VIC Melbourne inner east PPOR - should I wait?

I've been looking for a PPOR in Melbourne for a few months now (focusing on villas and single-storey units in inner east suburbs like Blackburn, Donvale, Surrey Hills, Mont Albert, Burwood, etc). Lots of inspections, made a few offers, but nothing yet.

But now with all the fuss about rate rises, price drops, etc, I'm just wondering if I should hold off buying for a while, maybe a few months or even the end of the year? Or only make significantly lower offers? I'm just worried about buying at a peak price if I can get a better deal later in the year. Plus even if my borrowing capacity drops due to the rate rises, based on my lender's calculations I can still buy what I want (I only plan to borrow less than 75% of the bank's limit).

On the other hand, if these are considered "blue chip suburbs", would they be likely to hold their value well, and waiting could just mean missing out on a suitable property? I've been reading a lot about how I shouldn't try to time the market for a PPOR, especially since I plan to hold it for the long-term.

 

We're living in an existing PPOR, so there's no issue with lease timings, etc. I guess we can effectively wait as long as we need to wait for a good deal.

I've been seeing media hysteria everywhere about double-digit price falls over the next few years, which makes me wonder if it's worth waiting a bit longer before buying. But on the other hand, I'm not sure that waiting too long will be useful, and I don't know enough about the property market to be able to time it.

Too true...when we first started looking we saw a few places that were "perfect!" for us, but almost a week or two after we'd see another place just as good, or even better!

 

Nobody does. And they're lying if they suggest otherwise.

 

I wouldn't pay any attention to the media, they don't know your circumstances.

Buy when you find the property that meets your long term requirements.

 

Wait…… until when?

 

I would def wait a few months at a minimum. Every agent I have spoken to across Mel has mentioned things just (in the last week/10 days) really softening up so you might want to start putting offers once there is some clarity and whilst I always belong to 'anytime is a good time to buy', the current circumstances merit waiting a while..

If you start seeing MoM data coming in and accelerating for reduction in prop values and 50 basis points locked in for a few months, you are very likely to pick up something at a better price point in a few months from now Vs now. The properties I see now are still tracking peak/ near peak for their asks and I wouldn't buy now.

I foresee a minimum of 15% reduction in price point on a like for like basis in 6-12 months from now.

 

Patience is a virtue. What I told my daughter who is looking to buy primary residence with partner in Melb

Market is softening what I am hearing from re agents

IR are rising

Market sentiment is changing from positive to negative

More stock coming to market

Auction clearances dropping, fewer buyers

What does the above tell you?? Me thinks prices will fall, just dont know how much??

 

I think lifestyle locations have held their own, but IR rises and change in market sentiment will impact on all markets

 

Except perth

 

31 Fraser st Glen Waverley sold 14/5 $1.385m
9 Torbreck st Glen Waverley sold 18/6 $1.295m


Virtually identical homes (similar land size, bedrooms, Torbreck has better fitout) 500m apart.

7% variance in price in just over a month.

 

Perth flying under radar sort of

 

Orientation, building defects (things like water damage/mould, the need for restumping or roof repairs), neighbours and the vendor's circumstances could also explain the price difference.

 

The lower priced one is North Facing and needing considerably less work internally whereas the Fraser st is east facing and in much less liveable condition than Torbreck.

 

Glen Waverly area, am sure East facing home has its own premium. I live here for the school, as a tenant.

 

If prices do fall, would most potential sellers be likely to just hang onto their properties and only the desperate ones would sell? I've started noticing there seems to be less properties being advertised now even compared with April/early May (although I don't know the exact figures, just a rough guess when browsing domain/realestate)

 

That's the big question, which is impossible to predict. Will sellers only sell because they have to? The higher rates rise, the more sellers will have to sell. But that also depends on employment looks like and whether owners pull back other spending. Which make cause a recession and impact jobs, but it might also cause rates to fall.

The doomsday scenario would assume inflation goes out of control no matter what rates do, even if we have a recession, and wages don't catch up, and lots of sellers have to sell and/or sell because they think it will fall further. You can wait for that to happen. If it happens.

But if it doesn't.......you get 2018/9. Or maybe early 2000s. Then when do you buy?

BTW I don't try to predict what happens. I just look at what outcomes I can live with. Just for myself, I can't live with a boom if I don't own anything.

 

Well what’s the premium then? Both addresses are above

 

Is that a scenario where might prices drop a bit, then rise again?

(I tried googling it and found articles saying prices dropped in 2018 but rose in 2019)

 

Why premium for facing East?