Justin Smith

Mortgage Broker

0408 912 244Contact Us Now

Should You be Offering More than the Asking Price for a Home?

Should You be Offering More than the Asking Price for a Home?

Across Australia, housing prices have been rising. In Perth, the current median price of $535,000 is a record high. In addition, research conducted by realestate.com.au shows that 41% of Australian buyers in September and October of 2013 were prepared to offer more than the asking price, nearly double the 23% of those who were willing to offer more in 2012.

The research also showed that the number of houses going for between $500,000 and $1,500,000 has grown by almost a third from 30% in 2012 to 39% in 2013, making it the most popular market segment of the Australian housing market. Not surprisingly, the under $400,000 home has become a casualty of the rising market, as it decreased from 49% in 2012 to 38% in 2013.

According to Arthur Charlaftis, general manager of sales and operations for realestate.com.au, investors are making a return to the property market. In addition, his research shows that 49% of buyers believe that property prices will continue to rise due to a limited number of properties and record low interest rates. The auction market, which is usually a good indicator of where prices are going, saw 52% of properties selling for more than the reserve price.

In WA, 47% of buyers are currently looking for property in the $500,000 to $1,500,000 range. We don’t have the exact statistics but we can say that our mortgage brokers are seeing home loans in the Rockingham, Baldivis and Kwinana areas indicating that there are still affordable properties here.

What This Means to You

Every situation is different. We can’t make a blanket statement saying that if you really want a house, you should offer more but we can say that you should at least be prepared for the possibility that you may have to offer more for a home if you really want it.

In a market like this, we do have to caution against buying a home based on emotions instead of solid research. There are plenty of reasonably-priced properties in the Rockingham, Kwinana and Baldivis areas that can be had without entering a bidding war.

For a home loan, call 0408 912 244.