Right now, there are two incredibly intense yet very different emotions for property owners and buyers.
The first emotion is excitement. Many of Australia’s 10.7 million property owners have enjoyed between 20 and 40 percent growth in house values over the last 2-calendar years.
And there is plenty of petrol left in the tank [here’s why].
But anyone trying to transact in this crazy property market is experiencing a completely different emotion: frustration, and lots of it.
Whether buying as an owner-occupier or a property investor, this once in a generation super-boom is no time for dithering, game playing or being stubborn.
There are significantly more buyers than properties for sale.
When in the heat of the battle of a real estate negotiation, any buyer who delays or unnecessarily complicates a transaction will be overlooked by other buyers.
Missing out on one property that ticks the right boxes can take a few months to find that next needle in the haystack.
In this market, game-playing and stubbornness will cost a buyer circa $25,000.
Contrary to recent media headlines which suggest property markets are ‘cooling’, many locations across Australia are still running at a pace of 20 percent annual growth or more.
Propertyology’s buyer’s agents are seeing it unfold right before our own eyes every day.
These markets have more energy than a kennel full of kelpies.
For perspective, if a stereotypical $650,000 detached house on one of Propertyology’s acceptable streets experiences 20 percent annual growth, it will be worth $780,000 in 12-months’ time (or growth of $11,000 per month).
Related article: An oyster of opportunities across Australian property markets
Skilled buyer’s agents are good at ‘reading the room’.
And they understand that different market conditions (along with the personal circumstances of each vendor) call for very different negotiation tactics.
For example, when the market is hot and a building inspection uncovers a handful of general maintenance items that collectively cost (say) $5,000, the intelligent decision is understanding that a better net result is probably achieved from accepting the property ‘as is’ than being stubborn, crashing the contract and going back to a bone-dry well.
“Tight” is not a strong enough word to describe the current pressure in property markets across many parts of Australia.
At the end of February 2022, this nation of 25.7 million people and 10.7 million dwellings only had 215,000 residential properties listed for sale.
The previous record low of 235,000 dwellings was 12-years ago when 4 million fewer people lived in Australia.
The current high volume of buyers have confidence and enthusiasm through a combination of high household equity, sizeable cash reserves and job security from an economy that has reached full employment for the first time in eons.
When a fresh listing hits the market there invariably is a swag of salivating buyers ready to pounce. Properties regularly sell within a fortnight after receiving multiple offers.
As always, the degree of property market pressure varies from location to location.
Of the ten (10) different cities in four (4) different states that Propertyology is currently investing in, it is taking our buyer’s agents between 3 and 6 months to find and negotiate the purchase of a suitable property.
The below graphic illustrates the pressure cooker environment that our buyer’s agency is navigating on client’s behalf.
We had hoped to see some increase in resale supply throughout 2021, but it did not eventuate.
And a delayed return to school plus floods along most of the east coast has contributed to vendors being slow out of the blocks so far in 2022.
It is what it is. One can’t make properties appear out of thin air.
Regardless, those who prioritise their financial future ought to have urgency about getting into this exciting property market and prospering from this once in a generation rate of capital growth.
In saying that, it is also critically important to not allow those two contrasting emotions (excitement and frustration) to influence a compromised purchasing decision.
When the tide eventually goes out, those who fall victim of FOMO will be the ones marooned in a rubber dinghy.
As professional buyers of strategically-chosen real estate, the current record low volume of housing supply for sale does not alter Propertyology’s focus.
We have the same (very structured) process for identifying the right asset type on very specific streets. But it takes longer than we all want to find that right property.
When we find it, we pounce.
When negotiating the purchase, stubbornness is not an appropriate tool of trade.
If we miss out, it was not meant to be.
As for those whose patience may be running thin and wanting to know about a ‘Plan B’… the answer is to persevere with ‘Plan A’.
Propertyology are national buyer’s agents and Australia’s premier property market analyst. Every capital city and every non-capital city, Propertyology analyse fundamentals in every market, every day. We use this valuable research to help everyday Aussies to invest in strategically-chosen locations (literally) all over Australia. Like to know more? Contact us here.
Here’s how we combine our thought-leading research with Propertyology’s award-winning buyer’s agency services.