Auctions move fast but buying a first home takes patience
Living in Sydney, steep property prices are talked about with such frivolity it's hard to believe we are in a former penal colony.
Those first fleeters couldn't have possibly known what they were initiating - a forum for buying and selling homes that sometimes feels closer to a Monopoly game than real life.
Take the recent $40m sale of a boatshed in Point Piper, which, while sitting on a beautifully situated 2000 square metres, is ultimately ... well ... a boathouse!
Or how about the old 1960s redbrick house in Cabrita that this month went for $8.3m. Again, it wasn't on a small plot of land at 607 square metres, but the three-bedder is apparently the smallest house on the street. It was reported that a crowd of very eager people braved a downpour to attend the auction for that property, the sort of competition that has seen Sydney's auction clearance rate spike to around 85%, as per CoreLogic.
That's very high, in case you were wondering.
The property market around Easter tends to be pretty busy but maybe not quite like this. Prime real estate, especially by the water, seems to be in high, high demand - which kind of defies the way we were all feeling about the economy not all that long ago.
So, what exactly is happening now? Do regular buyers stand a chance with this sort of cash now flying around town?
Buyer's agent and founder of Propertybuyer, Rich Harvey tells me that anecdotally demand has increased by about 20% lately but there simply aren't enough properties to go around. This is why we're seeing some hyper-activity in the marketplace.
Harvey says this level of competition is making it very tough for first-time buyers, so much so that the "bank of mum and dad" could be the only way in. Beyond a gift of that sort, the basics still apply, says Harvey: get your finances in order, work out your budget and get the numbers approved.
Further still, if you can't afford to buy in your preferred area, consider adjacent ones or other suburbs where you might just afford the median price.
Simply, aim to buy the best quality asset you can in the right area, says Harvey. "You don't want to miss the wave - you don't want to miss the market. My advice is to just get into the market at the right kind of price," he says.
"You're seeing some out of line results at the moment. But everyone's got a limit."
Keep a cool head at hot auctions
Harvey adds that first homebuyers might get scared off by auctions but that even in this overheated market, some properties won't go as high as expected.
"It's all about being persistent - keep turning up," says Harvey. "There will be a lot of misses before you get a hit. It's a tough game to play but you have to be patient, diligent and smart about what level you make offers at and at what level you pull out at.
"It is really hard to get into the market but it won't rise at this rate forever. The market will pause for breath at some point and find a new equilibrium."
So, there's no easy way in but doing some research is a good place to start. We have loads of info on our site that will help you with the current market, as well as a complete view of what's available in the way of home loans.
Our Mozo experts have actually just selected the cheapest home loans of 2021 to help.
But if you're ready to hit the auction scene, we also have some tips about how to beat the competition. Good luck!