Don't panic, Europe's economy shouldn't affect your Melbourne property investment

Don't panic, Europe's economy shouldn't affect your Melbourne property investment
Don't panic, Europe's economy shouldn't affect your Melbourne property investment

So is it OK to buy now? Is this a window of opportunity or the start of the slippery slope?

It’s human nature as buyers to want to get a great deal at any time. We as buyers want to make the best decisions on our needs and maximise our individual long-term emotional and financial outcomes for our family – just as sellers do. But there is wanting and there is making it happen.

Going forward, what will happen is that:

Some buyers will panic.

We are all a bit circumspect and nervous, but if we become panicked we become a danger to our families.

The best way to avoid panic is to be clear on what it is that you, as the breadwinner or decision maker, are trying to achieve.

What do you want for your family?

A home with four bedrooms, a good backyard near schools and with a good floorplan in Boroondara or Bayside? Good – well stick to it.

The condition of the Greek economy shouldn’t make you now think you want a two-bedroom home in Epping with no backyard because that is somehow less risky than Hampton or Glen Iris.

Some buyers will not learn from history.

Think what happened during and post the GFC, during the ‘90s drop, and during the ‘70s – if you are as old as I am.

If you understand what is happening now you may be able to take advantage of it – even in little ways. It all adds up.

Some buyers will act.

You can only take advantage of an opportunity if you act.

Those who appear to be the wisest of men who pass on everything in life are not that.

You can’t look after your family on inaction. Your spouse can’t sleep in your concern and your kids can’t play in your risk-avoidance strategies.

Good things to think about when you realise you still need to do something:

Take your time, as most sensible buyers have this year. If you see something you like, look at its characteristics: are they what you want and are they any good? If not, move on – prices seem unlikely to be going north in a hurry.

Elevate your risk taking in negotiations and go harder on price. Especially if it’s been passed in for longer than a few days. Providing you don’t have to have it at any cost, push a little harder. It’s not immoral to try for a good deal.

Aim higher – especially if you are above $2 million. If you can stomach a bit more debt, then now may be the perfect time to look for something a bit better than what you could have afforded last year.

Marry a doctor or someone with equally good cash flow, because over the next few months some bargains may appear and cash-flow kings will be able to take advantage of the debt bunnies.

We admit we have a complete bias towards property, so maybe our thoughts are not quite balanced. But maybe that’s why we feel some comfort right now. If the kitchen in stocks is a bit too hot maybe nervous investors could come over and try the relatively stable inner-Melbourne housing market. Sure, it’s a bit rough around the edges, but it is solid inside.

The rest of this year is an opportunity for us all – and for some that opportunity will be a time for action, for others a time for reflection and for a few a time for panic.

Mal James is principal of James Buyer Advocates, which advocates on behalf of buyers of property over $1 million. Mal writes weekly auction reports, advice and in-depth market analysis on James' website.

Mal James

Mal James

Mal James is principal of James Buyer Advocates, which advocates on behalf of buyers of property over $1 million.

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