What 2020 has taught us is to have some perspective in our lives and realise succinctly what really matters! Is it wealth, a fancy car, having nice clothes, or is it health, family and a comfortable home to appreciate those that you love the most?
I think the latter is what is important to most of us after the unbelievable and unforgettable 2020. It’s been really interesting on a personal level, but also in helping and guiding clients through their property search and purchase, by ensuring that they had a “big picture” outlook. This certainly guided them in securing the best property for the future for them and their families.
In August of 2020 my article “Window of Opportunity” described how the “lockdown” was going to create more competition for larger family homes, as we all came to the realisation that location is certainly important, but a large flexible floorplan or room to improve and extend in the future was a very important commodity. My article described that the pause in the market was going to build up buyer demand and once we were all “un-locked”, the market could increase by 5-10% by the end of Spring market.
In review, the figures showed that, contrary to the “bank and TV experts” decline of the market of up to 40%, the contrary was to be the case. The Melbourne market increased by 8.4% for the year and as I predicted in August, the market rose by 9.5% in the last quarter to Dec 2020. I guess being on the ground vs, sitting at a computer screen make predictions counts for something.
So, the question is how did I see the writing on the wall? Well it’s easy really, I looked at my own situation and my families and the needs of my clients. People were stuck at home, working from home, most with little or no backyard to breath in some fresh air, and if you went out you had to wear a mask. Some couldn’t go to exercise properly at the gym, yours truly included. People were Zooming or Google meeting from their dining table, while at the same time playing teacher with their kids – and really appreciating our children’s teachers.
Effectively, we all realised that we needed more room – an extra bedroom, a study, two living areas maybe, or a bigger backyard – a 2-3 bedroom single front in Brunswick just wasn’t going to work anymore for a family of four. Regardless of the fact that you could walk down to the café or jump on the now-needless tram, the fact is that people compromised on the size of their home for the convenience of walking to amenities.
Is location, location, location no longer the most important attribute to real estate? Well not quite, but moving forward maybe “location, location” is sufficient, with accommodation and flexible value-add opportunity making a lot more sense in 2021 and beyond than before. Sure, you might have to walk longer or ride/drive to your local, but space is now more important than it was.
Some clients might have the option to renovate, but if renovating is only a “band-aid” fix, then upgrading makes sense again. I advise most of my clients that location is important, but value-add opportunity is equally as important.
This all brings us to the current market and how 2021 will unfold. Quite simply, as Melbourne’s young couples and families realise all of the above, they are in search of bigger and more life-appropriate homes that will cater for their family needs but also their new-found norm -a work from home situation.
They are in search mode and partnered with low interest rates and the realisation that their job is secure, they are out and about looking for quality homes. The slight problem is that there is a lack of these available and when they come onto the market, competition is fierce!
I am seeing a lot of properties available off-market or pre-market and even though we have early access to these, at times we still have to compete. However, we are trying to compete against one or two vs. “letting” the property go to market and compete against six-ten buyers that might have missed out on three-four properties last year and are now in fear of missing out (FOMO) mode and will just bid, bid, bid.