Investors looking to buy are in for a rough ride as the property market improves nationally, with under market-value properties becoming a scarcity.
While real estate agents ‘love’ investors when times are tough, according to director of Right Property Group Steve Waters, the exact opposite is true in boom times.
“When the market isn’t so good and agents are struggling to sell property, they love investors who come to an area and get things moving for them again … But agents are notorious for forgetting about you when the market heats up,” he told Smart Property Investment.
With investors seeking to purchase under market-value, vendors who accept ‘low ball’ offers are eating into the agent’s potential commission.
According to Mr Waters, markets nationally are getting to the stage where agents don’t have to rely on investors as market momentum draws bigger sales numbers and prices.
RP Data figures show that housing nationally has gone from strength to strength, with dwelling values jumping 1.9 per cent over June and 1.6 per cent over July, but returning to more ‘sustainable’ levels in August – increasing by 0.5 per cent.
Director of wHeregroup Todd Hunter added that as more investors hit the market, it becomes more difficult to successfully purchase under the median house price.
“If a $300,000 property is in one of these ‘hotspots’ and a dozen investors are lining up to buy it, but it’s perfect for your portfolio and you need to have it. How much would you offer?
“If you don’t offer the full asking price, then someone will and you’re going to miss out,” he explained.
Mr Waters believes that as more and more ‘mum and dad investors’ turn to property, people should be wary about purchasing in investor hot spots.
“I think because the market is so hot in some areas, investors have got to be very careful I believe, especially those who are jumping on the investing bandwagon.
“If you’ve missed the market, find another area where you haven’t missed it – if it’s a hotspot, you’ve missed it.”