“Headbutting” Vendors and Buyers in “Mexican Standoff” – A Silly Time
30 January 2019
If the power of the press wasn’t shown in the replacement of Malcolm Turnbull then it is clearly shown in what is happening in the property market, certainly here in the Upper Blue Mountains.
The Sydney press has been relentless!
It’s as though someone is, in Stock Exchange terms, “shorting” property.
Here are some headlines in the last three – six months.
- “The Property price falls in Sydney and Melbourne are speeding up”
- “Housing downturn enters second phase, with investor demand drying up: RBA”
- “Sydney’s house price falls just kicked up another gear”
- “House prices could drop 30 per cent in ‘deep recession’ scenario: USB”
- “More investors opt out, more for sale, as interest-only loans end”
- “Australian property prices facing ‘longest downturn in decades’, says UBS”
…… and so it goes on. The above is merely six of the 20 or so articles I have saved and printed off over this time.
All this as a result of a Sydney market that has gone down, on one report, 8.6%.
That of course is an “average” but includes the downturn of “off the plan” unit buying, and units generally. Of course the Sydney average is still about $1 million – you can buy and live like a King and Queen up here for that!
There is some sign that the Press may be relenting but only a glimpse.
Those articles include :-
- “House price slump is now weighing on the economy, but is it getting worse or bottoming out?”
- “The Sydney suburbs where house prices aren’t falling”
Of course, the Banking Royal Commission could be having its effect. Certainly, and my Broker connections confirm it, there has been an incredible slowdown in loan approvals.
Until the Commission is over that is not going to change!
However it is dramatically affecting the amount of money coming into the market place to actually make the purchase possible.
Recent personal experience showed that requests for further information just goes on and on eg “Where is your unused AMEX statement from 10 years ago ?”
Some have even been bold enough to suggest that the Banks are holding the Government to task by this technique, threatening to damage the property market significantly if the Royal Commission doesn’t end – not sure about that one.
Where does all this leave us?
The Purchasers who are turning up to the Open Houses have a new attitude –
“Next week I’ll bring my spouse”
and this remark is said when there are two or three other buyers, if you’re lucky, in the room. This contrasts with the “I’ve missed out on the last two properties I liked”. This was usual at Open Houses in 2017, certainly up until October 2017.
Of course, to some extent Real Estate Agents have brought this on themselves.
You can look around at the boards that have been up for a long time and trawl through the net.
“Buying the listing” is misinforming the Vendor of a higher value of the property in order to have the Agency Agreement signed – it is fatal in the current market!
If the prices are falling – falling from what?
Is the real value of property in the Upper Blue Mountains falling or – is the selling price falling from exaggerated Vendor wishes and Real Estate Agents co-operation, to what was reality in the first place.
True it is that some areas, and Blackheath may be one of them, enjoyed a very dramatic price rise and there has to be some form of correction there.
At this very moment, even marketing the property at “reality” is having its difficulties.
The buyers are simply waiting for the “CRASH”.
They expect the Vendor to be standing by the door with a knife at their wrists offering the property at half price.
This is simply not going to happen.
My prediction is that we will continue to have another couple of months where the “stand off” between buyers and Vendors up here continues.
What it will take of course is Buyers who really do want a property, simply missing out.
Someone else is being smart enough to come in with a reasonable, reality price, and take the property – a lesson learnt.
Missing out on something you love waiting for the “CRASH” may not be so smart.
Over the Christmas period there are some real hints at the open houses and electronic enquiry that the buyers are sniffing around in numbers.
Of course “price” is on everyone’s lips, but they are turning up.