Homeowners and property investors should “stop worrying” about recent falls in prices and focus on the long-term outlook for their properties, real estate magnate John McGrath claims.
The McGrath Estate Agents founder and industry veteran revealed in a recent Switzer Daily column that he believed the worst of the current downturn was “already over”.
He added that there was plenty for homeowners to still feel positive about, including a low interest environment.
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The lower rates meant recent buyers were best off chipping away at their debt and hanging in there until the market improved in the long-term, Mr McGrath said.
“If the capital value of your home has come back a bit, it doesn’t matter because you’re going to be there long-term and prices will eventually rise again,” he said.
McGrath also discouraged investors from panic selling, suggesting there was no need for new landlords to come up with a rapid exit strategy from their recent purchases.
“Don’t feel compelled to get out,” he said. “It won’t take long for Sydney and Melbourne to rebound … these are two major international cities with many unique factors keeping property prices strong. You just have to be patient while the magic of capital growth takes effect.”
CoreLogic’s latest hedonic home value index revealed Sydney prices have fallen nearly 11 per cent since their peak in July 2017. Further falls are expected this year, with Moody’s Analytics forecasting a 3.3 per cent drop in the value of all dwelling types.
Mr McGrath said it was understandable for buyers who bought at the peak of the market to feel frustrated with recent market movements.
“I understand your disappointment in terms of timing but please don’t despair. No one can pick the top — and that includes me, and I’ve been around in real estate for 35 years.
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“There will always be people who happen to exchange at the peak but try to remember you are one of many — thousands of people did the same thing. What’s important now is for you not to panic.”