Multi-offers and auctions return - a return to a more "Normal" Market

 Multi-offers and auctions return

You will have noticed that it’s been quieter in the Property Market, and that the widely reported news is that property prices are in decline, lending applications are at a long-time low, interest rates are still increasing, inflation is still out of control and that there will be an oversupply of new builds/property in the coming year or so ahead.

Yeah – Ok, fair enough, you would have had to have been hiding under a rock not to have witnessed some of these factors playing out over the past 6-12 months.

But there’s another perspective – and it’s from the coalface.  It’s based on my day to day experience and that of other Mortgage and Finance Advisors I have spoken to in recent weeks

We are back to multi-offers on established properties again.  In the past couple of weeks, I have had 4 separate couples/clients competing in multi-offer situations.  2 succeeded and although the other 2 initially missed out, 1 succeeded with another property (again in multi-offer situation) and the other is currently looking to make a pre-auction offer (they are pretty focussed on securing this one now that they realise the market is more competitive again).

We are back to pre-auction offers being made (because there is competition for properties and buyers are eager not to miss out).

Lending is being approved for as little as 5% deposit and more and more available for under 20% deposit for First Home Buyers.  The doors are opening wider by the month as the banks loan books are readjusted and positioned for new business in the higher LVR lending range (and as they see the downside risks reducing).

The overly restrictive CCCFA Legislation introduced by Labour late last year has been largely peeled back to a far more pragmatic approach/set of requirements and the banks are increasing comfortable with taking a more sensible approach to how they assess mortgage lending applications.

Spring is in the air (it feels it’s earlier than usual?) – open homes are busier and, as mentioned above, aspirational buyers are acting and, interestingly, Vendors have renewed confidence in their ability to negotiate a better sale price – not quite a sellers’ market but certainly a more balanced market than in recent months.

Sellers and buyers’ expectations have had 6-9 months or so to align and so, a natural equilibrium seems to be forming in the market.  From this recent activity and my first hand exposure to it (through helping clients secure lending and having to work with them as they make offers), it’s arguable we are at or near the end of decline and settling into a more “normal” market.  It’s either a little bit of an early spring and a dead cat bounce or the market has found it’s bottom and confidence has returned.

Within my client base, pre-approval requests and unconditional purchases have tripled in the last month or so (compared to the last quarter – April-June).

If you are a first home buyer, know of a first home buyer or if you are a home owner who wants to determine options for leveraging your existing equity to purchase an investment property – ensure you are positioned to take advantage of this time in the cycle and get ahead of any radical changes to government policy by which time the floodgates will likely open up again and the market will be on the upward cycle.