The share market spruikers are at it again, talking down Australia’s favourite asset class.
Yet real estate values are still up 8% for the last 12 months, compared to shares which fell by 10% over the previous financial year[i]. And you’d have to dig deep into the online commentary to find that the cryptocurrency market shed almost 6% of its value on a single day in late July, with its total market cap dropping below $1 trillion[ii].
Due to the commentary noise, some property buyers are starting to ask whether they’d be better off taking a wait-and-see approach to real estate. The answer is a firm no, from Angus Raine, Executive Chairman, Raine & Horne. “The old saying is that the best time to buy is when you can afford to and your finances are in place,” he said.
“If you are an owner-occupier, regardless of the market, a change of circumstances such as divorce, new job or extra mouth to feed might drive the buying decision-making.
“If you buy a home to live in, you will be in the property for 5-10 years. If it is a well-located, quality property, you will see the property's value grow, so lock it in now.”
Still plenty of markets to consider
Angus urges buyers and vendors to see through the noise. “Have property prices fallen significantly?” Angus asks. “Sydney’s values are off a few percentage points, while in Adelaide, dwelling values were up almost 4% over the last three months, and they’re also up in Darwin and Perth.
In Darwin, in late June 2022, a four-bedroom family home at 74 Rosewood Crescent, in Leanyer[iii] a northern suburb of Darwin, attracted several offers from four southern investors in the $500,000s. The southern investors were convinced Darwin values were flattening. Glenn Grantham, General Manager, Raine & Horne Darwin, said, “A local owner-occupier has since secured the property for a price in the upper $600,000s because he recognised this was a fair price for a quality, well-located family home in the popular northern suburbs.
“Other properties have similarly received realistic price offers from local owner occupiers and interstate investors who ignored the outside noise. These buyers recognised that Darwin offers excellent affordability and yields as much as 8% in some cases.”
Adelaide market continues to tick along
According to James Trimble, General Manager of Raine & Horne, in Adelaide, the market continues to tick along as genuine vendors continue to sell as genuine buyers compete for every property as mortgage interest rates are still relatively low.”
For example, James reports that buyer enquiries are still running at 2021 levels in the south-eastern suburb of Blackwood in the foothills of Adelaide.
“There’s no evidence that Adelaide real estate is heading into a price lull. With our more reasonable school fees, more affordable housing, and interest rate cuts now on the horizon, there’s never been a better time to buy into Adelaide real estate.”
Finally, Angus Raine warns buyers and vendors to beware of the sources quoted by the media and YouTube experts looking for a headline. “Just remember two years ago when COVID hit and all the doom and gloom headlines for real estate. The gloom didn’t eventuate.
“In my 35 years in real estate, the so-called pundits who predict real estate crashes have never got it right. What does a so-called expert sitting in a Sydney office know about the real estate market in Leayner Darwin or Blackwood in Adelaide?