Perfect time to upgrade! 09/09/12

Property owners are now taking full advantage and cashing in on the slowdown of the Melbourne property market.  The current conditions have seen that the median price of a house in Melbourne has fallen by 5.3% to $535,000 over the 12 months to june.

What this has triggered is a confidence in home owners looking to trade up as there is no longer a short fall in premium or quality properties like we saw earlier on this year. With there being more available properties of this kind on the market, it means that there is less competition on certain homes as there are fewer buyers to every home premium home on the market. This  means that discounts are available to buyers looking to purchase in a higher price bracket.

What most buyers or sellers tend to forget in a slowing market is that there are huge opportunities if you are looking to trade off between your current home and an upgrade. Most individuals believe that it would be crazy to sell in a slow or falling market unless of course you really have to. This is not always the case.

Imagine you have a property worth $450,000. If you were to decide to sell that property in a slowing market, you would still have an arsenal of buyers looking to purchase a property just like yours. Such buyers include first home buyers, investors, people downsizing or maybe even someone upsizing. The point is, the property is certainly at an affordable level and a level in which many buyers would like to purchase. What this means is that although you may be selling for slightly less than what you would have in a “booming” market, you will not be effected to the extent of those with more premium properties.

Now imagine you wanted to use your cash (after selling your property) to now go and purchase an “upgrade” home for  around $900,000. This home is clearly far more expensive and would be considered a “premium property”. The person selling this home is in a far more vulnerable position as to taking a hit in line with market conditions. There are less buyers in the market place looking to secure their home. The everyday investor certainly isn’t looking to purchase a property at 900K, a first home buyer is not looking to purchase a home at 900k and for people downsizing, 900k is up there in terms of price unless of course they are purchasing a penthouse / luxury apartment. This means that because there is less competition in the property the buyer looking to “upgrade” their home is in a fantastic position to secure some great savings off the back of a slow property market!

There are always ways to win in property. It does not matter if the market is sitting stagnant, booming or slowing. The key is to look for opportunities that will put you in a better position and execute them properly!

Sam Rapke

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