Property market commentary is almost always focused on the numbers but unless you are a significant property investor, many of these statistical observations may not be that helpful to the “mum & dad” buyer trying to read the market.
When buying the family home, as long as you buy and sell almost simultaneously under similar market conditions, then the state of the market is almost irrelevant.
In fact, upgrading your home in a slow or falling market is beneficial because if you assume a property market has fallen say 10 per cent, your $550,000 home might only fetch $500,000, yet your new home previously worth $770,000 now sells for 10 per cent less at $700,000; a $20,000 benefit.
This is an extreme example, but in this current market it is definitely the top end that has had to discount more than property priced around the Perth Metropolitan Region median house price of $545,000 for the year to December 2015. Metropolitan wide, sellers are having to drop from their original listing price by an average of 6.1 per cent in order to sell.
Buyers are in a holding pattern at the moment with many of them reticent to commit to a purchase perhaps fearful of a retreat in the market. If you are a first time buyer, then such reluctance is understandable but upgrading buyers ought to proceed with more confidence.
Based on previous market behaviour it is somewhat inevitable that property prices will continue to rise over time and, affordability constraints aside, those hesitating to buy when there is so much choice about is counter intuitive.
In a rising market when people gain confidence to buy, stock levels fall as demand increases and choice becomes so constrained that many buyers are forced to buy houses inadequate to their needs.
Others choose to rent whilst waiting for the right home but ought to be mindful that in the event their dream home comes to market, finding a replacement tenant in a flat rental market can be harder than you might think.
Sure, be choosey, take your time and re-visit homes on your short-list more than once but don’t wait for the market to turn and for your choices to lessen.
For more information about how Perth's property market is travelling, visit the WA market page on REIWA.com.