By Rich Harvey, CEO & Founder, propertybuyer.com.au
The property market is a hot topic of conversation at the moment with a range of positive and negative drivers all pushing and pulling on sales activity and prices – but that won’t last forever.
According to many market analysts, 2023 should be the year when things settle down and price movements even out. As interest rate increases abate, buyers and sellers will become more confident about where values sit and a less “exciting” market should result.
But boring isn’t bad when it comes to real estate prices. In fact, flat markets can deliver terrific advantages to buyers.
Here’s why I believe 2023’s predicted levelling could prove to be a benefit for purchasers.
Less stress
One of the most trying things about a fast-moving market is that decisions need to be made quickly. If prices are rising at a rapid rate, buyers want to secure their homes before the next value bump. When prices are falling, sellers don’t list and purchasers must pick through what’s available, often making compromises along the way. It can be really tough making a decision on whether to act immediately or hold off under these circumstances.
But flat markets tend to be a different beast. When prices stay level, buyers can take their time seeking out their options. They can look at properties over a longer period and consider the pros and cons of each opportunity without the anxiety.
Accurate analysis
Speak to anyone who assesses market value for a living and they’ll tell you that fast-moving markets give rise to a world of challenge.
Professionals rely on sales evidence to determine value. Now, unlike shares or equities, there’s a relatively long lag time in real estate between agreeing to a price and closing the transaction. Most will be at least a thirty-day settlement.
When markets are rising or falling at a pace, sales evidence becomes less reliable more quickly. This makes it incredibly difficult to determine current value accurately which in turn affects your offers and negotiations.
In a flat market, you can assuredly use sales statistics and other data knowing that conditions haven’t changed that much since the information was collected. It delivers a degree of confidence that makes for better decisions.
Flat markets lead to booms
In my long career in property, I’ve rarely seen a flat market be a precursor to a fall in prices. While people talk about property prices moving like a wave, they’re actually less regular in their rises and falls.
In fact, most major markets follow a familiar pattern. There’s a period of sharp price rises followed by a stage of moderate falls before things flatten for some time. Then, the market starts to ramp up towards a boom once more… rinse and repeat.
We are in a moment now when the flat market is at its beginning. This means you have an incredible opportunity to prepare for that inevitable increase in values.
Less frantic competition
Flat markets mean that prices have pretty much found a point of equilibrium between sellers and buyers. One thing I have noticed is that with no frenzy in the market, buyers become more considered about the properties they choose to bid on. There’s no longer the urge to lock in something… anything… and be damned the cost!
This more discerning approach among the buying collective results in an absence of panic, which delivers a benefit to all when it comes to sensible prices.
Better buying experience
When price movements are less crazy, we see the buyer/seller relationship become even-handed and more amicable.
We find negotiations are far more open and are easier. By working with agents in our long-standing network, we can bring deals to a satisfactory close and it’s a better transaction experience for all.
There’s also a good chance to establish solid relationships with the agents operating in your area of interest during a flat market. They aren’t being overrun with offers and are more able to take the time to understand what you’re seeking. We get great agent call backs during periods of uneventful price movements.
Flat markets needn’t be considered dull. With the right knowledge and an experienced property buying expert by your side, you can take advantage of the inactivity and set yourself up for an excellent outcome
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