As the start of the spring selling season steadily approaches, it appears many investors may be putting themselves at risk of missing out on opportunities due to a somewhat misinformed view of market conditions.
While the strong rates of growth seen in many Australian markets this time last year have moderated, one property expert believes investors have let that slowdown have too heavy an impact on their next move.
“What we’re seeing from the investors is increased activity from investors in terms of inquiry and interest, but people aren’t keen to take the jump,” Ian Hosking Richards, director of Rocket Property told Australian Broker's sister publication Your Investment Property.
“There’s a lot of procrastination going on, they’re looking, researching and doing due diligence, but I’m finding a lot of people think the market isn’t going to move much in the next three months and there doesn’t appear to be that sense of urgency,” Hosking Richards he said.
Hosking Richards said the reluctance that is currently prevalent can have some positives for the market in that it means conditions will be unlikely to become overheated and it also means there are some prime opportunities for the more savvy investors to get in ahead of the crowd.
“In some ways it’s good, you don’t always want a feeding frenzy going on, but for a lot of people I think if they wait three months they’re not going to find that conditions are all of a sudden better for them,” Hosking Richards told Your Investment Property.
“If you’ve got buying capacity at the moment there are good opportunities out there. Why would you wait until November or the new year because of some fairly minor issues that really aren’t important?”
Brisbane has been a location of choice for Hosking Richards of late and he said the lack of investor activity in the Queensland capital recently had been driven by continued oversupply speculation.
“Places like Brisbane where there’s been a bit of talk of apartment oversupply and things like that, people are just taking their time and a lot really are procrastinating,” he told Your Investment Property.
“Like Melbourne and Sydney, Brisbane is not all one market; it can be both oversupplied and undersupplied at the same time.
“A lot of the comments coming out of Brisbane are very general in nature. Saying that Brisbane is oversupplied with apartments is not a useful comment and it’s not something that you can use to make a good investment decision.”
In Sydney, Rich Harvey, chief executive officer of propertybuyer.com.au, echoed Hosking Richards’ sentiment that those who wait may soon be kicking themselves.
“There’s definitely confidence in the market. Buyers often ask if they should wait until prices drop and I tell them they’ll be waiting a long time,” Harvey told Your Investment Property.
“Prices will tend to track a little above inflation for the next five to ten years. I don’t think we’ll see a massive correction or anything like that in prices. It will stabilise and perhaps moderate if there’s a big flood of stock in one area,” he said.
Unlike Hosking Richards and his outlook for Brisbane, Harvey believes there will be the typical activity increase in Sydney as things warm up.
“I think we’ll definitely see an uplift in activity and turnover volumes. Spring’s traditionally the favoured period for people to list and sell and also for buyers as they want to be settled before Christmas and be in before the end of the year,” he told Your Investment Property.
“Prices are still very strong and it’s still a seller’s market. Because of that I think we’ll see plenty of choice for buyers.
“Spring will start to open the valve and we’ll see things flow a bit more in terms of listings.”
