We are starting to see increased media accounts of slowing housing price growth, falling auction clearance rates and lower borrowing figures. Call me a cynic, but I often see these stories before we see any evidence at “ground level” of a slowing market. However, they often end up being self-fulfilling prophesies. As buyers start to read more negative property stories, they begin to believe them. Add this to a healthy dose of wishful thinking (haven’t we all been wanting prices to drop?) and we begin to see caution creeping into the market.
What happens when buyers are cautious? Usually the first thing we see is a fall in auction clearance rates. People suddenly no longer want to compete for property. We hear the phrase “we’ll just wait and see what happens.” Instead of deciding what they are prepared to pay (then bidding over their limit), the punters wait to see what price the vendor wants and then decide whether that represents value or not. So, if you are the only buyer prepared to bid at an auction, the power is actually in your hands to negotiate a good deal.
If a property is passed in at auction then advertised at a reasonable price, you can still see competition as buyers will react to a well-priced property. However, if it is perceived as being over-priced, buyers will not make offers. Then the property gets a stigma (there must be something wrong with it). Often these turn out to be great buys after spending a long time languishing on the market.
For more information on buying property in Sydney go to gooddeeds.com.au.
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