- House prices in Sydney, Melbourne and Brisbane began to rise just before the pandemic
- Procrastinating because you need social validation before buying might result in lost opportunities
Something quite interesting started to happen way back in mid-2019, but most homebuyers and investors missed it.
That’s because, some three-plus years ago, asking prices for properties in our three biggest capital cities started to increase quietly.
Of course, this was before the pandemic darkened our doors, and generally, most people thought that markets – especially in Sydney and Melbourne – were in a trough.
By that stage, the peak of the growth cycle in both of those cities had been over for a few years, but there were signs of strengthening market conditions for a few different reasons.
One thing that happened in 2019, though, was that the Reserve Bank of Australia cut the cash rate three times within a year – with the cash rate reduced by 75 basis points to just 0.75 per cent by year’s end.
This further reduction in interest rates no doubt motivated more people to enter the market as we started to see prices begin to climb.
However, a few months later, the pandemic came calling and everyone was shut off in their homes for months on end as it turned out and markets flat-lined for some time such was the fear and uncertainty.
Opportunity awaits
The smartest operators had already made their moves by then, but some clever people also saw the opportunity that 2020 presented and used the lull to secure the very opportunities out there.
Depending on the location, some markets started to boom before the end of that year, whilst others kicked off in a big way in 2021 with spectacular price growth generally recorded across the nation.
Now, I’ve said it before and I’ll say it again, some of the prices that people were paying at that time were crazy because FOMO clearly had got hold of them in a big way.
That said, we were still able to secure excellent properties for our clients around the nation that have held their price points, and continued to grow during this current softer period, because they were strategically selected and professionally negotiated.
Procrastinating because you need social validation before buying will mean that you will miss most of the growth on offer.
Once again (sigh) we are seeing media story after media story predicting significant price falls – remember the same headlines in 2020, anyone? – but the best analysts are indicating a fairly soft landing in most locations.
Alas, though, there are plenty of prospective homebuyers and investors out there who are sitting on the fence at present, because they seemingly think they will be able to pick the bottom of the market (they won’t).
They have adopted a wait-and-see strategy approach because they are getting their property investment advice from a mainstream media outlet, which may have meant they didn’t transact in 2019 and 2020 either, when they really should have.
The problem with waiting for the herd to move is that it’s just not a strategy at all.
Rather, procrastinating because you may need some social validation before buying will likely mean that you will miss most of the growth on offer.
I know that it’s difficult to be brave and forge ahead anyway, when everyone with a big enough voice out there (and the need for media attention) is telling you that the world as we know it is crumbling, but you must.
When everyone moves en masse, which is common let’s admit, then prices can start to rise rapidly and everyone who waited for the herd will be competing against each other for the best properties – which is really quite self-defeating, isn’t it?
