This is what I’m thinking…

You might have noticed if you’re a regular reader of this blog that I am often reluctant to jump on the bandwagon of a booming market. Yes, it’s exciting and good for business, but as a market moves, I generally like to remain cautious. There is rationale for my reticence but even I have to admit the market is pretty hot right now and as a result, this is what I’m thinking…

With respect to our media, I do think property headlines can be a little overcooked. I get it. But at times it can be frustrating when commentators rush to spruik record-breaking returns. I get it because the health of our economy, and often our personal finances, is entwined with the property market. My approach is to be realistic, which often means appearing cautious because I believe that is best for our clients.  Setting expectations too high is potentially setting clients up for disappointment.

Of course, an eternal question is whether the market is hot because we are feeling positive and have money to spend….or are we feeling positive because the market is hot and therefore we feel we have more money to spend?

And there is no denying that right now the market is hot. I agree that a key driver of that positive momentum is the very real prospect that interest rates will hold at historically low levels. Before COVID there was a growing belief that after years of gradually declining rates the time was approaching when rates would have to start to rise. That prospect was a foundation for the growing conservatism in the market.

But COVID has obviously changed more than just how we shake hands and socialise. We are now looking at rates staying low for a significant time into the future. That makes a difference, and we are seeing that play out right now in terms of demand and value.

And then of course there is the inevitable impact on the market that is FOMO: the fear of missing out. Activity increases which fuels potential buyer concerns they will be left behind. It becomes something of a self-fulfilling prophecy. Yes, there will be a tipping point when that momentum will come to a halt, but in my experience, the why and when that will happen is hard to predict.

So, I do see the strong market conditions holding. I will continue to caution against expecting record-breaking returns, but a well-executed auction campaign will capitalise on the intense buyer activity to ensure we deliver the best possible return for every property. Whether you are in the market to buy or looking to sell it’s definitely worth talking through options with your local Morton agent.

Posted in Ewan's Blog on 31st March, 2021