According to Lloyd Edge, the founder and managing director of Aus Property Professionals buyer’s agency, the housing market’s shift into a buyer’s market comes following years of operating as a seller’s market. 

“[We] saw many years of the increasing property prices and properties flying off the market for eye-watering prices during the recent seller’s market,” he recalled. 

But he pointed out that sellers are now taking the back seat, and the market’s pendulum is swinging back in favour of buyers. 

He noted that the market has now moved into a phase characterised by property purchasers having the upper hand over sellers during price negotiations. 

“During a buyer’s market, you will see real estate become more affordable because market supply is increasing and properties are taking longer to sell in the market, which means there are more choices for buyers.

“This results in sellers needing to reconsider their price expectations on their properties, and buyers are able to shop around more for the right property,” he explained. 

But what brought on this market transition? 

According to Mr Edge, it all boils down to fundamentals, particularly demand and supply. “Any changes to the property market that happens to increase property supply, decrease demand for properties, or both, will cause a buyer’s market to occur,” he stated. 

The expert said that the rising interest rate environment, along with high inflation, has caused some buyers to retreat from the market completely, while some sellers are unable to afford their mortgage and are forced to divest their properties — two trends that are seen to bolster supply in the market. 

“When interest rates are increasing, buyers will be able to borrow less. Alongside rising inflation where buyers can afford less. 

“The result is buyer’s budgets are lower, and sellers then need to start to offer discounts on their properties, and this is why buyers are seeing they are now able to get ‘more bang for their buck’ than in recent years,” Mr Edge stated.

Aside from buyers being spoiled with options, the expert said that the increasing number of sellers who are urgent to sell also creates advantages for aspiring property owners. 

“With a higher supply of properties on the market, the flow-on effect is that properties start to take longer to sell and are staying on the market for longer, and vendors start to become increasingly nervous and urgent about the sale of their properties,” he stated. 

With sellers determined to “get deals done”, Mr Edge said that sellers reduce their expectations and are more inclined to negotiate on prices — giving the buyers the higher ground during negotiations. 

As the urgency from the fear of missing out, or FOMO sentiment, is zapped by the market being ripe with options due to longer selling periods, the expert added that buyers could avoid making rushed decisions. 

“For property investors, you are able to grab a bargain in these market conditions that will prove to be a good purchase over the long term, particularly if you can negotiate smart with motivated sellers,” he added. 

Tips and strategies for buying in a buyer’s market

With the market operating in favour of buyers, Mr Edge said that it is now a “great time to buy a property”. 

On that note, the expert enumerated strategies that could help you secure the best deal in today’s market: 

1. Constantly re-assess the market conditions. The expert underlined the importance of understanding the comparable sales in the area and making sure that they are reliable and relevant.  

“If you rely on sales prices from last year or even last quarter, you may risk paying too much as the market conditions are very different and constantly changing,” he said. 

2. Know your seller. It takes two tango, and a real estate transaction is no different. By understanding the seller’s motivations, Mr Edge noted that buyers could have the advantage when it’s time to negotiate. 

3. Be flexible. While buyers have the upper hand in a buyer’s market, Mr Edge said that flexibility is still a must. “Be flexible with the terms in the contract to nab a good purchase price,” he advised. 

4. Know your competition. Mr Edge recommended asking the selling agent about whether there are any other interested parties in the property. 

“Knowing about how much competition there is for a property will assist you in negotiations. You can also attend open homes to see if there is much interest in the property to aid in your negotiation strategy,” he stated. 

5. Be strategic at auctions. If the property is going to auction, the expert recommended inquiring about the number of registered bidders and to hold back before bidding to see if anyone steps forward. 

“But remember, if a property is passed in at auction or doesn’t meet the reserve price, then the highest bidder will be called for private negotiation first,” Mr Edge advised. 

6. Work with a buyer’s agent. There are several ways that working with a buyer’s agent can help you take advantage of a buyer’s market, according to Mr Edge.  

“An experienced buyer’s agent can educate you on the current market conditions and provide you with reliable, comparable sales in the relevant markets so that you are able to determine the right price for a property. They will assist you from overpaying for a property,” he explained. 

Due to their contacts in the market, he explained that buyer’s agents are also often offered mortgagee sales, or stressed sales where a seller can no longer afford the mortgage on a property and needs to sell the property urgently. This can give you, the buyer, access to sellers who will often accept a lower price in order for a quick sale.