How are 2022’s buyers different?

We’re all familiar with the various ways that lockdowns and COVID-19 shaped our preferences and criteria when it comes to selecting real estate. Some of those changes have been hallmarks of the era, while others are more permanent.

But 2022 is different for various reasons. We have conflict in Ukraine, supply chain woes, inflationary pressures that we haven’t experienced in over a decade, and we’ve just had a federal election. Combining the lasting impacts of lockdowns with these new challenges that this year has brought us, it’s not surprising that buyers are behaving differently.

In no particular order listed below are the various ways that 2022’s buyer preferences and approaches are different to recent past years’ buyers.

They’re not so keen on property that requires a renovation or extension
Buyers know about building materials shortages and soaring costs. They also know that getting a builder or a tradesperson requires a long wait, and most just don’t want to manage a renovation under current conditions.

Less trusting of agent price guides and agent dialogue about price
Following a sharp increase in underquoting and a runaway market throughout 2020 and 2021, buyers are naturally skeptical of agent quote rates, particularly for auction price guides. Despite the various price quoting approaches of many, more trustworthy agents and agencies, the deception around quoting and reserve setting by a large number of agencies has left plenty of buyers feeling as though they cannot rely on price guides at all. Whether misaligned quotes and reserves have been instigated by vendors or their agents, the resultant impact on buyers is that of mistrust.

We maintain that price-setting should always take into account recent, comparable sales, but the issue still remains that buyers often spot listings that are pitched to them in a price bracket that is beyond their maximum budget.

Wasted time, false hopes, and financial investment in due diligence comes at a cost ….and this cost is trust.

The city is back
Late last year we had a lovely duo who returned to us for support with their investment search. They had decided that they would invest in a high-rise, established city apartment because they had applied their own research and decided that it was an opportune time to purchase this type of asset given the CBD downturn during the pandemic, and their contrarian approach was based on the potential for an elastic spring-back of buyer demand for city life.

We discussed the risks and the downsides, (because high rise buildings can throw up surprises sometimes) and they bought successfully for a price that, in hindsight was excellent. Nine months’ later, I can look back at their strategy and marvel.

Our city briefs for 2022 have been greater in number than the total number of city briefs for the entire ten years’ prior.

We maintain that selecting a city property requires extreme due diligence, strong communication with Owners Corporation Managers, careful dedication to Owners Corporation fees and special levies throughout contracts, a keen understanding of Victorian Building Authority legislation, and a firm grasp of zoning types and the implication on finance approvals. But city life has returned and many of our buyers are dual-home dwellers; maintaining their city pad and enjoying their out-of-town oasis.

Buyers are more flexible about times that they are prepared to inspect properties and meet with agents
Many of us are still working remotely and flexibly. One of the most positive outcomes following COVID lockdowns has been employer trust and employee autonomy. Buyers aren’t so anxious about appealing for an early finish or a longer-than-usual lunch break, and many bosses understand that by offering flexibility, a more optimal work arrangement will ensue.

Buyers no longer feel guilty about ducking out on an errand, make an appointment or even inspect a property.

Daytime appointments are OK, and real estate agents appreciate the eased buyer workload in the evenings. Not only are buyers more accepting of daytime appointments, but they are also quite comfortable with mid week auctions and less traditional auction schedules.

The property must have a study
Work from home may not be a full time option, (or desire) for every worker, but this is a lasting change from our pandemic lockdown days and it doesn’t seem to have dropped off the must-have list. We’re all proficient with zoom/teams and we’re not comfortable taking meetings from our bedrooms. Clever nooks, custom-designed study spaces or additional bedroom count are almost always on our clients’ criteria list.

Buyers are scrutinising B grade properties harshly, yet still fighting hard and digging deep for A grade properties
Back in 2020 and 2021, buyers were so desperate to beat the rush and buy their home, that they were prepared to compromise on quality. They overlooked elements like orientation, floor plan, renovation quality, busy roads, external noise and distance from transport or arterials. Now though, with the fever of FOMO a distant memory and a more cautious set of news headlines blaring at us daily, buyers are taking the opportunity to be more discerning. The good quality properties are still tightly contested, yet the compromised properties are hanging like ripened fruit about to turn soft, either waiting for a price reduction or for the vendor to withdraw the property from the market.

Social events and travel are more important for many than inspections
Buyers aren’t so desperately determined to search, inspect, or make purchase decisions in 2022. This is partly due to market conditions feeling considerably eased compared to last year, (and less palpable pressure on buyers to move swiftly), but we mostly put it down to a realignment of social values and priorities. Especially for Melburnians, lockdowns robbed us of hundreds of days with our loved ones. Many of us are trying to make up for those lost opportunities, and this includes prioritisation of a weekend away with family and friends, even if it is to the detriment of a property search.

Buyers are feeling a sense of pressure in relation to their borrowing capacity being constrained
For those who are stretching their buying power to the extremes of their borrowing capacity, (and many do despite a large number of buyers who apply a more conservative personal spending limit), every increase in variable interest rates spells a tighter restriction on their budget. We’ve had plenty of buyers who have felt the pressure to fast track their purchase in an attempt to lock in their acquisition before their borrowing capacity is hampered.

“Let’s move to the country” enquiries have nearly all but disappeared
From September 2020 to October 2021, our prospective client enquiry for rural purchases eclipsed 60% of our total enquiry. Now we may receive the occasional enquiry, but that level of enquiry is back to pre-pandemic levels.