Article by guest HTM contributor, Michelle May, Principal of Michelle May Buyers Agents.

How often fact check the information people tell you, before treating it like the truth? Many misconceptions and false ideas fly around the world of finance and property, so it’s crucial to do your own research, ask lots of questions and think critically about the things you hear.

In this article, buyers agent, Michelle May, dives into some of these misconceptions and suggests actionable ways to be a more informed consumer.

My friend thinks house prices will drop later this year, but I want to buy now. What should I do?

It doesn’t matter if it’s your friend, partner, hairdresser, boss, or second cousin offering up the amateur property advice I would say one thing…smile politely but don’t listen!

Buyers bring me these concerns at least twice a week, and it happens every single year, no matter what the market is doing. Of course, everyone has an opinion on property prices. Along with the traffic, sport and weather, it’s one of our hot topics.

However, these well-intentioned people are doing more harm than good to your property search. Here’s why: 

It’s a long-term game

Too many people focus on timing the market when they should concentrate on finding the right property. You’re going to be in the property for at least five years, so it should be all about what you can afford and where you want to live, not looking for a bargain. 

If you’re thinking about moving on in less than five years, I’d think long and hard about buying at all. With the taxes and sales agents’ costs so high, any capital growth would be usurped by the outlay.

Action: Calculate all of your costs before buying, so that you know the price of entry and exit. 

Sydney is not just one market

There are many different micro-markets within Sydney, and they don’t all operate in the same way. For example, parts of the Eastern Suburbs weren’t affected by COVID-19, while areas around them lost value. The $2m market may not be the same as the $4m market – even in the same street, and apartments are a law unto themselves. 

I’m in the market 24/7, and I can tell you that most of what gets reported is out of date when it hits the papers and starts forming popular opinion. 

Action: Unless you know what the micro-market is doing for the property you’re looking at, I wouldn’t listen to anyone else. Ask someone who knows that market, such as a local buyer’s agent.

People have their own agenda

We all need a bit of peer approval when we’re making a big decision, but you should ask yourself where the advice they give is coming from.

Somebody might say, “I’d wait if I were you because the market is going to drop by 30%”. That could be because they need that to happen to enter the market themselves, or it’s just a story they’ve read.

Tales about the market crashing sell newspapers and are the ultimate clickbait. You’re reading this sensational story with thousands of others, which is where opinions get formed and one of the main reasons why someone close to you will end up warning you against buying now. 

Action: Don’t believe the hype. Please do your research, get expert advice and form your own opinion on the state of your micro-market and whether it’s a good time to buy. 

Beware of the bargains

When there is a significant price drop of a particular property, it may not be because of what the market is doing, but the owner is taking the opportunity to offload it. Perhaps there are major works planned or zoning issues that will adversely affect that property’s potential for capital growth. 

I often turn away clients with unrealistic expectations of what they can buy. Sure, I could help buy them a ‘bargain’ house on the Parramatta Road in Stanmore for $1.25m, but I wouldn’t feel right about it because that’s not good advice. Ultimately, I’m here to help people make better decisions and cut through all the property noise. 

Action: Be very suspicious of any property that significantly drops its price, even when the headlines scream about a crash in property prices. Research, research, and research some more. 

Learn more about Michelle May

Meet Michelle May, 24 years of experience and Sydney’s most highly sought-after buyers agent in the Inner West and Eastern Suburbs of Sydney. Why? Ask any client of Michelle May and they will describe her with these words; determined, realistic, passionate, detail orientated, and has knowledge of the property industry that only comes with years of experience. Starting off in her early twenties as a property flipper, Michelle knows a thing or two about renovating properties and what makes a good home or investment.