2019 will be the year of the home buyer as tighter lending conditions force many investors out of the market and present new opportunities for home buyers, according to Australia’s largest professional body representing buyers agents.
Real Estate Buyers Agents Association (REBAA) president Rich Harvey said with interest rates earmarked to stay low and with fewer investors in the market, 2019 would be a great time for home buyers to move on or up the property ladder.
“The market has certainly softened in many parts of Australia but for those home buyers who are sitting on their hands and waiting for the market to keep falling, they may find they miss out,” said Mr Harvey.
“There are many factors that will make 2019 a great time for home buyers to take advantage of the opportunities that a softening market presents and we’ll certainly start to see more first home buyers coming into play.
“Tighter lending conditions will see buyers competing against fewer investors and with less competition and fewer people bidding, home buyers should be able to negotiate some good deals.”
Here are REBAA’s five reasons to buy property in 2019:
1.Rates are more likely to go down than up
With property pundits predicting interest rates to stay on hold in 2019, buyers have the added security that their mortgage repayments will stay relatively stable, provided they can properly budget. With our economy in a sound financial position there is no reason for the RBA to raise rates in the foreseeable future.
2. Tighter lending conditions by banks will see fewer investors in the market
Fewer investors, means less competition and less competition means more opportunities for home buyers. Negotiation will be crucial to securing a good deal so independent buyer representation from an accredited REBAA buyer’s agent is highly recommended. Investors who have finance approved, or are cash buyers, are encouraged to take advantage of softer market conditions.
3. Great time to upsize or downsize in a softening market
When you’re buying and selling in the same market, it’s immaterial how much further the market is predicted to soften. Those who are considering upsizing or downsizing should act now and take advantage of less competition in the marketplace. Although vendors may be cautious about selling now, what they lose in the sale price, they should more than make up for in their buy price. Lower prices are attracting more first home buyers back into the market too as evidenced by a rise in first home buyer loan applications.
4. Natural population growth and migration will continue to drive future demand
In 2016-2017 Australia’s population was among the fastest growing in the OECD with an increase of 1.7 per cent.* Net overseas migration was 262,000 in the same year, one of the highest levels on record.* In order to support this population growth, Australia needs housing. The simple equation of supply and demand will continue to drive property growth.
5. Federal election will present an ideal opportunity to buy
This year’s pending Federal election could present opportunities for astute home buyers and investors with less competition at auctions and open homes as historically, people tend to sit on their hands in the lead-up to elections. Market sentiment is adversely impacted by elections, but the dedicated buyer is out there every weekend seeking to find that ideal property regardless of the political landscape.
*Peter Macdonald, Professor of Demography, Centre for Health Policy, University of Melbourne