Property update snapshot

This would be my latest Sunday blog ever. It’s 10pm. I don’t think I’ve ever worked continuously through a weekend like I have this weekend. It’s been utterly strange.

From last minute boardroom auction notifications to urgent agent calls, alerting me to a property selling, weekend solicitor reviews and hurried second inspections, buyer behaviour has been nothing short of incongruent.

Last Saturday’s Melbourne auction clearance rate in the seventieth percentile had me scratching my head. “Surely, not everyone is keen to buy property on Day-1 into a pandemic? “

But fast forward a week, our auction clearance rate of 65% signalled that buyer sentiment hadn’t really changed much. Sure, eight percent is significant, but media hysteria, kids being pulled out of school, constant European news headlines and stock market falls would have ordinarily signalled a more significant change in mood.

Not only did a raft of properties receive super-strong offers prior to scheduled auction dates, but some well thought-out knockout offers were still contested by determined opponent buyers. Take these properties, for example;

This auction-before-the-auction came to a head on Friday. I appraised the property at $1.05M. A knock out offer of $1.1M eliminated us, yet 24 hours later, two more contenders challenged the knockout offer and the property sold for a reported circa-$1.2M.

This auction on Saturday was well-attended by neighbours, bidders, a journalist, (a lovely one!) and multiple reporter photographers alike. Appraised at high sevens, it sold for $805,000 and sadly we didn’t collect the keys, but four bidders confirmed that Lalor was the place to buy in.

And tonight’s mad scramble has involved multiple campaigns being brought forward in light of Daniel Andrew’s press release, and this particular property has already received an initial offer some $100,000 above the top of its quote range.

Needless to say we won’t be challenging this one.

I believe that there are four reasons for this particular buyer rush;

• Firstly, those who are confident about continuity of income recognise that the significant interest rate drops from our RBA will translate into heightened borrowing capacity, and a likely strong rebound when things (finally) recover,
• Some feel that opportunistic buying behaviour could serve them well, (particularly taking into account those who recall the buying conditions pre-Federal election this time, last year),
• Some genuinely need/want a roof over their heads before an imminent shutdown begins, and
• Those investors who have determined that property is a better long term asset class to park their money in, (and it IS happening. I’ve had a few multi-property assignments thrust my way from investors who are swapping asset classes).

This week has been intense.

I’ve learnt that we are very good at adapting to a new status quo when it comes to how we facilitate transactions. From online auctions to online settlements to online meetings. It’s all online.

I’ve leant that humans can be incredibly kind. Like check-on-your-elderly-neighbour-with-casserole kind. Like checking in to other small business owners with chat groups and amazing shared insights kind.

I’ve also learnt that fake news, alarmist rubbish and scare-tactics adorn our internet and social media. We must be critical and pragmatic thinkers, as there is no room in our tough line up of tasks for rot.

We have friends to support, industry friends to workshop issues with and family to love and protect.

The property market is likely to go on pause for a bit while we have a lockdown. Supply and demand is key; and we must remember the fundamentals of economics.

I’ve taken journalist calls daily, penned thoughtful and accurate accounts of my on-the-ground experiences, and I maintain that as difficult as this environment is for us, our record low interest rates combined with our $189B Federal Government stimulus and relief will make for a significant buffer during our toughest times, and a strong rebound when the green shoots start to show.

Many families will experience horrible stress, job losses and business discontinuity. In all of this, they need to reach out for the assistance that they are entitled to. Links here:

https://www.business.gov.au/risk-management/emergency-management/coronavirus-information-and-support-for-business/what-support-is-available-to-your-business

https://www.abc.net.au/news/2020-03-22/coronavirus-second-stimulus-package-how-much-money-you-will-get/12078972

https://treasury.gov.au/coronavirus

Information is unfolding daily and we find ourselves in uncharted territory for a while.

We must look after each other, look after our own health and watch out for those who are mentally struggling with this difficult environment. Beyond Blue are doing amazing things and if we are worried for anyone’s mental welfare we must reach out.

This is a time for us to commit to new skills, master business and life-admin adaptation, and raise resilient children.

It takes a village and we can all play a valuable part.