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Elizabeth Redman June 2, 2022

A year ago, property prices were rising fast and competition for homes was fierce. Now, prices are higher but starting to fall. So, which market is harder to buy in?

While it depends on everyone’s personal situation, buyer’s advocates are finding many clients have a chance to purchase now without being outbid by a dozen competitors offering as much as half a million dollars more than the price guide.

Sydney housing values are down 1.5 per cent since peaking in January, while Melbourne has edged back 0.8 per cent, CoreLogic’s latest Home Value Index shows, although in some suburbs the dip is deeper. But overall values in Sydney are still 10.3 per cent higher than a year ago, and Melbourne is 5.8 per cent higher.

The peak rate of growth – when prices were accelerating at their fastest pace, even if they still moved higher more gradually afterwards – was in May last year for Sydney and April for Melbourne.

“It’s definitely easier to buy now,” The Property Bureau co-founder Kristy Caskey said.

“Last year the market was just rising so quickly, so it was hard to keep up with property values.”

Caskey said clients would look at comparable sales to understand the budget they would need, but even sales from two months prior were no longer relevant because the market was rising so quickly.

It was also difficult to compete with rivals who would put in an offer after one inspection, leaving little time to do a building inspection or arrange finance.

“[Now] there’s maybe two or three bidders at auction, properties are getting to the auction date,” she said.

“It’s a lot more pleasant to be buying at the moment, even though prices are still high.”

Buyer’s advocate Wendy Chamberlain, of Chamberlain Property Advocates, thought it was harder to buy last year when the market was booming and there was competition from more parties.

“You’d go along to an auction and think you had a good shot at getting it, and you would just get blown out of the water,” she said.

“We went to a couple of auctions where I had $250,000 over the guide price… the two houses sold for $500,000 over.”

Chamberlain said these kinds of results left buyers feeling they would never be able to purchase a property, whereas now there might only be one or two bidders at an auction instead of four or five.

As for first home buyers now facing higher prices without a home to trade in that has increased in value, she said they will assess what suburb they can afford but at least face a less frenzied market.

In Sydney, Peter Kelaher, buyer’s agent at PK Property, has seen homes in his patch priced under the $2.5 million threshold fall by as much as 10 per cent.

He said the reduced competition now and higher volume of homes for sale means it is “three times as easy” to buy.

“[There’s] less competition – but you’re also in a position where your hit rate of getting a property has probably increased three times,” he said.

“Properties in that $2.5 million range are probably selling 10 per cent below, or at the market, or 2 to 3 per cent higher.”

As interest rates rise further, he expects this market segment to become cheaper and more properties to be listed for sale in the spring.

Michelle May, principal of the eponymous buyer’s agency, said whether it was easier to buy a year ago or today depends on what someone is buying, adding there were pricing pitfalls in both types of market.

Last year, price guides were being adjusted upwards during a campaign, if the agents were running the sale correctly, she said. Whereas now she is fielding email inquiries with the subject line “price adjusted”.

“Last year was incredibly tough because buyers were getting hit around the chops every time they went to auction, and left incredibly defeated and deflated because, yet again, the property went 20, 30 per cent over,” she said.

“Now the difficulty is assessing what is the right price to pay, and what is the right price to pay for which property, because there’s a lot of dross on the market first-home buyers shouldn’t be looking at.”

She said some properties are still flying at auction, such as a stylish Erskineville apartment in a converted post office that sold last weekend for $1.955 million.

Even so, buyer’s agents emphasise that trying to time the market is less fruitful than choosing a quality home and holding it through the cycle.

“You make your money by making the right asset selection. It’s almost irrelevant when you buy as long as you make sure you hold onto it long enough – typically that’s a period of five to seven years, longer ideally,” she said.

“Even if you are right, and you do end up being lucky and picking the bottom of the market, who’s to say that your property that you want is going to be for sale?”

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