According to RP Data, there are 30 per cent more properties available for sale across Australia compared to this time last year, which means there is more choice for buyers.
“Right now, in the winter season of 2011, we are experiencing a temporary pause in the market which I believe is healthy. Buyers are cautious again, clearance rates have dropped and prices have gone down slightly,” Mr McGrath writes.
He points to a quote from Warren Buffett, one of the world’s most successful and foremost investors.
“Be fearful when others are greedy. Be greedy when others are fearful.”
Mr McGrath believes they are wise words, and sentiment which applies here in Australia in the current market
“In real estate, I find that herd mentalities are often driven by the boom-or-gloom stories we hear from analysts, commentators, colleagues, neighbours and even well-meaning friends and family members. But if you believe everything you hear, you’ll convince yourself it’s never the right time to buy,” he said.
Mr McGrath suggests buyers take an “umbrella view” and look to purchase for the long term, as a 2.1 per cent decline in prices during the March quarter will not matter in “2021 when property prices may have, once again, doubled.”
“If you wait for the herd, there’s one thing I can guarantee. When the herd starts buying again, prices will go up, and you’ll be kicking yourself you didn’t grab this current window of opportunity,” he said.
Mr McGrath believes that the local property market is not in the beginnings of a downward stretch as “the fundamentals of our property market are still very good, but right now, we have a little uncertainty going on.
“This relates to volatile global economies especially in Europe, uncertainty relating to interest rates, a more conservative approach to debt and recent natural disasters. From a property market perspective, these are circumstances that are temporary and will resolve themselves,” he said.
“Overall, we are still in a market upswing and our fundamentals of a strong population growth, a massive undersupply, increasing rents and a stable economy will keep our property prices strong in the long term.”