Cautious optimism not carefree abandon…
Tuesday 01 Oct 2019
I love the wave of optimism that has swept across the market in recent weeks. Nothing excites an agent more than when positivity ignites activity, so it may seem a little obtuse to hear within that climate I feel compelled to issue some words of caution.
I have said many times that the role of a real estate agent is to provide clients with the facts so they can make the right decisions, even if those facts are not what the client wants to hear – perhaps especially if those facts are not what they want to hear.
And right now I think it’s important for anyone looking to enter the market as either a buyer of a vendor to know that despite the hype, the market isn’t ‘booming’. And I don’t really expect it to. It is bubbling along nicely but to expect that it is going to explode into record breaking realms is dangerous and there is a good potential it will lead to disappointment.
Yes, buyers are returning to the market. Yes values are increasing steadily but that can be explained by the extended lag in vendors being prepared to go to market. We have seen a prolonged lack of available stock which has delivered good returns for those who have taken quality properties to market and now that new stock is finally coming online it too is being eagerly received.
These are good days to be looking to do a good deal. But based on what our team are reporting I don’t believe the welcomed regeneration of activity is the beginning of another property boom.
I acknowledge that the positive media reports have come off the back of some welcomed positive statistics. And don’t get me wrong, I’m all for positive news! We have seen good auction clearance rates, a healthy rise and a long-awaited rise in values locked for the last few consecutive months and certainly an increase in overall activity.
But again I say even those statistics do not automatically mean we are heading for property boom. The low interest rate environment is certainly not inhibiting the market but our team are not seeing them as a key driver in the growth we have seen to date. In my view unemployment rates continue to be a heavy cautionary weight on any potential blowout in prices.
My advice to our clients is to be careful how you read the numbers. Rather than a boom I see them as telling a story of slow, careful rebuild of cautious confidence and as I have said before I don’t think that is a bad thing. Solid, sustained growth will deliver healthy, consistent and calculable returns for all. If you’re not convinced give me a call and I’ll talk you through it in more detail.