BUYERS IN WAIT AND SEE MODE RISK
LOSING
22nd August 2006
The Perth property market continues to tick along
nicely, and while stabilisation is inevitable, buyers who opt
to enter wait-and-see mode are being warned they could be making
a big mistake.
Subiaco-based buyer's agent Liz Sterzel, of Property
Wizards Buyer's Agency, said she expected to see steady growth
even after the market settled into a new phase.
"We certainly do not expect to see a downturn
like the eastern states markets have experienced, so anyone
thinking they should sit back and wait for a bargain is likely
to end up regretting it," she said.
"The future remains bright, with healthy
long term growth and more properties coming onto the market
as spring nears - any delay in buying excellent investments
is only going to mean missing out that growth."
Ms Sterzel said buyers should consider the fact
that any savings they could build during a period of waiting,
or any promise of saving on a purchase price when the market
came off rapid boil, would fall short of any potential property
growth.
"If you consider the median house price of
$395,000 in Perth and the average long term growth rate of 8.5
percent, buyers who wait would miss out on almost $33,575 growth
in a year or more on a superior growth property," Ms Sterzel
said.
"For the majority of home buyers, it's impossible
to save faster than a solid property grows, so it's never a
good time to wait - and there are certainly no suggestions that
prices will fall either.
"We understand the difficulties some people
are facing trying to break into the market, and for those buyers
we suggest focusing on lower priced areas that have several
growth drivers to move prices up."
WHAT TO WATCH OUT FOR
Ms Sterzel warned investors against speculating
off-the-plan as many could be caught out by overvaluation and
expectation of huge growth and might end up paying more than
they should.
"Particularly in today's property climate,
a lot of investors can get their fingers burned by speculating
off-the-plan. Because initial prices can be over estimated,
it's possible to end up with minimal profit or a negative balance,"
she said.
"As the market eventually stabilises, buyers
should be wary of properties oozing little more than glitz and
glamour.
"After the boom in the late 1980's, some
houses with high price tags actually fell in value, if they
didn't have the whole package, but those properties with multiple
reasons to grow - which may have been sitting right next door,
came out shining."
WHAT TO DO
Sterzel said buyers needed to make sure they thoroughly
investigated any properties they were considering purchasing.
"We are seeing an encouraging trend in our
clients as they move away from cash flow properties and are
searching for growth potential," she said.
"Growth really is the way to go - look for
factors like infrastructure, lifestyle, proximity to shopping
centres and schools and any planned developments.
"The main pitfall for buyers at times like
these is getting trapped in 'wait and see' mode - making a good
decision to buy a solid growth home now is a winning strategy."
