Buying A House In Melbourne

Buying a house in Melbourne is a risky task with many factors that must be considered to avoid a real estate money pit. 

Problems like high maintenance fees, poor capital growth, low rental yields and the high cost of money.  

All these issues will affect your bottom line when you sell as most of them can’t be fixed. So it’s wise to buy the right property first time around to avoid the headaches.

When buying property off the plan or building from scratch, most of these issues are difficult to spot as you’re trying to work out how the house is going to work off an architectural drawing.

In addition to the above, every builder in Melbourne is struggling to deliver newly built property due to the increasing cost of material & labour. This has created an environment where buyers are reducing their risk and buying property from the established marketplace creating a shortage of supply or an under supply of property, we call this a seller’s market.

Purchasing in a seller’s market is difficult and for some reason attractive as there is a feeling of missing out and everything seems to sell.

How do you know it’s a buyers market? Attend an auction, you will see multiple bidders and the sale price will be well above the quoted advertised price. 

Many successful investors understand how to profit from market cycles, Warren Buffet famously said ‘buy when people are selling and sell when people are buying.’ This simple rule works with any sort of investment.

Taking the above into consideration, 2024 is a great time to buy a house as the housing market is tipped to increase in value over the next two years due to a shortage in property. The key is buying the right property for the right price so when it comes time to sell, buyers are competing to buy your place.

Mistakes Buyers Make When Buying Houses 

‘Only 5% to 10% of the property on the market at any one time is suitable for long-term investment.’

Mark Ribarsky, Wise Real Estate Advice.

Buying property is one of the most expensive assets you will ever own.

Regardless of your lifestyle or property needs,  if you’re an investor or a home buyer, eventually the property will translate into a resource for the next step in your life.

Hence, maximising your property purchase today will give you tangible and intangible benefits for the future.

Let’s look at what buying a bad house looks like:

• Too far from the action: To attract future tenants and home buyers tenants proximity to schools, shopping centres, employment, major infrastructure, walking tracks and natural amenities will make any property in any suburb attractive.

• High future maintenance: In 2024, the cost of any renovation can be substantial. A structurally sound property that has been well maintained through its life can save you allot of heartache and make ownership of property easier.

• Not the norm for the suburb: Buying an apartment in a suburb full of houses? Or a house in an area with only 2-bedroom units?Knowing a suburbs demographics and the type of housing they need is wise, it will attract future tenants and buyers, minimise vacancy rates and selling time on market, increase rental yield and sale prices.

• The property is too close to:

• • • • • the neighbours: If your sharing boundary’s, walls, or a roof line, you could be subject to living next to nosy neighbours that distract you daily.
        • Main roads, train tracks or future infrastructure. If you analyse all the property sales in a suburb for a period to time you will notice cheaper property sales when a home faces a main road or train tracks.

• The price seems too good to be true. When a property is presented for sale ‘the devil is in the detail.’ Not doing the right due diligence when buying can cost you allot of money, inconvenience, or have trouble in re-selling. Be cautious if:

• • The agent is selling with an Auction method of sale.
  • A home has been for sale for more than a few months.
  • Missing paperwork or council permits for any completed works.
  • Minor signs of structural defects.
  • A house that has been freshly painted.
  • Real estate agents that are vague with details.

How To Play The Housing Market To Your Advantage In 2024

‘Two are better than one, because they have a good return for their labor.’

Ecc 4:9-12.

Looking at Melbourne’s big brother property market Sydney, an entry-level 2 bed, 1 bath, 1 car unit sells for approximately $1M. This is almost double Melbourne’s entry-level unit price.

Why is it so expensive? Sydney is a world class city that migrants and businesses flock to.

Melbourne is showing signs of not being far behind Sydney when it comes to popularity.  Melbourne experienced the highest migration and employment rates in Australia, and the established house market is eyed as affordable in comparison to Sydney.  

To ensure your property ownership journey is successful, you have to make the right moves pre-purchase. Having a good team to ‘steer your ship’ by influencing your decision-making saves you time, money and headache.

To getting this advantage your advice needs to come from experienced fields like builders, real estate agents, mortgage brokers and solicitors. Each has an important role to play in your assets long-term success.

If you’re great at networking or have many skilled uncles and unties they will prove to be valuable assets when buying property.

Using A Buyer’s Agent To Do The Work For You

Buyer’s agents are experienced real estate buyers that understand what makes an average property vs an excellent property.

They spend all there working hours looking at property that’s for sale and negotiating deals with real estate agents. In addition to their property experience they used to be real estate selling agents, hence understand the ins and outs of negotiating a property purchase.

Their role is to short list the best property on the real estate market.  This includes property that is off market, inspect and conduct the due diligence on the property then negotiate a great price via an auction or private treaty negotiation.   

If you’re considering buying a house in Melbourne, consider how a professional property buyer can ensure your success, contact Wise Real Estate Advice for an obligation free chat.