What should you really do?
If you look very carefully and/or are willing to do some cosmetic works to the house, or basically fix issues, you can find some very good buys in the Eastern Suburbs.
In fact, the fear is that you as the buyer fail to act. I have seen a few buyers who think that because prices are stable, there is no real urgency to buy and therefore they can keep waiting for the right house to pop up. However, surely there is a huge opportunity cost (in terms of time, effort and disappointment) to keep going to open homes, spending money on legal due diligence and never ever making the right offer to buy the house.
Another situation which I’ve observed is buyers who go to auction, let properties pass in and now think they are now in the power to negotiate. But only to find that the property sells shortly after auction for a price they would have absolutely been willing to pay had they not been insistent on getting a bargain.
At the end of the day, we all want a good deal. Buyers are certainly benefiting from some bargains from motivated vendors. But these tend to be properties which do not appeal to the owner-occupier market and are often snapped up by those deal hunting investors left with good equity or borrowing capacity.
However, it is difficult to get the buy of the century or to time the absolute bottom of the market. Interest rates remain low and the latest indications from the Reserve Bank suggest that the Official Cash Rate will remain at current levels.
According to the Reserve Bank, a range of capacity-related constraints also mean that many construction firms cannot expand production enough to keep up with demand. This means that supply constraints will keep prices from crashing, absent an economic shock.
As long as the purchase is something that you are comfortable (both financially and emotionally) with and allows you to move on to the next step of living your life, then maybe that’s the best decision to make.