As the property market continues to show strong growth due to undersupply, low credit and a strong case of FOMO, it is becoming tougher for investors to pick up a bargain.
In a recent episode of The Smart Property Investment Show, the CEO and co-founder of Cohen Handler, Simon Cohen, discussed the challenges of the market and the advantages of going through a buyer’s agent.
In what seems to be a “crazy market”, investors will still get ahead if they take a long-term view on property based on strong fundamentals, suggests the buyer’s agent.
“What’s 1.2 now, that seems crazy, it’s probably going to be 2.2, so everything seems crazy now, but if you have a long-term view on property or you buy the right property, it’s always going to be a good investment,” Mr Cohen said.
As auction clearance prices continue to be well above reserve, host Phil Tarrant reminded investors that auction prices are not necessarily the fair value of a property.
To avoid overpaying, Mr Cohen suggested a buyer’s agent who knows the area will be able to save investors from overpaying.
“A good buyer’s agent, they’re going to know what else is around at any given time,” Mr Cohen said.
Mr Cohen highlighted that one key benefit of having an agent is their relationship with real estate agents, allowing investors to purchase properties off market.
“It’s a lot easier competing against a seller to buy a property, than competing against three other buyers who push the price up. And if you can try and get yourself into that position, you’re going to be in the back seat when you’re trying to buy a property,” Mr Cohen said.
Using the example of property in North Bondi, Mr Cohen explained how investors can save thousands by buying off market, compared with investors who have seen properties online.
“Semis in North Bondi that were 1.6 and now selling for 2.1 because there’s very little Semis online on the market in North Bondi.”
“But if you know the off market stock and you realize there’s stuff, you can get awful pre-market for 1.8 or 1.9 instead of paying 2.1 for that property at an auction. You’re going to have a very different view, a very different perspective,” Mr Cohen explained.