How low can property prices go?

How low can property prices go?

Actually, can also ask this instead. How long can home owners hold versus having to sell their properties during a slow period? Perhaps the home owner is desperate to sell? Perhaps the owner could hold for a very long time?

It can also be how long can potential home buyer wait and see while continuing to pay rental or whatever payment if the house they are eyeing is for own stay. Perhaps the buyer desperately needed to move out from his current place? Perhaps the buyer was just buying for the sake of buying?

Many different questions depending on which side of the fence you are and which side you like to support. So, which side would you like to support then? Well, in Sydney and Melbourne, it’s not so rosy at the moment when it comes to property prices. One reason often cited is the rise in rates meant that buyers are less enthusiastic to buy. By the way, most of the homes in Melbourne and Sydney are sold by way of auction yeah.

Article in smh.com.au Cooley Auctions managing director Damien Cooley said this about what is in buyer’s mind. “They’re nervous about, if they buy this property for $2 million, is it going to be worth $1.8 million in six months time?” “That doesn’t mean they don’t like the property – they think, ‘We’re going to sit on the fence for a bit, and wait for the bottom’.”

AuctionWorks chief auctioneer Jesse Davidson agreed some buyers are worried about the value of their new asset falling. He said, “That’s one of the concerns, and typically, buyers are always trying to pick the bottom and pick the top.”

“The truth is no one knows … it’s too hard, it’s too difficult to tell.”

In Melbourne, Marshall White director John Bongiorno said because buyers are mindful the price of their property will fall, they are saying they are in no hurry to purchase. He said, “It is one of the catchcries you hear in the marketplace – buyers aren’t in a hurry to buy unless they find the right property at the right price.”

Buyers’ advocate and Wakelin Property Advisory director Jarrod McCabe said, “The concerns that buyers have, and that they’re factoring in, are interest rate movements.” Here’s that article in full yeah. Article in smh.com.au

Ask these 3 questions instead?

Have you compared and see if the current price is already below similar areas elsewhere?

Have you viewed enough properties to know if the price actually has gone down by double digits and is really value for money?

Could you actually buy the unit and hold it in case there are some uncertainties?

If the answer is a Yes, then it is much safer to buy versus just asking whether the price will rise or whether the price will go lower. Whether higher or lower, there has to be a comparison. We cannot compare if we have no knowledge about what we are comparing. Think about it. The only way we ever know something is cheap is because there are expensive things and vice-versa.

I viewed over 20 properties before buying my first one. Some say 20 is too few for the first property. Haha. It took me 2 months to decide whether to buy my second property. Yea, I know, pretty crazy. Third one took a few days. Fourth one, I bought 2 days before the brochure arrived at my doorstep. Fifth one took me 45 minutes. If you do see me in some talks, you can ask me about the rest. Haha.

Yes, I love properties. Happy thinking about it.

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