There’s a locust plague at News:
Buyer’s agent Nick Viner believes now is the time to buy in Sydney and Melbourne, with many discounted premium properties available with minimal competition.
“This environment is the absolute perfect time to buy because you’ve got more time to consider your options and there’s more choice in terms of available homes,” Mr Viner, principal of Buyers Domain Australia, said.
“You also have the ability to focus on really blue chip properties in your budget. You can bag a more superior property that you can really only get for cheaper in markets like this.”
Most economists believe the total property price falls in Sydney will be within the vicinity of 15 per cent, which means some prime suburbs have already bottomed out.
“I saw the data out on Monday that the market in Sydney has come off nine per cent from its peak last year. What I’m finding in some suburbs is that price declines are probably closer to 10 to 15 per cent, even 20 per cent in some instances. I think we’re probably reasonably close to the bottom.”
“In general terms, the closer you are to the CBD the more likely prices will hold and then recover first.”
“That makes it an interesting time for investors,” he said. “I can’t recall a time where rents and sale prices have gone down concurrently.”
So why would prices stop falling then? There’s too much downwards momentum now for yields to matter. Everybody knows yield is only an excuse to lose money on negative gearing for capital growth in Australia anyway. At least until Labor removes that option.
This dill seems to think that this adjustment is all some personal choice. It’s not. Prices are falling because of a structural shift in market dynamics:
- less credit via rising lending standards and rising bank funding costs;
- interest only reset;
- fleeing Chinese, and
- negative gearing reform.
The only thing that will stop prices falling now is the next RBA rate cut coming in H1 2019. Even then it must be remembered that the market may well remain spooked. During the last easing cycle, which is still this one actually, the RBA cut late 2011 and there was little rebound until 2013 and only then when the Chinese arrived. Now they’re leaving.
Don’t get me wrong, I do expect the next round of rate cuts to have some impact. Just not for very long as the end of cycle bust arrives on top of weak markets.
Surprise, surprise. Domain is also swarming FHBs:
Real Estate Institute of NSW president Leanne Pilkington said changes to lending meant first-home buyers should initially seek to understand their borrowing power before going too far with their search.
…Wakelin Property Advisory director Jarrod McCabe said first-home buyers were generally quite cautious, but should avoid paralysis by analysis.
The Property Mentors chief executive Luke Harris said first-home buyers should be realistic, and shouldn’t expect their first purchase to be their dream home.
The first thing to do is ignore all of these horribly conflicted “advisors”. If there were a royal commission into real estate today then all of their remuneration structures would have them in the dock.
If you want to buy now then there is only one way to go about it. Start extreme low-balling every property you’re interested in and let the vendors crumble to you. Don’t bid on anything that you’re not prepared to walk away from in disgust at a greedy vendor or “advisor”.