Real Estate Market Wrap: The Changeover Figure

The market has never been this unpredictable, and we can’t work out why...

Chapters

• 0:00 Market Optimism and Rate Cuts
• 1:01 Buying and Selling: The Changeover Figure
• 2:16 Unpredictable Property Market Patterns
• 3:13 Closing Thoughts and Market Outlook

Transcript

Speaker 1: 0:00

There's no question about it. There is a sense of optimism in the real estate market with what's happening with interest rates. However, what I will say is that a lot of the vendors have actually embraced the rates going down and have decided that they're going to up their reserves or their expectations. A lot of them have every right to do that right and that's not a real problem. Practically, if you're selling an asset and you want to get as much money as you can for it and you're not worried about rebuying in the market, because if you increase the reserve by $100,000 and you don't get your price and you can keep it and you can just hang on to it and then you might wait two, three years and then sell it, then hey, John, and life's good. But for most people that I'm selling auctions for good, but for most people that I'm selling auctions for they're actually buying other houses and more than half are normally buying something that's better. So I find that my job often is to help a vendor understand that if you were to wait for the three or four rate cuts to kick in and make the assumption that property prices go up, you also have to make the assumption that it's not just your house that's going to go up, but the one that you're looking to buy and the areas that you're looking to buy. You can't buy that as a lay-by, where you buy it today at that price and even though yours goes up that one you've secured it doesn't work that way. So I always spend time with a vendor helping them understand. The real estate transaction is a bit like the Bible, the New Testament and the Old Testament what you sell for and what you buy for, and it's the changeover figure that matters. So that's where we're at.

Speaker 1: 2:16

But the other thing that continues to happen in this real estate market and I'm really sorry it's so dark here the other thing that's happening in the real estate market is that I have never seen, like I've seen in the last two years, the unpredictability and patchiness of one property versus another property, often only a minute away. I mean even real estate people that are out there in the field every day cannot work it out. They just get surprised that one property goes off and another doesn't. And it must be terribly hard when you're valuing real estate without having the buyer intel to be actually giving an owner an honest assessment on where it's going to go. Anyway, ladies and gentlemen, it's dark, it's late, I think you can hardly see me, and I'm really, really keen to actually listen to whether the West Tigers are getting smashed again, because the game has started. So, on that note, I'll see you and hopefully next week I'll be able to give you a market wrap with more light.