Buyers should look to capitalise on slowing market conditions and take a long-term approach to investing according to a leading buyers agent.
BuyersBuyers Co-founder Pete Wargent said the property market had started to change, presenting an opportunity for buyers.
“In early 2022, more listings have come on to the market, and overall the market has cooled as buyers are wary about the prospect of rising mortgage rates,” Mr Wargent said.
“History shows that while the capital city markets move in cycles, over time, they have delivered solid price appreciation on top of the annual rental income”
“Buyers taking a long-term perspective have an opportunity in the current market conditions to negotiate a good deal, with less competition from other buyers compared to what we experienced in 2021.”
Since September 2003, capital city detached house prices have increased in value 5.8 per cent per annum with attached dwelling prices up 4.2 per cent annually.
Mr Wargent said such strong returns should give homebuyers confidence that, long-term, property prices continue to rise.
“The easy gains for this cycle have passed,” he said.
“Buyers need to focus on quality stock to mitigate risk.
“An A-grade house on a good, family-friendly street with little noise disturbance is the ideal asset.
“But unless you have a strong budget then you may well be looking away from Sydney, Melbourne, and Brisbane.”
Mr Wargent said investors should consider looking closely at a number of suburbs in Adelaide including Kilburn, Seaford and Exeter, which have seen nearly 30 per cent growth in the past 12 months.
“We recommend investors take a look at the market in Adelaide,” he said.
“The economy has been sluggish in Adelaide over the past dozen years, and the housing market returns have been steady rather than spectacular.
“But it’s hard to ignore the value proposition now that rental vacancy rates are tightening so dramatically.
“The timing for Adelaide looks good.”
BuyersBuyers Chief Executive Officer Doron Peleg said the Australian economic outlook was strong, and this should give buyers greater confidence.
“As we previously anticipated the unemployment rate is already down to just 4 per cent, which is as low as we have seen since the 1970s,” Mr Peleg said.
“Furthermore, based on historical trends, it’s entirely possible that the unemployment rate could yet fall to 3 per cent or even lower, ultimately resulting in rising household incomes”.