How to buy in a tight spring market - John McGrath

Cotality research director Tim Lawless recently commented that vendors are in a strong position as they head into what will be a very active Spring selling season.

I couldn’t agree more. Buyers should prepare to compete against larger than usual crowds at open homes and auctions - and not just because Spring is traditionally the busiest time of year for real estate. Both sales and rental markets in areas like Brisbane, Adelaide and Perth are still very tight.

Cotality’s September Home Value Index showed these cities have some of Australia’s highest annual dwelling values and rental growth. In Brisbane, yearly house values have risen by 6.4% while house rents have increased 5%, with very similar figures in Adelaide and Perth.

This Spring is also seeing much more first home buyers as well, many of them likely encouraged by the federal government’s recent announcement of an expanded Home Guarantee Scheme. A recent report from the Commonwealth Bank and Proptrack revealed that despite affordability challenges, there have been more first home buyers on the market in the past year than in the 2010s, or even before the pandemic.

There’s certainly several good reasons for both new and experienced buyers to purchase this Spring, with a major one being the Reserve Bank of Australia’s three rate cuts this year – the first in almost five years – to 3.6%. As a result, buyers’ borrowing capacity has increased and could rise further, with more cuts expected this year and in 2026.

Then there’s the latest data from the Australian Bureau of Statistics, which shows real wage growth is at its highest in five years while our unemployment rate has stayed at the low 4% mark for four years.

So whether you’re an experienced or a first time buyer, here are my top tips for you.

1. Be swift but smart

In the current seller’s market, you’ll likely see homes sell within days of being listed, and for more than their asking price. So be prepared to move very fast. But you should still do your due diligence before buying. Have you obtained pre-approval? Have you checked recent comparable sales? Have you explored the local area and ensured it’s close to the amenities you need, including schools? Have you organised a building and pest inspection and do you have a solicitor or conveyancer on stand by?

2. Ensure your offer is attractive but realistic

With properties selling fast right now, your purchase offer needs to stand out from the crowd. You may also only have one chance to impress the vendor like this, as they know there’s plenty more buyers to choose from if your offer isn’t attractive.

For an auction sale, making a pre-auction offer can be a good idea. If nothing else, it can save you the stress of competing at auction. But again, make sure you’ve done your due diligence and never offer more than you can realistically afford.

• Consider off-market purchases or other locations

Off-market buying can be a great idea in any market or season but in a seller’s market, expanding your search like this is a smart plan. This type of purchase can be far less competitive than on-site buying – a key factor in today’s very driven market – plus prices can be cheaper. While exploring this option, you should also investigate different locations and property types to your preferred one.

If you’ve been waiting for the right time to buy, this Spring may bring the opening you’ve been looking for. Interest rates have eased to their lowest level since April 2023, and improved borrowing capacity means greater opportunity for buyers. And, as long as you do your due diligence, a home is an asset that you’ll never regret.