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Sep 7th, 2013 

Investors shove out first-home buyers

Posted By Darren Hill in Blog

AS low interest rates prompt a fresh surge in real estate activity, a Battle Royale is looming between first-home buyers and property investors.

Sadly for the first-home buyer crowd, it’s a one-sided contest. Low interest rates help both parties with their repayments, but investors typically have more financial firepower when it comes to a bidding war.

Data released this week by mortgage broker AFG shows that investors snapped up between 28 per cent and 50 per cent of all mortgages processed in August, depending on which state you live.

And the RP Data-Rismark Home Value Index reported the strongest quarterly gain in house prices in four years.

It’s good news for sellers, but not so great for buyers who have been scraping a deposit together and now must fight cashed-up investors for properties, plus a growing number of wealthy foreign buyers.

So in the interests of helping the underdogs, here are some ways that first-home buyers can compete in the real estate market.

Firstly, get pre-approval for a loan. If a seller has a choice between a pre-approved offer or one that is subject to finance, it’s no contest.

It’s also important to think about supply and demand. If there is high demand for an area or property, you’re going to have to pay more and battle others for it. In many cases taking that first step on the property ladder makes more sense in an area where there is abundant supply and lower demand. You can always trade up later once you have built some equity in your property.

Remember that most property investors think with their heads rather than their hearts and will seek simplicity in their purchase. That means first-home buyers may have a better chance at grabbing a bargain if they target properties that need a little renovation work to get them into good shape.

Search for opportunities before they get listed by building a network of real estate agent contacts. Property experts suggest always making the first offer and asking the agent for the opportunity to make a counter offer.

Finally, take emotion out of your buying decisions, just like good investors do. New properties will always be popping up.

Read more: http://www.news.com.au/realestate/experts/investors-shove-out-firsthome-buyers/story-fneofxxf-1226713170395#ixzz2eFLP8Kqj

Darren Hill
Director/OIEC Wantirna Office
9800 0700
Email
Darren has lived in the local area for over 20 years. Darren Hill the director and founder of Hill Real Estate himself entered into real estate in 1990. The passion for meeting people and helping people is still Darren’s driving force. After starting his career in franchise companies as an awarded salesperson his vision to be a truly independent agent was shortly realised. His continual drive to improve with a prominent central position are the ingredients to achieve the most respected agent in the City Of Knox/Foothills. Darren believes a career in real estate is rewarding for the people you meet who welcome you into their lives and the sobering experiences and maturity gained from those relationships. Darren is a Past President and current active member of Rotary Club of Knox and received a Paul Harris Fellow in recognition of service. Darren’s passions are his family and motor racing. To experience the Hill Real Estate difference please contact Darren on 9800 0700.
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