This week, REIWA reported a paltry 3,359 properties listed on reiwa.com, stubbornly low comparative to the decade average and down from 8,117 this time two years ago. Dig a little deeper and of the 3,359 listings, 429 of them are blocks of land and 914 are units, making it particularly tough to find an appropriate family home from just 2,016 homes across Perth.
With supply so constrained whilst demand continues to rise, prices inevitable increase impacting affordability and making buyer conditions especially difficult. No doubt, it is a sellers’ market with these conditions likely to prevail until we can get more supply into the market. Real Estate agents’ buyer data bases are bursting at the seams, but because we act for the seller, agents will encourage their clients to expose their property to the widest possible market to achieve the highest price possible through competition.
no point thinking you can snag a bargain
That means a marketing campaign designed to attract as many buyers as possible, leading to dozens of groups through the home and multiple offers made. If buying by private treaty, most agents won’t declare an asking price for fear of adding a ceiling price to the process that could prove below market sentiment – a definite ‘no-no’ when discharging your fiduciary responsibility. This adds to the buyer challenge when competing, fearful of paying too much but not wanting to pay significantly more than the next best offer.
So, what can buyers do to try and get an advantage in such a competitive environment?
Firstly, buyers need to be well prepared. Have your finance (if needed) pre-approved and up to date, be clear on your preferred settlement date and research your preferred buying areas to gage likely market values for homes suited to your budget and needs. There is no point thinking you can snag a bargain in this market so if the likely market price is $1,000,000, don’t think you can buy it for $950,000.
Secondly, sign up to email alerts on the major portals and when finding something that looks promising, call the agent don’t just email them. Build rapport with the agent; if they like you, they’ll be more inclined to want to help.
Thirdly, get to the first home open early and if you can, try and get an inspection prior. Fourth, don’t be disheartened if attending a very busy home open thinking ‘you won’t get this one’ because there will be others thinking the same thing. It is not uncommon to have dozens of buyers through a property, plenty of interest, yet no offers. This ‘group-think’ mentality can work to your advantage if you’re aware of it.
Finally, when making your offer, put forward your best offer early in the negotiation, remove unnecessary conditions and propose a generous deposit. In this market, buyers will get very little chance to negotiate hard if competing with others.
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The global COVID-19 pandemic fundamentally changed Perth’s property market. When COVID hit, most property commentators predicted property values would fall by about 20 percent – they were about 40 percent wrong. Property prices in Perth have risen by 75 percent since March 2020. Rent’s have gone up by the same … Read more