Buyers' market now for real estate

12 April, 2005

Home buyers who can handle a rise in interest rates could snatch a bargain as Australia's housing market softens, say real-estate analysts.

Australian Property Monitors (APM) research director Louis Christopher said auction clearance rates were down and it took longer to sell a property with some vendors forced to reduce their asking prices to make a sale, particularly in capital cities.

"Buyers who can book into their budgets another rate hike and are still feeling comfortable should probably have a sniff around because it is a buyers' market and you can get some decent value out there right now," Mr Christopher said.

But Mr Christopher also said many sellers were choosing to sit on the sidelines and await the next upturn.

In February, housing prices were discounted for sale by as much as 7.9 per cent in Sydney, with lesser falls in asking prices in other capitals.

This was in contrast to the discounting levels of only 4.5 to 5 per cent during the boom period, Mr Christopher said.

"This is not to say the median price has definitely fallen, but overall we think it does represent the fact that housing prices have been heading south," Mr Christopher said.

APM said if the Reserve Bank had raised interest rates last week, Sydney and Brisbane would have fared the worst.

"It wouldn't have been a pretty market if we'd had another rate hike," he said.

Peter Degotardi, chairman of Herron Todd White property advisers, said prices had flattened and listings volumes were down.

"It has been a sellers' market but the worm has turned and now it's a buyers' market," Mr Degotardi said.

Real Estate Institute of Australia president Ian Wells said the slow-down had been overdue, particularly in Sydney where prices had been on the rise for 10 to 12 years.

Buyers with enough cash could take advantage of the downturn.

"I think this is when people look for opportunities," Mr Wells said.

"It could be the first home buyer but they would want to have a reasonable deposit."