It may have been the year’s most popular TV show, but the 3.43 million viewers tuning into Channel 9's The Block were not enough to cajole Australia’s flattening property market.
Just one of the four properties renovated for the show made a profit, and the results are a blunt reminder of the reality facing vendors throughout Australia.
Experts predict house prices will continue to decline until June 2013, and the latest NAB Australian Residential Property Survey has shown that the Australian housing market continues to soften, with nationwide house prices having fallen by 2% in the June quarter.
Data from NAB reported that house prices fell in all states during the most recent period, with the largest falls seen in Queensland (-3.7%), South Australia and the Northern Territory (both at -2.7%) and Victoria (-2.4%).
However, despite appearances, it is possible to find a bargain in the current scenario, provided the investor does good research, and has sound business considerations. Some tips for navigating your way through the current housing market include:
1. A low price tag does not necessarily equal a bargain. Defence Housing Australia's Tony Winterbottom says it is not always about price. He gives the example that to realise the bargain in a renovator’s special, you would have to invest a lot of your own time. In the end, you may be better off paying more and using your time for other money-making pursuits.
2. Look for positive signs of change in the prospective neighbourhood. For example, are more schools being built, is public transport expanding, is a major retailer opening or closing, is it a safe place to live?
3. If you’re look at entering the market, keep a close eye on the properties you’re considering. University lecturer, author and property investor, Peter Koulizos says, “the longer a property languishes on the market the keener the vendor is to sell”.
4. Try to find out why the property is being sold. If the vendor is relocating they’re more likely to negotiate a good price, rather than if they don’t have to sell. Margaret Lomas of Destiny Financial Solutions says, when making an offer, never tell the agent your maximum price. If the vendor refuses to negotiate, move on to another property. There are plenty of bargains to be made.
It can be confusing to know whether to get a variable rate or fixed rate mortgage, and what features are important. That's why it's important to not only check the right rates, but make sure that you're getting the right features in your home loan. Get help choosing the right home loan