A turbocharged property market, roaring out of the COVID-19 enforced recession is set to fly into Christmas and beyond, according to one of Australia’s leading real estate figures.
Tom Panos, Australia’s leading real estate coach and trainer believes a series of post-recession factors have come together to create very fertile ground for buyers and sellers in our real estate market.
However there are a couple of conditions.
1. Houses are hot but units are not
“Because of the clarity a lot of people have had during the pandemic, demand for houses is as strong as it has ever been,” Mr Panos said.
“People who want to make a move, want something bigger. They want that backyard. If the last six months have taught us anything it is that space matters.”
2. Loosening of lending criteria is needed
“There appears to be no shortage of appetite for real estate,” Mr Panos said.
“The key drivers here are the cost of money and its availability. Treasurer Josh Frydenberg has indicated that in the near future there will be a loosening of lending criteria. And in doing so he has basically said to the market place, the money is out there, it’s cheap so get buying if the price is right for you.”
Christmas buying rush, and beyond
Stubbornly resilient home prices have forced some of the market’s biggest bears to change their point of view. AMP’s Shane Oliver who feared greatly for the impact the pandemic would have on Australian housing is now talking of a “spring bounce”. SQM Founder Louis Christopher is another who has regained his faith in the market.
As have many home buyers. According to Westpac’s ‘time to buy a dwelling’ index, confidence in the housing market has boomed to its highest level since September 2019.
“The harshest critics have basically retreated saying the decline will not be as steep as we thought,” Mr Panos said.
“The high clearance rates, (72 per cent last weekend according to CoreLogic) continue to surprise the pundits out there. I have a feeling the market will keep on powering right through to Christmas Day. The lost sales period that NSW had during lockdown will likely ensure that. With international travel off the cards. A lot of agents won’t have their traditional four week break. It will just be two weeks and then they will launch into the new year.”
Patchy sales patterns
However not all homes are being keenly fought over by eager buyers. There are spots of bother in the market.
“It’s becoming obvious there is a patchiness out there,” Mr Panos said.
“Properties that tick all the boxes are selling well. However those with a few crosses against them aren’t. There are far more people out there now willing to borrow extra funds to get exactly what they want.”
In some markets properties with marks against them might include those that need a lot of maintenance or refurbishment or renovation, those with limited outdoor space or even those on a busy main road.
Victoria could hit huge milestone
“There has been so much repressed action in Victoria that now they have opened up and will continue to do so, that pent up activity could really explode,” Mr Panos said.
“Over the weekend I did a live chat on my Facebook page with the President of Real Estate Institute of Victoria Leah Calnan and she said they might hit 1000 auctions on a weekend in the coming weeks.
“However the concern is that we might see an oversupply of homes come onto the market very quickly and that is never a good sign.
“The bottom line is that those people who have had their employment affected most by COVID are not necessarily the people who would be buying real estate. Generally it is the guy or girl doing a few shifts at a pub in Newtown who have lost their job. Those people who are in a share house in Newton, not those looking to buy a $1.5 million home.”
First home buyers are flying
Treasurer Fydenberg’s Federal Budget was a spend-friendly one in regards to stimulating the economy out of the coronavirus trough. And it come with further incentives for first home buyers via the First Home Loan Deposit Scheme.
“The Budget wasn’t overly positive or overly negative for real estate,” Mr Panos said.
“However one thing you can’t deny is that it has impacted the behaviour. First home buyers are flying. There are so many in the market looking for that first home.
“One thing first home buyers are always lining up is the comparison of renting versus buying and if you do the maths at the moment, buying does look very good.”
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