What Type of Buyer Are You in Hampton Park?

 Home buyers in Melbourne are categorized into three groups depending on the sales volume: 

• First Home Buyers: Those who are going to buy a home for the first time. 

• Relocator (upgrader or downgrader): Those who want to move to a bigger home or a smaller home.  

• Investor: Those who want to earn returns through a home. 

First-Home Buyers (FHB) 

These are the people who look for a home; an entry-level. These can be anyone; a young couple looking forward to settling and having a family. Or youngsters leaving their parent’s home. However, first home buyers in Melbourne are not just limited to the above-described people, there can be people who never owned a home in life but would want to buy in the later stage of life. Irrespective of the category you fall into as a first-home buyer, the process of buying a home stays the same. Generally, the first-home buyers buy at sub-median prices. Such buyers are said to have minimal assets and limited capital. These buyers are highly sensitive to interest rate movements. They are also scared of missing out on the ‘Great Australian Dream’.  

The first-home buyers might make a decision based on emotions and panic with the rise in prices. First Home Buyers push prices up from the bottom of the market. The price growth cycle typically starts with FHBs as the government provides incentives to invigorate a market.  

Relocators, Home Buyers Melbourne 

These are the people who would like to move from one home to another. These people are also categorized into two groups: 

• Upgrader  

• Downgrader 

Upgraders 

These are the buyers who want to move to a home with a larger space. The reason can be any like; expanding a family, parents moving in with the children, wanting more space in the house or anything else.  

Downgraders 

These are the people who look for homes with less space, i.e., a small home. The reasons can be innumerable like wanting less space, children moving to another city, age factors, or even large home maintenance issues.   

Relocators Look for a Specific Property Type 

As already described above, the relocators would either look for something bigger, smaller, closer or better in a suburb. Relocators are often seen buying based on their emotions and they pay more for a house that meets their needs.  

Relocators own property at the top end of the market, so when they are active, they draw the prices up as they buy above the median price point. 

Investors  

These people buy property for investment purposes. The investors buy it to make more money. They would not compete on the price and in theory, it is said that they should never buy at auction. The investors usually would want to get in before the prices rise and their target price will be sub-median (as with first-home buyers).  

Investors like to buy a home at low-interest rates. But they are not as twitchy as First Home Buyers because rents often rise at the same time to offset the impact.  

Investors do not push real estate prices up, but they absorb the excess stock. This increases the urgency of first home buyers to get into the market before they miss out on something. 

Every group of home buyers has different motivations to make such big purchases in their life. It is important for every buyer to know what drives them to make such an important decision.    

Sydney and Melbourne both have about twice the sales of Brisbane and Perth. When investors move from a larger market to a smaller one, the demand pressure can invigorate the smaller real estate market as investors soak up excess stock. Once investors have made enough money from a growth cycle, they would want to take advantage of the increased equity in their properties. If the local market starts to ease and also if it shifts into a slow growth phase, they might not be keen to make an investment. 

So, they start looking at other markets where short-term growth prospects seem more attractive.  

Developer 

When looking at factors that affect the supply and demand in different markets, one thing people fail to consider is developer activity. It is important for you to understand the huge impact that developers have when you are assessing potential markets.  

Two types of developers who interest us are  

• Medium- and high-rise apartment block developers 

• Broadacre land subdividers.  

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Other developers like infill town house and dual occupancy developers (recreational developers), do not influence the market as much as major developers do. 

Steps involved in the development process are in this order feasibility, due diligence, acquisition, design, planning approval, presales, construction, and settlement.  

The process of buying a home in Melbourne remains the same for all types of buyers. Irrespective of the type, you must hire a professional real estate agent. A licensed and dedicated property agent will help you get through the buying process without getting into any headache.   

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• A real estate agent will first understand your needs and real estate market condition.  

• They will tell you the right time to buy a home. 

• The danger of buying a property during a late boom, stagnation and price-correction period.  

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• A real estate agent will give you property analysis, provide you tailored property reports, so you know exactly what you are buying. 

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• Auction bidding – The real estate agent will also research the property. They will also take your place on the big day to get the best results possible. 

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• Negotiation only – Your real estate buyer’s agent will negotiate on your behalf to help secure the deal in your favour. The agents work in the best interest of their clients and they would do anything to make their client satisfied.

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• Full service – In a competitive real estate market, your buyer’s agent will undertake a comprehensive property search and assessment, then they bid or negotiate on your behalf, helping you all the way to settle.   

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If you are looking forward to buying a home anywhere in Hampton Park, Narre Warren or Pakenham, contact Manny Singh, a real estate agent. He serves his expertise in buying and selling properties. Drop a call now!