On paper, it’s a scenario guaranteed to make recent buyers very nervous.
Since prices peaked across Australia in September 2017, they’ve continued to fall, with the biggest markets in Melbourne and Sydney cooling significantly.
Both are now buyers’ markets, with auction clearance rates consistently in the mid-50s. And experts warn there is plenty more downside to come – although clearly there is an upside for some.
“It’s great from a buyer’s perspective,” Real Estate Buyers Agents Association of Australia president Rich Harvey said.
“From our point of view it’s about time.
“The market’s been in the seller’s favour for a few years, so it’s time to have the upper hand.”
Even first-home buyers – or anyone else who might be jittery at the thought of having little equity and a big mortgage in a falling market – need not be too fearful.
First up, research is crucial.
Would-be buyers should ensure they thoroughly understand the recent market in the areas they are looking to buy, as conditions could change quickly.
“Have a good understanding of current sales in the last week or two, because the market can change to that level,” Mr Harvey advised.
With careful research and property selection, the coming spring auction season offered opportunities to pick up “good quality assets” with reduced competition.
“By trying to time the market and find the point where it’s reached its bottom, it might start to turn up the other way by the time you find the right property and you’ll end up paying more,” Mr Harvey said.
“People need to be careful about becoming obsessed with a zero-risk approach.
“There’s always risk with property.”
Wakelin Property Advisory director Jarrod McCabe said many buyers have become extremely cautious because of the sudden end to the price boom. But too much caution might mean missing out on opportunities altogether.
“We’ve had the ‘fear of missing out’, the FOMO disease, replaced by the fear of overpaying,” he said.
“Buyers need to realise it’s a natural part of the property cycle: a slight correction in the property market.”
Mr McCabe said buyers could take advantage of the cooling market if they played their cards right. They should take a long-term view, and take advantage of lower prices while “the market’s taking a breather”.
“The market’s gone sideways for a bit but will start going back up again,” he said.
“We still have good levels of immigration coming in and strong jobs growth, the right drivers to keep property market going forward.”
“Sound principles of property selection” were key to ensuring buyers found assets that would appreciate in value over the years.
“Buy in areas close to shops, schools, transport, with the right amenities and features,” Mr McCabe said.
“There are good opportunities to be had at a much cheaper price than you were paying a year ago.”