Why You Must Be Wary of Buyer Fatigue
One of the most common things we’re hearing at the moment sounds a lot like fatigue.
Depending on where you are in the country, there’s certainly a strong element of lockdown fatigue happening, which is impacting our mental and physical health in one way or another.
However, there is also property buyer fatigue happening at the same time – partly because of the uncertainty of the current situation.
Same, same, but different
If we think back to this time last year, when most of the country had emerged from a period of national lockdown as the pandemic continued its march around our shores, there was plenty of insecurity and fear at the time.
Of course, part of this was due to the fact that most of us had never experienced a global health emergency in our lifetimes.
But, also, with millions of people’s incomes impacted, we were all worried about what the future held for us financially as well.
As we all know, the Federal Government unleashed record amounts of spending to stimulate the economy as well as to support its citizens during this highly uncertain period of time.
At the same time, there was some unhelpful – and highly inaccurate as it turned out – predictions of real estate price doom, which meant property markets went into hibernation as the same time as a property’s human inhabitants did, too.
But it was the buyers who recognised the opportunities in front of them back then that have achieved the most over the past year.
That’s because, let’s be honest, most markets didn’t really start recovering from the pandemic-induced slowdown until late last year.
Now, here we are, about a year and a half on from the start of the pandemic, and it appears that the same thing may be happening to markets all over again.
That is, buyers and sellers are retreating from the market, even though – this time around – we actually have an achievable exit strategy laid out in front of us with vaccine rates marching rapidly to the levels that are needed for life to return to some sort of normal.
Temporary market pause
Many potential investors want to be more like Warren Buffet and less like themselves.
That is, as Buffett famously said, they want to buy when others are fearful and be fearful when others are greedy.
Alas, most investors struggle with doing this in practice because as humans we tend to gravitate towards what the majority are doing rather than the minority at any given point in time.
However, the success of this strategy has been proven many times over, including over the past year.
Just consider that the national median house value has risen by a staggering 18.4 per cent over the past year, according to CoreLogic, but the majority of that price growth actually occurred in the first seven months of this year.
Hence, those who swum against the tide last year have been the ones who have recorded the best results.
The same opportunity exists now in our opinion with a large number of buyers having retreated from the market because of lockdowns and general fatigue.
Unfortunately, because of the sheer number of lockdowns that we’re experienced, there has been enough research gathered to understand what typically happens to markets during these periods as well as after them.
According to CoreLogic research, while sales volumes generally reduce during lockdowns, property prices hold their ground, and then transactions ramp up as soon as these periods end.
In fact, the research found that:
- Auction results across Sydney and Melbourne remained resilient in lockdown, particularly circuit-breaker lockdowns, although a larger than normal number of auctions are typically withdrawn, postponed, or sold prior to the auction event.
- Transaction activity slows markedly through lockdown periods, however a “catch up” in property purchases has been evident as restrictions ease.
- Property values remained resilient through lockdowns, and experienced strong growth as social distancing restrictions eased.
Do you want to be one of those people who is sitting back as we begin re-opening and can’t believe they didn’t take advantage of this opportunity – we certainly don’t.
If you’ve been thinking about investing in property, you need to have the experts at Atlas Property Group on your side. Our investing markets have already grown by over 15% in 2021. We are constantly analysing new markets that our clients are able to take advantage of as they progress towards their own large and fantastic portfolios.