Is there a buyer strike in 2019? Have the buyers gone AWOL? Rich Harvey, CEO, Founder, Propertybuyer says there is a lot of fear in the market so buyers have gone on strike.
Rich gives his take on the market, when the market will find its floor and what to do in 2019 if you are looking to buy property.
Follow Rich Harvey on Soho here.
Like our videos? Don’t forget to subscribe to our Proptech Carpool series here.
Here’s the transcript of the video:
So Rich, why do you think the market is down at the moment and how's it going to recover? Look I think to be honest there's a buyer strike going on at the moment. You know, the buyers have gone AWOL. We've mentioned the elections before but access to tight credit. Banking Royal Commission. A lot of the foreign buyers have left the market. Bit of potential pockets of oversupply, which is very very localized. So there's a lot of fear out there in the market at the moment and I think the buyers are gone on strike. However, we've just noticed just the last week or two a little bit more of it uptick in sentiment. There's a few more buyers coming back. I've been to quite a lot of auctions lately and seen that there's a number of bidders. There's not just one or two. So the quality properties are selling. I think it is actually very much sentiment. Like we haven't had a market crash, we've had a market correction. We had a five-year boom from 2012 to 2017. It's a five-year run and when prices go up 70 to 90% it's not sustainable. I think we're going to see the market find its floor in 2019. I can't tell you exactly if it's got to be on the 1st of May or 13th of June. But I do believe it's going to be this year sometime and you look back and go yeah look, the market peak to trough was probably about 15 percent in Sydney. There's quite a few bear economist like Shane Oliver and some of the bank economists say it's going to drop 25%. I don't hold to that view at all. I think the majority of the reductions have already happened and I think the market sentiment will start to improve because people, people need to move. People outgrow their home. Investors want to put their money into a safe haven. Yeah. So, you know a lot of people think oh gosh, I won't do anything and my advice to any home buyer or investor is don't follow the herd. Find the right property that meets your needs, buy it. But make sure you pay the right price. Yeah, sure. Everyone waits for the stars to align. You know, is now the time to buy a property? Is not probably the right question. It's is this property right for my needs and am I paying the right price today? Yeah. Sure. That's more the question you should be asking. So for buyers at the moment what's your advice? Engage with you early? Get the ball moving now rather than waiting? That would be my advice. I mean it's harder to get money but the banks are still lending. And I think we'll start to see the banks loosen up a little bit more this year. I always say yeah, I'd rather be buying now on a property and engaging on a property now than having 10 bidders at an auction. You know when the price goes over reserve, buy it while there's a good opportunity to negotiate a good discount. But don't just buy because it's a discount. A lot of people come to us and say Rich can you buy me a bargain? You know what, I say well, I'll absolutely do my best but don't buy it because it's a bargain because it could be on a main road and next to a petrol station. Don't bother with that, a property that's a poor quality property. Buy a property that's quality and going to deliver returns for you long-term.
