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‘Don’t panic’: Investors warned to stay patient
With investors becoming more cautious amid the market downturn, a property expert has said that remaining patient and reading beyond the headlines is essential to survival.
Heading into the latter stages of the year, buyers and sellers across the nation have found themselves in limbo when it comes to transacting in the property market.
McGrath Estate Agents founder John McGrath said that while spring typically brought a fresh wave of activity, the recent market correction had turned the seasonal surge on its head.
“In its place, we’re seeing cautious buyers who are unsure how to deal with the new cycle’s ups and downs,” McGrath said.
While hesitation had crept into the market, McGrath said that the most important thing was that buyers and sellers didn’t panic amidst the new conditions and remained calm.
“All the negative headlines are making it easy to do this. But any fear this propagates won’t help you sell, purchase, or rent out a property for your ideal price.”
He said the downturn was driven by the combination of high cost of living, unrest in the Middle East, and rising interest rates, with investor activity decimated by the latest budget.
“The changes to the budget have wiped out almost all investor enquiry since the announcement, and this reduction in rental stock will place great pressure on an already hot rental market.”
He said that, at the same time, the Reserve Bank of Australia (RBA) leaving interest rates unchanged over the past two meetings, and no further rises predicted by the major banks until May 2027, indicated that rates may have reached their peaks.
Additionally, McGrath said that the recent high performance of the mid-sized capitals had provided them with a buffer against a value downturn.
“Traditionally, when markets correct like these, they come back by between 5 per cent and 15 per cent. So history would tell us we are close to the bottom.”
Having seen several downturns over his career, McGrath said something about the current one felt different.
“One of the key differences between this correction and others I have experienced is that underlying economic factors are quite stable, whereas previously we’ve had a more fragile economy.”
McGrath said the current market conditions had created a real opportunity for buyers to secure a property at a significant discount compared to what they could have purchased six months ago.
He said that for sellers looking to purchase in the same market, the situation hadn’t really shifted.
“If you’re looking to sell but won’t be buying back into the market, you might want to consider holding off a little while the market sorts itself out.”
McGrath said that both vendors and buyers should stay calm and act with patience.
“Look ahead to Christmas and next year for the stabilisation of prices and the beginning of a new cycle and with it, a strong recovery from the current downturn.”
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