As they go onto a softening phase, Sydney and Melbourne have become buyer’s markets—providing several investment options to property buyers, including the greatest deals and bargains. How can investors take advantage of these buyer's markets?
Buyer’s markets essentially give the power to the buyer, allowing them to enjoy more choices and even bargains. In contrast, a seller’s market allows vendors to increase prices and get good returns, thanks to high demand.
Experts, therefore, advised against selling properties in the near future to avoid suffering from loss due to negative equity. Instead, investors are encouraged to take advantage of the multiple buying opportunities across markets.
“You want to be able to move quickly and take advantage of the opportunities as they present themselves.” mortgage broker Ross LeQuesne highlighted.
To be able to make the most out of investment opportunities this year, Mr LeQuesne advised investors to be finance-ready.
As banks and lending institutions continue to implement conservative lending practices, drawing out the process via strict serviceability assessment, investors who are well-prepared to get a mortgage will definitely have a unique advantage.
According to the mortgage broker: “To be finance-ready means you have a pre-approval in place. To get a pre-approval, you need the necessary documentation such as your bank statements, your payslips, credit card statements, ID and so forth. You want all of those handy to be able to apply for credit.”
“And, of course, look after your living expenses, especially in the three months before you're applying, because that's what the banks are going to be looking at.
“It's really all about sticking to that budget and getting a pre-approval in place up to the maximum limit, then you're prepared to get a property.”
Apart from being mortgage-ready, Mr LeQuesne also highlighted the importance of understanding the market through research and ‘being on the ground’ when trying to make the most out of a buyer’s market.
Basically, the best strategies will always involve the basic fundamentals of property investment research.
He explained: “Be on the ground, talk to agents, find out what the true value of the properties are.”
Relationships with agents and other local property experts will also come in handy during this time, when markets are unpredictably fluctuating and bargains are spread across different, even lesser-known, areas, Mr LeQuesne said.
After all, some of the best property deals are often the ones yet to be advertised.
“Quite often, like in anything, it's not what you know, it's who you know. When you’re able to establish this kind of relationship, if a good deal comes up, the agent will be on the phone to you quickly and you will be able to take advantage of that knowing that they're pre-approved and ready to go.”
With all the available deals and bargains, a buyer’s market are often a tad more competitive than a seller’s market—further highlighting the importance of being backed by a local agent.
“It will, of course, depend on the work that you put in yourself and how hard you're prepared to do your research and negotiate. Obviously, a buyer's agent takes a lot of that away from you.”
“It's a changing market now that, often, it's better to have a buyer's agent because you need to have a read on the market and a true understanding of how it might fluctuate. If you're not using a buyer's agent, you're probably competing against a lot more well-educated, sophisticated, professional buyers,” Mr LeQuesne concluded.