The media has been fixated on it for months: It’s a buyers market! Perth’s property slump! Perth prices to continue to fall! It’s true, overall, market conditions are now very different to what they were last year, there are currently just under 16,000 properties on the market (up 27.5% on twelve months ago) and REIWA calculates that the median house price fell by 3.6% over the September quarter from $550,000 to $530,000.

But properties are still selling, people still need homes to live in, and there are properties defying the touted conditions and still attracting significant buyer interest and multiple offers. It seems that every other day I meet another buyer getting sucked into the “buyers market” spin who is missing out on buying a great investment property or home for themselves or their family because they believe the property sky is going to fall in or have become overly fixated on getting a steal. And if that’s you, you might want to re-think what you’re hoping to save and consider instead what it might be costing you.

Here’s my advice for buying in a buyers market.

1) Realise that the property market is not homogenous. Different suburbs and different property categories within a suburb perform differently – always have, always will. If there’s an excess of a particular type of property in a particular suburb coupled with reduced buyer demand of course it will impact on selling prices, but those conditions aren’t universal.  Medians and averages are just that – some parts of the market will be, and are, performing much better and some will be performing much worse. Generalising market conditions won’t help you buy your dream property more cheaply. Smart buyers aren’t silly – they understand the subtleties, recognise good value when they see it and pay a fair price accordingly.

2) The bottom of the market will have been and gone before you get to know about it. There is typically a minimum two month lag between when a property is sold and settled and the sale price being recorded by Landgate – for higher priced properties or subject sales it’s typically even longer. Then you’ve got to wait until all the transactions for the month have been processed before the statistics start to get churned out. REIWA tries to do a more current version of median price changes for each month or quarter based on member reported sales but these aren’t always accurate and can be swayed by increased activity within certain price brackets. And they’re only ever a snapshot of the overall market and don’t reflect the individual elements within it.

Markets can turn within weeks. For example, September was (and often is) a slow sales month whereas our October sales have already surged well past last month’s with over a week still to go. Whether the uptick is a trend, seasonal or a blip remains to be seen but the fact is once the market turns (and it will) the bottom will have been and gone and you will have missed it. And it could turn in one sector, suburb, property type or price bracket well before another.

It’s time in the market and not timing the market that’s key.

How much is my property worth?
We'll prepare a full appraisal report of your property based on our vast local knowledge and market activity.
No addresses found. This could be a new address, or you may need to check the spelling.

3) Most properties listed for sale are already priced to meet the current market. Of course there’ll be exceptions where agents haven’t been honest with their sellers or the sellers expectations are above where the market is it at, and hey, agents are only human and don’t always get it right! But please don’t call me asking to view a newly listed property before the first home open because you think it’s going to sell quickly and in the same breath start talking low offers. Surely the reason you called me was because it looked like good value?!  Oh, and if a property has been on the market for a while and recently had a price adjustment, perhaps it’s now reflecting fair value too?

4) Sellers (and their agents) don’t like dealing with jerks. Sorry if that’s a little blunt, but it’s true. Buyers who think they can steal a property by playing super hard ball rarely do. Selling homes is emotional, and most sellers, being human, want their home to go to someone they think will love it as much as they do, not someone who seems intent on trying to screw them for every last cent.  When you choose to take the win-lose route to negotiation and start with lowball offers, include one sided conditions, insert deadlines or make threats the only one likely to lose is you. Not only can a seller simply refuse to negotiate with or sell his or her property to you (and believe me, it happens), but if you’re in competition with other buyers you won’t be getting a look in. Negotiate by all means, but give the agent a chance to get the deal done for both of you.

5) Do you want to buy it?! This goes hand in hand with 4). If you genuinely want to buy a property, don’t lose sight of the wood for the trees. By digging your heals in on a deal you won’t have saved yourself a few thousand dollars, you’ll have lost yourself and your family a home. Isn’t your life more important? Yes there will be more houses, but trust me, whenever you look back you’ll wish you had bought it. That said, if you genuinely believe a property isn’t worth what the seller is asking or you can’t afford to pay the extra they want then just let the agent know nicely and let it go – trust that it wasn’t meant to be.  But if your focus has become about winning rather than the outcome, then take a step back, remind yourself why you made the offer in the first place, and genuinely look to see what you could reasonably give in order to achieve a win-win outcome.

And finally 6) What would Warren do? Warren Buffett, noted Investor, Philanthropist and the third wealthiest person in the world (according to Wikipedia) famously said, “Be fearful when others are greedy and greedy when others are fearful.”

Following Warren’s advice, I’m thinking that now might be a pretty good time to buy. But I’m in for the long haul, so a few more adjustments, if they come, won’t spook me.