02 Aug Making the most of a buyer’s market
Although dropping housing prices can be challenging for sellers, there are several ways to take advantage of the current market. As competition drops, interest rates fall, and discounts continue to mount, those with the cash to buy are in an excellent position to invest in property. If you make the right move in the current climate, your investment can potentially double or triple in value over the coming years. The wise real estate marketing consultant can take advantage of this, helping their clients to get once in a lifetime deals and massively expand their wealth.
Here are some basic ways that the slowing property market can translate to profits:
1. Prices are Dropping
This one almost goes without saying. The key to making money from investments and trading is to buy low and sell high. To do this well, you have to have your finger on the pulse. You have to know when the prices reach their trough and they’re ready to rise. Prices have dropped nearly 30% in Sydney and Melbourne since 2017. And, when we’re talking about property values in the range of millions, this means huge savings. But there’s no rush to buy immediately, as prices are continuing to fall. The key is to work with knowledgeable mortgage marketing consultants so that you maximise your profits on the investment.
2. Time for an Upgrade?
Although you may have to take a hit when selling, it’s possible to leverage this into a new property. The biggest housing bubble ever recorded is finally seeing deflation. One benefit of this is that trade-ups are easier in the current market if you’re smart and you do your research. You can get a great deal on a property with a better location or more ideal living conditions for your family. Remember to check out auctions to find well spec’d homes at significantly discounted prices.
3. Developer Incentives
As challenging as it is for buyers and sellers to keep up with changes in the market, developers can find it even more difficult. Apartment development projects often take a year or more to complete construction. Buildings that were begun when the market was hot are end up being finished when the prices are flagging, meaning that a flood of new apartments go on the market and developers are highly motivated to attract tenants. In fact, this offers opportunities for mortgage marketing consultants, as some property groups will offer bonuses of up to $10,000 for brokers, accountants, and advisors for referrals that lead to a sale. Buyer incentives include rebates, appliances, and interior upgrades among other things. This can significantly sweeten the deal both for buyers and brokers.
4. Discounted Lending
First-time buyers are a hot commodity in the lending market, especially when they have deposits of at least 20%. These borrowers boost profits for lenders, increasing dividends and leading to executive bonuses. This means that many lenders are offering great rates and discounts for selected clientele. This is an opportunity for brokers as well, as they can act as intermediaries and broker solid deals while maintaining margin. Brokers can knock up to 15 points off while still making the loan attractive to borrowers. Brokers can also waive documentation fees, legal fees, or moving costs to make the loan more accessible for new buyers.
5. Seller Discounts
The auction market has experienced a general cooling off, pushing sellers into private negotiations that allow them to sweeten the deal for prospective buyers. As sales continue to decline, vendor discounts are on the rise, with an average of about 4.9% for apartments and 4.6% for houses. Sellers are also pushed to increase discounts when properties remain on the market longer. With the right research and connections, it’s possible to corner a great deal with a buyer eager to sell. Not only does the drop in competition give buyers more time to negotiate, it also offers them better leverage as the negotiations go on.
6. Rent is Dropping
In the current market, many landlords are pulling out all the stops to retain their tenants. Translation? Rent can be capped or lowered. This increases the renter’s disposable income and offers more savings. While this isn’t great for property owners, renters now have a better chance of storing up the deposit for a home purchase. Average rental yields are dropping nationally in Sydney, Perth, Darwin, and Brisbane as supply outstrips demand. This creates great opportunities for new buyers and longtime renters.
If you’d like to know who to speak with about saving money or building wealth in the current market, feel free to contact us. At 101 Things, we’ve got expert contacts that can help you make informed investments and improve your standard of living.