Is this the boom we had to have?

Record property prices. Who can blame us for not seeing this coming?

Since the beginning of the year, I have been writing about the upswing in the property market. Each week has become even more eye opening when reading auction results and the disparity between what the property was expected to sell for and what it actually achieved.

When the coronavirus pandemic overran us and our freedom, no one predicted that the real estate market would take off. In fact, it was quite the opposite. The world was changing and not for the better. We were staring into the barrel of a full-blown recession, if not a depression. World economies were in peril, including Australia’s, and along with that, we would see a culling of property prices across the board.

Fast forward 12 months and the seemingly impossible has happened. How?

When consumer confidence drops, so does our spending. A change in lifestyle is not deemed appropriate so, rather than continue with our plans, we wait to see what happens. And this is exactly what happened this time last year.

The vast majority of the people I spoke to at the onset of COVID-19 had decided to put their real estate plans on hold. This almost brought the property market to a grinding halt. Commentary from analysts and economic experts was universally negative. Property prices were going to fall and the Australian economy was going to experience hardship. No one wanted to buy property if they could wait six months and get the same thing for much less.

However, the government was quick to respond and devised support packages for individuals and businesses, which so far have appeared to have averted a crisis. Superannuation was allowed to be tapped into; banks stepped in, offering mortgage ‘holidays’; landlords renegotiated rents – all the while devising strategies to combat the coronavirus threat to health.

What has transpired has been nothing short of surprising.

Australia is seen as one of the countries that have been most successful in avoiding disaster due to the virus – and being an island has fared well for us in this quest. This has reinjected an abundance of confidence back into the community. This, along with the lowest interest rates on record and a deficit of stock, has seen lenders run off their feet and sent competition for property soaring.

Property prices bottomed out in September 2020 and at the end of March, national housing values were 5.6% above the previous market peak in October 2017. In Sydney however, the total value of the dwelling market is actually only 2.6% higher than the previous peak, which was in July of 2017.

But how far will this go?

From my conversations in our market, buyers are becoming increasingly frustrated with the disproportionate pricing. So I wouldn’t be surprised to see a drop-off in buyer numbers as they wait for the market to recalibrate.

Likewise, homeowners looking to sell will become increasingly tempted by the prices they are seeing and we may see an increase in stock numbers hit the market.

This will all add up to create a plateauing market. But the timeline for this remains the biggest question.

Therefore, if you are thinking of selling, now is one of the best times to start the conversation and planning. Our market conditions are unique right now and perfect to take advantage of.

We achieve our strongest results by following a proven strategy, tailor-made to your situation. Take the opportunity to gain from this advantage and my expertise and contact me now.

If, however, you or anyone you know would just like to discuss the current value of your home and the best strategy to get you the best price when you come to sell, you can contact me any time.

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Published August 24, 2021

By Belinda Cassano