep it simple, let’s assume you lived in a home that was worth 1 million but has dropped 15%. Your property is now worth 850 thousand.
You want to move to a bigger home in a better location that has also seen the market drop 15%. This property was worth 1.8 million at the peak but is now 270 thousand dollars cheaper at $1,530,000.
The new property has almost lost double the amount of yours and their loss is your gain. Once the market rebounds you will be in a much better financial position too.
Distressed Sales
These are for the bargain hunters. The main type of distressed sale we are noticing is when vendors have bought a new home before they sell their existing. It is not a market where you can have complete confidence in selling your home quickly, or for the amount it may have been worth at the start of 2022.
Understand that if a vendor is in this situation, you are in a great position to leverage it when forming your negotiation strategy.
How to find out? Build a good relationship with the selling agent and ask all the right questions.
Don’t rely on distressed sales but be aware that they are increasing.
Recently Priced out Buyer
You may have started your property journey but were priced out of your desired suburbs. Instead of being willing to compromise on location, revisit what is happening in your desired suburbs. Prices may have declined which now gives you the opportunity to purchase.
Investors looking to expand their portfolio
Now is a great time to expand your portfolio if cashflow and serviceability allows. There will be distressed sales to take advantage of, less buying competition to compete with, better locations now available for your budget.
As always be aware of your cashflow situation and point you can comfortably leverage in the current increasing rate environment.
If you think you need help taking advantage of the current buying opportunities, we’d love to chat with you. We can help you save money when buying on the Central Coast.