Despite the seemingly gloomy environment for housing due to the mortgage rate rises, the overall state of the market is actually presenting an opportunity for first-home buyers to make their move.

Zippy Financial director Louisa Sanghera said now is a good time for fist-time buyers to break into the market, on the back of a market lull that dampens the dwelling prices.

“I do believe it’s a great time for first home buyers to purchase right now – especially in Sydney because we have seen such a significant softening in prices since last year,” she said.

August figures from CoreLogic showed declines of 2.3% monthly and 2.5% annually in the median dwelling value in Sydney.

Dwelling values in Melbourne, Brisbane, Hobart, and Canberra also went down monthly and annually over the past month. On a national level, median prices went down 1.6% monthly but remained 4.7% higher than last year.

Ms Sanghera said even with the continued hikes, home loan rates remain relatively affordable by historical standards.

“First home buyers really need to be out there purchasing over the next six months, because this market lull is not likely to last forever,” she said.

The increase in listings, especially in the current spring-selling season, is another reason why Ms Sanghera believes it is an opportune time to take the plunge.

“Not only has there been an increase in property listings, especially in Sydney, but there also are far fewer buyers active in the market, which creates optimal buying conditions,” she said.

“My advice for prospective property owners is to strictly keep to their budgets, as well as calculate their potential future mortgage repayments by adding about one percentage point to the home loan rate on offer.”

Buyers Agency Australia founder Dragan Dimovski shared similar insights, adding that the market will soon see revitalisation when interest rates stabilise next year.

“That means there could be less than six months for buyers to take advantage of the current buyers’ market, where discounts of 10% to 15% can be found with reduced buyer competition,” he said.

“People will become accustomed to the new interest rate levels once they stabilise, just as we were comfortable borrowing and buying when the cash rate was over 7% back in 2008.”

Reasons why buyers are discouraged to continue

Even with good market conditions, some buyers, particularly the ones with pre-approved mortgage, are still struggling to break the barrier.

Hello Haus chief negotiator Scott Aggett said pre-approved finance is not a ticket that ensures the certainty of getting a property.

“Buyers are getting their finance pre-approval, but difficulties afterwards with locating and negotiating on a property are causing them to take considerably longer than they should to contract,” he said.

“When they do purchase, most will have substantially compromised on what they set out to buy in the first place.”

Most buyers, on average, take around seven months to purchase after getting approval from lenders. Furthermore, Hello Haus research found that 45% of buyers who was able to purchase typically feel remorse after.

Mr Aggett said this reflects the lack of properly planning when purchasing.

“They’re being reactive, not proactive. They are responding to decisions in the throes of a property search or negotiation — that’s when stress levels are at their peak,” he said.

Here are five common reasons why pre-approved buyers are still taking too long to purchase or are even discouraged from buying:

  1. They can’t find the ideal home.

Mr Aggett said buyers must have a clear idea of what they want in their home before commencing their hunt for properties.

“People don’t focus enough on their ‘must haves’ and ‘nice to haves’ when starting the search — You should build a shopping list of criteria and be really honest about it, this way you can confidently rule out many listings,” he said.

According to Hello Haus research, buyers view 300 properties online and in person before the act, which indicate that they do not filter their shortlist enough to avoid buyer fatigue.

  1. Some are constantly missing out.

Buyers typically miss the first five properties they make an offer on, leading to them overpaying and compromising.

Mr Aggett said there are four things buyers often overlook, including the value of speedy decision, asking the right questions, understanding of the buying process, and knowledge of market dynamics.

“As a result, they rush or miss steps in the due diligence period and second guess each decision as they lack confidence to take the necessary action,” he said.

  1. Stress overwhelms buyers.

DIY buyers are prone to feeling the pressures involved in the process.

“Stress often comes from agents underquoting or game-playing during the marketing campaign, this is amplified when buyers don’t have rapport with a local agent network,” Mr Aggett said.

“The best cure is seeking expert assistance — outsourcing to an unemotional professional is the ultimate salve for stress and anxiety.”

  1. Buyers are in the losing end of the negotiation.

Independent buyers are often at a disadvantaged by selling agents who are good at negotiations.

In the end, many buyers overpay for their purchase, believing that what they paid for is just right for the property.

“Most buyers will only purchase three or four times in their lives, so they just don’t gain the experience necessary to excel at negotiation,” Mr Aggett said.

  1. Panic causes buyers to compromise.

Mr Aggett said buyers who are taking too long to find their ideal property often end up in panic and compromise.

“But then those compromises go too far and burn out prospective purchasers who feel they are simply giving up too much of what they want to try and secure a home,” he said.

“Worse still are those who spend more than they intended on a home that’s less than ideal.”

Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Update resultsUpdate
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
6.06% p.a.
Principal & Interest
  • Low rates for purchase and refinancing
  • Simple online application process
  • No fees, unlimited redraws, 0.10% offset 
5.94% p.a.
5.95% p.a.
Principal & Interest
5.95% p.a.
5.95% p.a.
Principal & Interest
5.99% p.a.
5.90% p.a.
Principal & Interest
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of .


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