Latest CoreLogic property report showed positive price growth up till the month of April across most Australia capitals, east cost cities the strongest performers.

History tells us, once period of economic uncertainty passes, property market become competitive again, and financially well positioned buyers benefit the most.

There is a strong possibility, buyers will rush to secure property once restrictions are lifted and competition between purchases will again lead to unrealistic price increases, especially in east coast capitals.

Here are some of the more common traps that trip property buyers;

1. Emotional purchasing

Undoubtedly, emotions play a huge part in the property markets’ expense growth. Generally speaking, people who are purchasing a home for their family’s personal use are likely pay more for the property than an investor.

The simple reason is because their purchase is driven out of emotion. Becoming worried that they will miss out on the ‘perfect’ property, will cause some buyers to ignore rationality – and their budgets! This results in over capitalizing on a property because of fear driven decisions.

Alternatively, an emotional purchaser often buys a property in an inferior location out of fear that the properties in their preferred location are out of their reach.

With the emotions and fear driven decisions in play, they are left with the notion that any property is a good property, so long as they are in the market.

The market however, doesn’t work like this, and that second-choice property will always be a second-choice property. Buying a property also means taking on a major debt, book a free consultation with loansHub and get expert financial advice.  

2. Delaying a purchase in the hopes the market will swing

There will always be those who decide to wait for the market to swing in their favour. The issue that arises with this approach, is that, sought after residential properties in the city are unlikely to be a part of those dips in the market.

Instead, the probability is they will continue to rise in cost because the demand is continually increasing. This in turn, leaves those who have held out for a swing in the market, further behind than when they began.

3. Purchasing out of stress

Purchasing a property in the competitive market, can cause even the most seasoned buyer to sweat under pressure.

Without expert advice from a knowledgeable professional, many people make impulsive decisions, in which they over capitalize and go against their own financial best interests.

4. Not doing your own research

Remember, real estate agents have a legal obligation to obtain the best price for the vendor. There are not there to save you money, understanding everyone’s role in real estate is important in securing your own best interests.

In such a competitive market, there are a few key points to think about when purchasing a property

Don’t be discouraged if you don’t secure one particular property. Stay optimistic and keep searching for an alternative.

Do research on the market in the area you are purchasing in, and be prepared to purchase quickly. This means having your finances in order before making an offer.

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This article via Your Investment Property does not constitute financial advice; readers should seek independent and personalised counsel from a financial adviser that specialises in property or a tax accountant.