I’ve been thinking about the impact of the Federal Budget and have decided that rather than talk about the numbers I’m going to talk about the message. In my view the Budget presented was a pretty good reflection, on a slightly grander scale, of the predicament many hoping to make a move in the residential property market are in right now. And in broad terms, the Budget was a realistic, practical response to that predicament.
I’m not trying to be political here. I’m not commenting directly on funding decisions or specific policies. I’m talking very plainly about the very clear message the Government repeated as they discussed those budget decisions. They know the cost of money is increasing at the same time the cost of absolutely everything is increasing. They wanted to spend money but couldn’t afford everything they wanted.
It certainly sounds like the predicament of most Morton clients walking through the doors of our eight offices right now to talk about how to successfully buy and sell a property.
So, what to do? Ignore the fact the economy is tightening and spend up big in the blind hope it won’t be that bad? Or simply lock the door and wait until everything has settled down?
Neither option is palatable and, in reality, neither option is practical. Not for a government, nor for a household.
Instead, what the Government presented were tough spending cutbacks but also careful spending plans on projects considered essential. They accepted the need for short-term pain but also recognised the opportunity for long-term gain.
And so, it is for the residential property market.
It’s tough. Budgets are tight and getting tighter as adjustments are made for the rising cost of borrowing and rising inflation. That’s potentially going to mean buyers can’t afford everything on their wish list but, like the Federal Government, it doesn’t automatically mean they stop spending. With a budget in place, many of our clients remain active in the market because they consider purchasing a property as essential. They accept the combination of the current market and economic conditions means short-term pain but with the opportunity to deliver a long-term gain.
That approach is reflected in the stats for our business. Morton has had consistent listing numbers across the year. By that I don’t mean consistent in comparison to previous yearly trends, I mean it quite literally. The number of new properties we have had coming online each month has been the same…. every month.
That’s unusual because traditionally volumes are influenced by seasonal and economic factors. Not this year. Given there has been so much going on it feels a bit strange that everything has been so steady, but I suppose that’s just it.
Despite the turmoil people are considering what is essential, making adjustments, making the hard calls and being careful but ultimately, they are pushing on with a level of confidence in the long-term strength of the market.