Posted On : November 9, 2022

The 5 Risks of Waiting For the Market to Drop

The 5 Risks of Waiting For the Market to Drop

Many buyers are wondering, should I buy now or wait? We are finding that many buyers are pulling the hand break, deciding to wait until early next year to buy their home or investment property.

The sentiment is that buyers are waiting for the market to drop, even further, and are fearful of overpaying in the current market.

But, are you aware of the hidden risks of waiting it out?

From our years of Buyers Agents in Brisbane experience, we see this all too often and the outcome is the same every time. Instead of listening to the media hype, become a smart buyer and understand ALL the risks and opportunities to navigate this Brisbane market.

Here are the 5 RISKS to be aware of if you are choosing to wait for the market to ‘drop’.

Risk #1 – The Crowded Return

Over the recent months, we have experienced a drop in the number of active buyers in the Brisbane market.

This tells us that many buyers that were actively looking to buy at the start of the year are now choosing to wait.

But, if the majority wait, it is likely that they will also all enter back into the market at the same time.

When the interest rate rises finally begin to settle, we anticipate that a crowd of buyers will flock back into the Brisbane market.

One of the key drivers of increased property prices is competition.

We all experienced that throughout covid.

While no one has a crystal ball, our advice is to buy now.

As more and more buyers are deciding to wait, the competition in the market is becoming less, leaving YOU with a greater buying advantage.

Don’t run the risk of entering back into a crowded market.

Take advantage of the opportunities that exist now, with less competition and more negotiating power.

Risk #2 – Borrowing Capacity will Reduce

While you may be waiting for property prices to drop, so will your borrowing capacity if you wait too long.

As the interest rates rise, banks will begin to re-evaluate their lending capacity for home buyers as their repayments will be increasing.

So while you may save a few thousand dollars IF the market continues to drop, you will very easily pay this regardless within your increased mortgage repayments.

OR you may not be able to purchase within the price bracket you were first looking at…

So, while buyers are waiting for property prices to drop, potentially, so will their borrowing capacity.

Buyers that are ‘waiting’ are risking not only coming back into a crowded market but they are also back in with less money to offer.

Risk #3 – Time of the Year – Switch ON not OFF

In the lead-up to Christmas, people begin to switch off on the ‘big plans’ and start preparing for the holiday season ahead.

Within this time, we find buyers also begin to ‘switch off’ from the property search.

A theme we notice with many buyers is the need and want to get IN before Christmas.

As we near closer, the likely hood of that occurring is slim and so, the pool of buyers active in the market begins to decrease…

This provides the smart buyer with a great opportunity to secure a property with less competition.

So, in our opinion, NOW is the time to switch ON and BUY, otherwise, you risk missing great buying opportunities due to the reduced buyer demand…

Risk #4 – Past Events Predicting the Future Market

While everyone else is buying into the media hype and fear, at UBA our feet are on the ground daily. This provides us with the ability to consider the current ‘actual’ market trends while also looking back on past trends to ensure our team and clients are remaining 1 step ahead.

One of the biggest consistent trends in the property market over the past 30 years is the spike after a fall. Dating back to the 1974-5 Recession, while property prices plateaued, they all spiked back shortly after.

This rise in property prices after a major economical event has occurred time and time again throughout the last 30 years.

So while no one has a crystal ball, we are predicting that this market will follow suit once again and begin to rise once it gets through this property lull.

Will your ‘wait’ be too long?…


The 5 Risks of Waiting For the Market to Drop

Risk #5 – Take Advice From Those Who Have Been There Before

We often refer to the classic and widely relevant quote from Warren Buffett,

“Be fearful when others are greedy, and be greedy when others are fearful.”

Right now, other buyers are fearful. Fearful of overpaying, the market dropping, the list goes on.

But, the true reality is, a smart and successful property deal is made by firstly understanding the difference between a great opportunity and the wrong opportunity. A great deal can also be created through strategic negotiations. You just need to be informed about all aspects of the market, not just the media narration.

The market conditions are not the only thing you should consider to identify when the right time to buy is.

A great deal can always be found, sometimes you just need to know where to look or who to talk to.

So, listening to family, friends and the media’s advice on when you should buy should all be taken with a grain of salt unless they have been there before and experienced the market.

As Warren Buffett said, now is your time to be greedy!