I think it is too soon to determine exactly how all of this will affect us all in the long run.
Naturally as we would all expect, the Federal election will dominate the headlines for the next 50 plus days allowing the property market to take a rest from the spotlight, and in saying that, over the past week of the unofficial election campaign, buyer interest has began to cool. I think everyone is in the ‘wait and see’ phase. As mentioned, proposed changes to superannuation, tax and negative gearing are all relatively big ticket items toward the property market.
Regardless of the above, the market continues to deliver good results for vendors. Yes, there is a feeling of nervousness out there, but in reality, right now results are achievable due to the of a lack of stock to meet buyer demand.
The same stance should be applied to negative gearing. Yes it does facilitate a stronger investment market, but, investors are key players in the ongoing strength of residential property. We need them to help sustain the value of property prices within Sydney. Make no mistake, they are the reason the market has been as strong as it has.
And in saying that, low interest rates and another rate drop this week is equally good news for Investors & first home buyers. It has stabled the market in a period that would often make it wobble. No matter the market condition, the discussion of new budgets and talk of an early election would be enough to keep cheque books in back pockets for some time. The low interest rates and yet another drop has added fuel to the fire, keeping the property market rather hot.
In my view considering all the factors that are going against the market at the moment, the sustained value in residential property has been quite impressive. I look forward to a continually successful 2016.
Lets talk about databases. It seems like every appraisal or marketing submission I go to I am asked about my database, so what better forum to discuss databases with my very own client base.
A database is the list of names and emails that have been gathered through open homes, online enquiries, inspections and canvasing. A client base however, is the names, emails, phone numbers as well as a detailed knowledge of the property interests of each contact nurtured by a professional relationship of regular communication.
In Real Estate, when the market is hot and confidence is high agents realistically could just sit back, the phone will ring and people will come through the door. Its not my offices recommend approach, but in the heat of last year, it was definitely possible. It’s in a market such as today, where a degree of nervousness and uncertainty exist that agents need to work harder to engage with clients and have discussions about all Real Estate matters.
If an agents client base has not been nurtured through the strong market it would be very hard, if not impossible, to establish in an uncertain market. Essentially the agent becomes yet another door knocker looking for his next deal.
I am proud that myself, Garry and the team take our time to nurture long term relationships with our clients, no matter the state of the property market. Many of the people that have bought from us or sold with us remain as close clients. We enjoy having coffee with them or just saying hello, even if it is 2 years after the transaction took place.
This is evident in the number of repeat business deals and off market sales that Garry & myself are able to put together. These are the sales predominantly founded on trust and respect of the agent, and yes, while it is a delicate balance to ensure the buyer and vendor achieve the best result possible, a good agent will achieve a great result for both.
The March Market Wrap
The message for the month of March was one that seemed quite simple. I also believe the same message exists for the month of April. That message – Opportunities exist for those who list. In the Inner West at the moment, there is a real demand for residential property. More importantly, compared to this time last year, the stock is simply not available.
As I mentioned last week, too many people seem to be sitting and ‘waiting to see what happens’ rather than list. All that I can think it is a result of is in response to intense ongoing commentary that themarket is on edge and that at any point it is going to collapse. But, as I am sure you are all aware of by now, we have all been reading that for 6 months.
The thing is, while the media commentary has made vendors cautious, it has not impacted demand in any way. Infact, buyers may even be a little more hungry now because they are the ones that think they are getting a great deal. Buyers appear more realistic about the underlying value of Sydney property.They’re not holding their breath for something that may not even occur. Buyers are looking for property that represents good value and are prepared to pay to secure it.
So my message for the month ahead is to follow the advice of Wayne Campbell and Garth Algar ‘If you book them, they will come’.
Emotions In The Market
Timing for the word emotional only seems fitting as we draw a close to Valentine’s Week. The real estate industry is often an environment dominated by emotions, its an acknowledgement that there is more behind a decision to buy or sell other than just dollars and cents. Homes evoke memories, passion and romance all in one and they are often hard to walk away from; similarly hard to remain level headed about especially if one becomes emotional about a potential purchase.
Unfortunately the Sydney property market is not as enthusiastic as the local florist, and, the overriding emotion on the market is quite negative. After such a long period of positive growth, many now feel the good days are over which has evoked fear that people have missed out or bought too soon etc etc.
Contradictory as it may sound, we are seeing a degree of positivity to the negativity in the market that should not be misread. A significant number buyers & vendors see great potential to enter the market whilst others are scared.. Yes, percentages are down due to lack of stock on the market, but results achieved, especially in our area have been second to none.
Importantly, a buyer that searches for opportunity doesnt necessarily mean a bad result for a vendor. Again, it is about potential and all about emotions. A good sales agent will identify the best opportunity and right strategy to position potential buyers to become emotional, committing to a sale price that represents good value for both purchaser and vendor.
So over the coming weeks my advice is the same as it always has been, remain realistic, go in with an action plan because no matter what side of the fence you are on, there is a great potential for fantastic results – Now that is something you can be emotional about.
The Kardashian Property Market – SYDNEY
I have to laugh. Just last week the paper headlines were all about how the property market is in a dire straight, yet over the weekend, newspaper headlines announce Sydney as being the second most expensive city in the world! Quite simply, property and the property prices in Sydney have become as much a part of our life as The Kardashians, whether we want it or not.
There is no doubt, Sydney is an expensive city to both buy property and to live in. It’s the business hub of Australia with a harbour the world rivals. I remember back in my Navy days coming through Sydney heads after 5 months abroad and everyone was simply awestruck on how amazing the city looks, especially from the water. So realistically, to a sense, property prices are justified. We need to simply remind ourselves that prices are achieved based on supply and demand.
I think supply and demand will be the key market communicator this year. There is no point discussing how poorly the market is performing, especially if I am at an open house with 15 interested parties all asking for a contracts. Buyers need to remain realistic. We are still living in one of the most desirable locations in one of the most desirable countries in the world. If there is interest, there will be a price to match. There is no point thinking because you read an article about how the market is dropping that you will be able to wait for a bargain, it simply will not happen, especially if demand already exists.
Equally as important, to create demand, vendors should be realistic (as should the agent) when setting a sales price.
Demand over the weekend was fantastic. We had on average 13 groups through each of our sale listings. That is just as good as the middle of last year. We are yet to see what, if any, impact the Chinese market and the subsequent reactions locally will have on the Sydney Property Market.
As Sydney locals we are lucky in the fact that our property market has never been reliant on a single sector like WA to mining or other such examples. Our market is made up of several sectors of several countries keeping demand healthy.