Neil and Jackie Blum with their children,Alfie and Charlie,and their dog Coco,outside their recently sold home in Mascot.Credit:Brook Mitchell.
For 41-year-old IT worker Neil Blum and his family,the downturn afforded them the opportunity to buy a bigger house on twice the land size for almost the same price,after they sold their previous home for $1.8 million.
“We were very lucky to sell our house at the peak. We managed to buy as the market started to move back down again,” Blum said.
He said his family would not have been able to make the move to a bigger house that would have cost more than $2 million six months ago.
“As much as I wanted to pay $2.5 million or $2.6 million for these types of houses we always wanted,it was too much of a commitment. The risk would have been too great;as much as we wanted it,it was just out of reach and too expensive,” Blum said,adding that they had rate rises in mind too by the time they bought.
“[The market] certainly flipped on its head – buyers are not accepting ridiculous prices any more,and to be honest,they can’t afford it.”
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Their mortgage broker,Loan Market director Alex Lambros,said most buyers were in the same boat as rising rates hampered their borrowing power,leaving them with less to spend at auctions.
“Everyone’s borrowing power is coming down. Every 50 basis point[rise] is costing $50,000 or $60,000 in borrowing power,” Lambros said.
Laing+Simmons chief executive Leanne Pilkington said rate rises were having an impact on the ground.
“There are fewer people and less urgency. The FOMO that was driving the market last year is gone. Now people are scared of overpaying,” Pilkington said.
With Melissa Heagney