Many buyers will miss out on their dream property this year because they are moving too slowly in a hot property market.
Buyer’s agent Rich Harvey, CEO of Propertybuyer.com.au, says buyers need to move with a “relative level of efficiency” to get a deal done this year.
He says potential buyers should have their finances worked out, their legal team organised and be ready to make a speedy decision when they hit the market.
Harvey, guest presenter on the recent “Catching The Next Wave Of Property Growth” webinar hosted by Hotspotting, says prices are rising quickly and buyers are making big offers to try to secure target properties, because stock is low.
“I am seeing a lot of aggressive buying behaviour and it’s not necessarily sensible,” Harvey says. “I put in an offer the other day on a property and I thought it was a really good offer. And then another buyer came in $220,000 over the top of me and my client.
“That’s ridiculous – that buyer has just blown a stack of money that they didn’t need to. The vendor would have been happy to get another $5,000 or $10,000, but instead they got an extra $220,000. So, there’s some crazy buyer behaviour happening, driven by FOMO in some cases.”
Harvey says that doesn’t mean it isn’t a good time to buy – it just means buyers need to do their research, get organised and be prepared.
He says those nervous about competing in such a hot market should consider engaging a buyer’s agent who can handle all the steps and often have access to off-market properties.
“A lot of people are second guessing; we do dig a lot deeper for our clients in that regard,” Harvey says.
“It’s a really hot market and it’s become hot quite quickly. Obviously coming out of the depths of COVID, you can see the dramatic bounce back. We’ve seen a quick rebound in most areas across Australia.”
Harvey says further evidence of the current heat in the market is auction clearance rates which are above 80% in most capital cities and even exceeding 70% in auction-shy Brisbane in recent weeks.
He says economists are predicting further price increases so buyers and investors who want to purchase this year need to prepare themselves and not sit on their hands.
“Everyone’s talking about lack of stock, a lack of listings. We’re following a similar trajectory to 2020, which is still way below the long-term five-year average,” Harvey says.
Some pockets Sydney such as the Northern Beaches and Eastern suburbs were down 40% on listings on average and it is the shortage of listings , coupled with rising demand, which has a dramatic impact on prices.
Harvey predicts expats returning to Australia will become an even bigger force in the property market this year.
He says some are deciding to remain in Australian even after the vaccine has rolled out because of the lifestyle so they will put further pressure on property markets.
Property demand is also coming from those who have been stuck at home during COVID lockdowns and decided their home no longer suits them and they want to upgrade or downsize.
State and Federal governments are also pumping money into infrastructure spending which Harvey says leads to economic recovery which helps to pump up property markets.
“We’ve seen sales activity rising up to this point, because of all of these factors,” Harvey says.
While investors were absent in large numbers in 2020, they are now starting to return as a result of an emerging rental boom.
“We have a rental shortage crisis at the moment that is showing up in the rental figures and the fact that so many people are struggling to find somewhere to live as tenants,” Harvey says.
“I think investors shouldn’t hold back. They shouldn’t keep their powder dry. It’s a time to actually examine where the opportunities are in the market and start to move forward and literally catch that wave.”
He says the boom has “long legs” backed by more than $200 billion of government financial stimulus which has found its way into householder’s and business owner’s pockets.
“Obviously, we’ve had some pretty negative times with the lockdowns, and the health impacts of COVID, but we’ve bounced back. I think this boom is going to last. People in Australia, love bricks and mortar.”