Last Updated: 23rd May, 2024

Home-Buying Strategies For A Competitive Property Market

Published by Otto Dargan on September 15, 2023

If you’re in the market to invest in property or looking to buy a home, the current landscape demands your attention. The property market has recently had a surge in auction clearances and home sales, indicating a highly competitive environment.

If you’ve been in the market, looking to capitalise on the relatively soft demand that preceded this surge, we understand the shift may be a bit of a shock. A change in tactics is probably in order.

Don’t worry, our Home Loan Experts brokers can help you compete in this tougher market.

Strategies For Buyers In A Competitive Market

The CoreLogic Home Value Index (HVI) highlights the market’s shift, with national home values increasing by 0.8% in August, marking the sixth consecutive monthly rise. Since hitting rock bottom in February, the national HVI has surged by 4.9%, adding approximately $34,301 to the median dwelling value.

Rising home values may be making it tough for you as a homebuyer to find a property that fits your budget. However, we are here to help you navigate this surging market and come out ahead.

In such a competitive environment, buyers need a well-designed game plan. Consider these insights from senior mortgage brokers Jonathan Preston and Vivienne Than to help you navigate the challenging Australian property market effectively:

1. Budget wisely

  • Set a realistic budget and be prepared to act quickly when you find a property that meets your needs.
  • Being ready to make offers with minimal contingencies, such as a very short finance clause or cooling-off period.
  • Being willing to pay fair market value for a property, as finding bargains is increasingly rare in the current market

2. Research thoroughly

Arm yourself with information about the areas you’re interested in. Understand recent sales, price trends, and local market dynamics. Additionally, Preston recommends:

  • Attending numerous open houses (50+ if possible) to become familiar with all available properties in your chosen region.
  • Requesting property reports to gain confidence and ensure you have all the necessary information. We can help you get a free upfront property valuation report. Call us on 1300 889 743 to find out how.

3. Get professional advice

Assemble a team of homebuying experts. This may include real-estate agents, financial advisers, conveyancers, or mortgage brokers who can evaluate your financial situation. Preston suggests that you may need to consider the following:
  • Employing a buyer’s agent, but if that’s not feasible, then
  • Making friends with local agents who might help you find off-market properties.
  • Having a conveyancer in place so homebuyers can feel confident about making their offers.

4. Prioritise your must-haves

In a competitive market, you may need to compromise on some aspects. Identify your non-negotiables and be flexible on other features. For instance, if having a specific number of bedrooms is not negotiable, you could be flexible about the size of the kitchen or having a backyard.

5. Get pre-approved

Both Preston and Than emphasise the importance of a pre-approved home loan. Having a pre-approval before you start house hunting can give you a competitive edge in negotiations and help you move quickly once you find a home you like.

6. Don’t be swayed by urgency

In the fast-paced world of real estate, it’s easy to feel pressured to make quick decisions. However, Than advises that patience is your ally when making one of life’s most significant investments. Here’s how to stay composed:
  • Making offers tailored to the vendor’s wants and needs, provided they’re within your budget and being flexible with the settlement date.
  • Being prepared for the possibility of buying a property with an existing lease agreement, especially when dealing with investment properties.

7. Consider alternative areas

Preston suggests:
  • Exploring different areas for potential opportunities if your preferred location is exceptionally competitive.

Expert Tips To Boost Your Borrowing Power

In your pursuit of the perfect property, we understand the importance of maximising your borrowing power when getting a home loan. Here, Preston shares invaluable tips to help you enhance your borrowing power and achieve your homeownership goals.

Tip 1: Leverage A Guarantor For A Stronger Application

Consider the assistance of a guarantor to bolster your application’s strength. A guarantor mortgage allows the lender to take into account your guarantor’s finances, which may allow you to borrow more than if you were taking out a mortgage on your own.

Tip 2: Increase Your Income For Greater Negotiating Power

Increasing your income is one of the best ways to boost your borrowing power. This can be done by getting a raise at work, taking on a second job, or starting a side hustle. A higher income not only increases your borrowing power but also positions you favourably with lenders.

Tip 3: Explore The Option Of Family Gifts

If your family members are willing to help you financially, consider accepting a gift towards your deposit. This can free up more of your income to go towards your monthly home loan repayments.

Tip 4: Consider Non-Bank Lenders For Maximum Flexibility

Non-bank lenders often have more flexible lending criteria than traditional banks. This means they may be willing to lend to you even if you have a lower credit score or a higher debt-to-income ratio.

Tip 5: Clear Other Debts To Improve Your Capacity

Any debt that you have outstanding will reduce your borrowing power. The more debt you have, the less you will be able to borrow. So, paying off as much debt as possible is crucial if you want to boost your borrowing power.

Tip 6: Scrutinise Your Expenses

Take a close look at your expenses to identify areas that may be affecting your borrowing power. This includes private health insurance, private education, and other non-HEM (Household Expenditure Measure) items. Cutting unnecessary costs can improve your financial standing.

We Can Help You!

At Home Loan Experts, our team is driven by a passion for assisting you throughout your home loan journey, from finding the right home loan to navigating the property market’s twists and turns. Experience the difference with us – reach out for a consultation today, and let us guide you towards your property goals. Call us at 1300 889 743 or complete our free online assessment form.