Unchartered Territory... But Not Unexplained - June 2021
By Guest Blogger, Leanne Pilkington, CEO,
Laing & Simmons and President REINSW
REINSW President and Laing+Simmons CEO Leanne Pilkington reckons she’s never seen anything like it. But she can understand why it’s happening, and the reasons make sense.
Forty years, I’ve been in this industry, but the market today is different to any other I’ve experienced.
Firstly, the uplift in values is indiscriminate. Most areas are impacted, all at the same time. Key regional centers in particular are enjoying a boom as people, empowered by the option of working from home some or all of the time, look to places with lifestyle appeal.
And herein lies the second main difference: its lifestyle driven. Previously, when we’ve seen growth like this, it has been against the backdrop of major infrastructure investments or mining booms.
It makes sense. The events of 2020 affected us all in ways none of us were prepared for, and it’s natural for people to gravitate to places they want to spend time in.
The message to property owners seems clear. If you’re thinking of selling, now is the time to take advantage of seriously strong market conditions. But, as ever, it’s not always that simple.
Supply. It’s a double-edged sword. Vendors are rightly confident they’ll get a strong price for their property, but many are hesitant to sell because they’re unsure they’ll have a suitable home to move to.
It’s understandable with supply so constrained. But anyone weighing up a sale would be wise to speak to an agent now. The data is pointing to an increase in listings in spring and it makes sense to get ahead of that, if the circumstances are right.
Plus, booms don’t last forever. Most likely, prices will gradually ease, and a more sustainable, steady, long-term growth scenario will set in. All the more reason this boom need not be feared, even for young people looking to enter the market.
That’s not to say it’s not daunting. But history is instructive. Generally speaking, the best time to have purchased property in Australia was 40 or more years ago. Long-term growth, irrespective of ebbs and flows, is the reason. There’s an argument to suggest the second-best time is today.
The Government has just announced a range of incentives in the budget. Interest rates are low and will be for some time. The focus on jobs, infrastructure, the economy – the COVID recovery will be a marathon, but the conditions Governments will need to foster throughout will bode well for property ownership.
So, for first home buyers, see what you can get. Investigate the available incentives at both a state and Federal level and take a cautiously optimistic approach.
Same goes for those looking to upgrade. Cautious optimism is warranted, there may be incentives that apply, so do your research. In doing so, be clear on what you need as opposed to what simply might be nice to have.
This mindset can hold upgraders back. A home perfect in every way for your growing family may not actually exist. Upgraders should open their mind to different areas, be clear on what they will and won’t compromise on, and when they find something that meets their needs, be ready to act quickly.
For downsizers, the options may seem greater, and perhaps they are, but the need to be clear on what you need is equally important. Many downsizers move to lifestyle destinations only to move back after a few years. Research matters, even if it’s renting in the place you think you want to live, to try before you buy.
In property, it makes sense to be clear on what you need. As it does with what you’re willing to pay. In this respect, auctions can be a test, especially when the market is hot.
At the moment, a lot of properties are selling above reserve. Emotions are getting the better of some. So why not research your emotions too?
One way is to set your limit and then ask yourself how you’d feel if the home sold for $10k or more above that limit. How would you feel if you missed out?
This answer helps either reaffirm the limit you’ve set, or highlight that you may have room to give, either way. You can then go into the auction with a clear mindset, having tested your emotions, and if you’re still worried you’ll get too emotional, ask someone to bid on your behalf. Makes sense.
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