Everyone has an opinion on the property market. Some will say the market’s slowing down. Others will say it’s crashing. And a few will say “I think the market’s okay because people keep telling me it is, but I’m not really sure why”. Bottom line is, everyone has a view on home values and where we are in terms of the property cycle.
While no one knows exactly when the market has reached its peak, or if it is about to hit an upswing, but looking at some key figures can help you determine where the market is heading and put you in a good position to negotiate a better deal.
Not all markets are the same
Researching the area you plan to buy in is easy. But what many people don’t realise is that across Australia, there are many markets, not just one.
The buoyancy of the market, as well as buyer demand and property price growth, can vary from suburb to suburb – and even within the same neighbourhood. That’s because the location is a key decider of value growth and buyer demand. For example, figures from CoreLogic show Melbourne’s median home value has dipped 4.7% over the last year but the most expensive end has fallen by more than this (down 9%) and the most affordable end has actually increased in value (up 2.9%).
Auction clearance rates
Auction clearance rates can be a handy barometer of market health. According to CoreLogic, only around 43% of homes being put up for auction actually sell on auction day. That sort of low clearance rate can be a sign of a buyer’s market.
But again it comes back to local knowledge. In Sydney for example, over 64% of homes in the western Sydney suburb of Blacktown are selling at auction. That’s far higher than the average Sydney clearance rate of 42.7%. Similarly, in Melbourne’s inner suburbs, around 60% of homes are selling under the hammer compared to one in three in the north-western suburbs.
Information is power
This sort of information is extremely useful to home buyers and investors though it’s not always easily accessed by individual buyers. Staying ahead of the property game means pulling together as many insights as possible about things like market, home loan rates, how much you can borrow, and how much room you have to negotiate on a property’s price. Harvest Property Loans can provide key industry statistics and identify which loan from our wide panel of lenders is best suited to your needs – as well as advise on how you can improve your chances of securing home loan approval in today’s market.