'Sell first, buy later' no longer works

·2-min read

A leading buyer's advocate says the COVID-recovery residential property market is moving so quickly the conventional wisdom of "sell first, buy later" no longer holds.

"The competition is extreme - it's one of the most aggressive sellers' markets I've ever worked through," the president of the Real Estate Buyers Agents Association of Australia, Cate Bakos, told AAP.

Ms Bakos said the rapid price growth is affecting all Australian capital cities and major regional centres.

She said "sell first, buy later" is really based on a buyer's market and doesn't work in the prevailing climate.

"Unless your home is super high risk, you would buy first and sell second," she said.

"That way you are buying in today's money and selling in tomorrow's money."

She recommends asking vendors for a long settlement of 120 days and re-negotiating an earlier settlement if buyers can offload their current property sooner.

But a word of warning.

Ms Balos also cautions would-be buyers whose current properties might be "compromised" - on a busy road or with a poor layout, for example - not to take this gamble.

"Don't put your deposit at risk," she says.

She says buying first might also be a risk for people who would not be eligible for bridging finance, in case they end up holding on to two properties at once.

Jellis Craig Stonnington Managing Director Andy McCann told AAP there's always an argument for buying first if you're after a particular property.

But he says it's good to know how much money you might have to re-invest, and in a fast-moving market, that could mean buying something that's better than expected.

Mr McCann says he's seen markets fluctuate over 22 years in the industry but says the combination of high demand and low interest rates at the moment is a "perfect storm".

"The ferocity of some people to acquire property at the moment is something I haven't seen before," he says.

He says Melbourne's lockdowns have increased people's desire to jump into the market, especially if they need more room or a home office.

"Or perhaps they are deciding the home environment is more important than the cafe environment," he said.