Friends, family, new clients, and current clients ask me this question on a daily basis. Well, the answer is simple, there is no sign that the market is slowing down. If anything, post-lockdown 6.0 it might go up even further.
There are a number of variables that can impact the strength of the market. Interest rates, unemployment, job creation, property supply, buyer demand, population growth, investor appetite, the economy and many more.
Supply and demand are the two main factors in the current market, especially considering the others are “steady” (population growth excluded). Lockdowns 4.0, 5.0 and 6.0 have skewed the flow of stock to the market. Vendors have had their selling campaigns interrupted by the constant changing of rules on inspections and auctions.
Agents and vendors have been used to the normal steps for so many decades, even before I started 20 years ago. You want to launch your property to market, it’s all pretty simple. You select an agent, choose a method of sale (usually auction), market your property, take photos and within one-two weeks, you’re online and ready to go. Host seven-nine half hour open for inspections over four weeks and voila, it’s auction day and you let the buyers compete for your biggest asset. Done.
Well, how times have changed! I must commend sales agents and how quickly they have adapted to the “new normal”. Inspections have been done one on one, at opens people must wear a mask, only 10 people in the house at any one time, Zoom auctions, and virtual inspections.
Who would’ve believed me if I told them that people are buying a home sight-unseen? From a virtual inspection and a building inspection, that’s it. I spoke to an agent only last week and he had a Zoom auction for a single front in Brunswick where four buyers participated. None had walked through the property, which sold over $100,000 above reserve. WOW!
So, you ask, are people crazy? Well, there is some reasoning to their perceived “madness”. They have missed out on so many and inspected enough properties to know what to expect. Their perception of value is based on the properties they have missed, and all they are doing is trying to get into the market and not keep chasing it upwards.
I get it – there is a sense of need to move, upgrade, buy before banks reassess their lending parameters. Maybe the pandemic baby boom is forcing you to have more room for your family, maybe you’ve sold and need to transact in the same market or is it simply ‘FOMO’? I think the latter fear of missing out is the big reason.
The inner North and inner West market that we specialise in has quite simply exploded. Suburbs like Northcote, Thornbury, Brunswick, Coburg and Essendon have been in high demand, increasing in value to record figures