What's Happening with the Property Market?

I was reading an article in the newspaper last weekend that provided a full list of Sydney suburbs, and where property values have dropped and those that remain stable. I found it interesting that there wasn’t more of a downward shift, given that borrowers’ maximum lending has dropped significantly as the home loan interest rates are increasing.

I spent last Saturday visiting open home inspections with a client, and it clarified why the market hasn’t moved in accordance with the interest rate rises. The fully renovated, or cosmetically renovated properties were commanding a large number of inspections, and strong competition to purchase, so in those circumstances, prices haven’t dropped. However, for the unrenovated properties, we were either the only people inspecting, or one of a few. In the cases I have seen, those owners are rejecting offers lower than they would’ve received a few months ago, not yet accepting that they need to meet a declining market to sell their property.

In the case of renovated vs unrenovated, I am hearing a lot of clients fearing the prospect of undertaking renovations, so that also explains the much higher demand for renovated properties. It is proving difficult to engage tradies to provide quotes and take on the work, and material prices have increased significantly. Without being able to come up with a budget, or obtain multiple quotes, buyers are choosing not to buy unrenovated properties.

There is potentially an opportunity here for those who are willing to ride out the tradie shortage, and perhaps buy a property for a figure lower than they may have a few months ago. Is the property liveable with a paint/new carpet/blinds and then hold off for a little while to complete more substantive renovations? Or as a property investor, is it rentable in its current state? Finding a motivated seller who is struggling to pay higher interest rates, or has already bought their next property could result in a purchase at a lower price.

If you’d like to find out how much you can borrow, either as an owner occupier or an investor, please call me on 0414670151 or email jennifer@jblhomeloans.com.au