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Panic Buying Trap for Home Hunters

20 April 2013

Real estate industry experts are cautioning homebuyers against paying "tomorrow's prices" in fear of missing out or being priced out of Perth's rebounding property market.

Janey Anderson, of Propell National Valuers, said "panic buying" in the lower end of the market was creating a seller's paradise.

She said many properties were selling immediately after they were listed or at their first open day, with buyers paying well above the asking price to secure a home.

"In a rising market, especially one that is moving as fast as the current market is, the buyer can begin to fear that if they don't secure the property they are inspecting, it could be months before they find another one," Ms Anderson said.

"This is causing people to pay what they think is tomorrow's price today. This can perpetuate the rising market."

Property consultant Gavin Hegney warned buyers against entering into bidding wars. "Locations where many properties are selling quickly are good, but when they are constantly selling above asking prices, it may be time to step back," he said.

Real Estate Institute of WA president David Airey said auctions were better for properties in areas of strong demand and crowded home opens. "If you are getting multiple offers on a property, these properties would be better to be offered for sale at auction where everyone gets a fair playing field, rather than having people scramble and make over the top offers without any justification of what might be the value of the property," Mr Airey said.

Early REIWA data for the March quarter showed weekly sales were 14 per cent above last year's average and about 47 per cent higher than in 2011. Current listings (8430) are 73 per cent above a 4800 low in June 2006.

Joondalup south is Perth's tightest supply market, with the lowest average selling days of 36.

Realmark managing director John Percudani said with Perth's median house price at $510,000 the outlook was not rosy for those who missed the chance to invest during the downturn.

Acton managing director Graeme Baxter warned a higher median price did not necessarily mean house prices were rising out of reach.

"In general, we are not in a 'panic' market yet, and we will stay that way if buyers remain calm and consider their options carefully," he said. << back to news articles