Homeowners with plans to upgrade to larger properties will be best placed to capitalise on this year’s lower prices and will dominate sales, the head of Australia’s peak buyers’ advocacy group claims.
Real Estate Buyers Agents Association president Rich Harvey said upsizers would largely fill the gap left by a drop in investor activity.
Investors had accounted for nearly 60 per cent of the NSW properties purchased in 2016, but have more recently struggled to get financing from banks amid a clamp down on lending.
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“Finance will be the big game changer this year … and cash buyers will be in the driver’s seat,” Mr Harvey said.
“Gaining finance is taking significantly more time and the best weapon any buyer has to getting property secured quickly is making sure their finance is approved.”
An REBAA survey revealed upgraders who have paid a large chunk off their mortgages in Sydney and Melbourne would be able to use their strong equity position to negotiate good deals.
The buyer’s agents said they expected such upsizers to be able to buy a larger home than they could have last year for the same money.
House Search Australia’s Jacque Parker said upgraders had “the luxury of more time on their side”, with Sydney’s listings currently well up on levels recorded last year.
“(This) advantages them if they have already sold and are subsequently cashed up,” Ms Parker said.
Stamp duty relief for first home buyers and superannuation incentives for downsizers were also likely to stimulate interest nationally.
But buyer’s advocate Cate Bakos said downsizers would be less likely to capitalise on the conditions since would be fearful of selling considering the large discounting underway in Sydney and Melbourne.
“Downsizing could be problematic for some,” Ms Bakos said, adding that increased lender scrutiny was affecting higher price properties more than lower priced ones.
Mr Harvey said house hunters shouldn’t assume they would struggle to get finance.
“Buyers should not be deterred by headlines about restricted credit, instead it should be a motivator to ensure their finances are in order so the application sails smoothly.”