Western Australia’s residential property market is strong. Since the start of the COVID-19 pandemic, we have seen house prices grow more than 22 per cent in Perth, sales activity increases more than 55 per cent and the median selling time drop below two weeks.
These strong market conditions have placed the WA property market into what we would call a ‘seller’s market’ - a real estate term referring to when demand outweighs supply, leading to increased competition amongst buyers and putting upwards pressure on prices. It is common in a seller’s market for a property to sell at or above the asking price as multiple buyers put their best offer forward.
So how do you get ahead in a market where there is so much demand and competition?
1. Have your finances in order
A good start is to make sure you have your finances in order. You’ll likely need to have your finance approval secured in a quick time to be competitive in a seller’s market, so be sure to seek pre-approval from your bank or financial institution so you understand your budget, limits and borrowing capacity. Obtaining pre-approval will give you an advantage with the seller too, as they are more likely to accept an offer from a buyer whose finances have been pre-approved.
2. Put your best offer forward
When buying in a seller’s market, you need to put your best offer forward. When competing with multiple buyers, you want your offer to stand out and be strong enough to distinguish itself from the competition. Find out what similar properties have sold for in the area to give yourself a solid understanding of market value.
3. Simplify conditions on your offer
You also want to make sure your offer is as uncomplicated as possible. Whilst it is always recommended to include the standard conditions in a contract (e.g. pest and building inspections) the fewer extra requests and conditions to sale you have the better your offer will look to the seller. If you are unsure, have a chat with the real estate agent for advice on what is reasonable to include.
4. Act quickly
And finally, be prepared to act quickly. In a buyer’s market, where supply outweighs demand, you have the luxury of taking your time before making an offer. That is not the case in a seller’s market. While there is no need to panic or pay over and above what you can afford, when competition is high and multiple bids are being placed on a property, you need to move fast to avoid missing out.
5. Hire a buyer’s agent
You might also consider engaging the services of a REIWA buyer’s agent to give you an edge in a seller's market.
Want more buying advice? Read our first home buyers guide.