Australia’s home buyers might be pulling out from the property markets, but several bargain-hunters can scout for better deals in high-end property if they are committed to research and seek out auctions, a property expert said.
The statement comes as auction clearance rates have continued to drop in major capital cities, with Melbourne’s rate even falling below 70 percent as demand slipped due to increasing interest rates.
David Morrell, a buyers’ advocate, said the property market has turned, and now homebuyers are not putting up with such high prices and as demand drops, bargain-hunters can seek out a more reasonable price.
"We’re seeing bargain hunters in the expat community, specifically. We’re also seeing others looking for bargains. They waited while the market went up, and now are beginning to search around," he said.
Morrell said he was surprised at the property market’s volatility, as demand has considerably slowed compared with last year’s performance.
"The market has had a train smash. The caution light is on, and for the first time in nine months we’re not chasing vendor expectations. You’ve only got to look at the property that was passed in at the top end to see this, because it isn’t going for as much at all."
Now is the best time to look for good bargains, he said. He advised that homebuyers should first research the area in which they intend to purchase and know it well.
"Clearance rates, median prices, don’t listen to it. You’ve got to go into these individual properties, see the level of interest and work out how the area is performing. Property is very area-specific, so you need to get your hands dirty."
"The reason for this is because you may have a wrong impression of something. A house could have sold for $2.3 million, but there may have only been one buyer. If that house has five bidders, it changes things. Get out there and find out."
Morrell also explained that buyers need to look for auctions as the best way to get a bargain.
"In a rising market, auctions hurt because you’re in such a competitive environment. In falling markets, auctions work for you because you can see what’s happening directly. You know if no one else is at an auction, and therefore can work that lack of demand."
"This is why you’re seeing more emergence of interest programs in high-end property now. Because there isn’t as much demand and bargain hunters need to look for that," he added.