By Joshua Nicotera – Property Sales Consultant
In Melbourne, many homeowners are closing in on their “zero hour”. It has been well documented in recent months that the property market has taken a downturn. Prices have fallen by a median 5.80% in Melbourne or 4.10% nationwide (year to date) by the end of November 2018. Some homeowners and investors have either already sold, while others are planning to list their property on the market as soon as possible.
The influence of the media on the actions of property owners is evident. In September this year, 60 Minutes suggested that “the slump we are in is more like falling off a cliff”. They went on to claim that “the value of your house could slide by as much as 40% in the next year”.
“Huh? 40%? … In 12 months?”
It goes without saying that experts have been wrong before. Predicting a property “crash” must take into account forecasting, predictions, and estimating – all of which is speculation. For the last four years, property and finance experts were claiming a market downturn was approaching. Many of them feel vindicated due to the property price trends of the last six months. This is a false sense of satisfaction. These experts have been crying “wolf” for years and the fact that we have finally hit a slow market doesn’t validate their predictions. Eventually, their predictions would have become true since price corrections are ordinary and necessary for any market.
There are many other contributing factors to the recent trend of property prices. Changes to foreign investment regulations, stricter lending criteria from financial institutions, a change in economic conditions on a global scale; and recent crackdowns on issues such as money laundering and underquoting have all played a role. Therefore, the current situation of a slow market is explainable based on these factors. These circumstances have caused many potential buyers to maintain an intention to purchase but are restricted due to an array of reasons.
Importantly, in this period of change; two markets retain a positive attitude and are active in the market. They are investors and first home buyers. Generally speaking, investors are motivated by the opportunity of finding a good deal, while first home buyers are enthusiastic after the stamp duty incentives introduced by the Victorian government.
In these challenging times, choosing to strategically target either investors or first home buyers seems to be the winning strategy.
It is true that some vendors need to sell for their own personal or external reasons. If you have chosen a skilled and trusted real estate agent with the most suitable marketing strategies, then it is possible to achieve an optimal result for your property. The key is to tailor your marketing campaign to target your ideal purchaser. The best strategy will increase the property’s exposure due to attracting a buyer pool big enough to create competition during the sales campaign. Too many properties hit the market without real estate agents having sufficient knowledge of their target market. It is unfortunate since essentially the price the property achieves will suffer.
The media is an essential source for all Australians that creates and shapes public opinion — for example, our views on the performance of politicians, athletes, musicians, and many ethical topics is shaped based on the information the media provides. However, it is important to distinguish between facts and speculation. There is a perpetual difference between a media outlet reporting with evidence, and providing an opinion based on speculation. Knowledgeable and trusted real estate agents should advocate for homeowners to challenge the information provided by the media and make conclusions for themselves.
During these uncertain intervals in the market, helpful and honest property advice can be crucial. Having constructive discourse with experienced professionals, completing research from trusted sources, and challenging experts in the media is decisive. This analysis and advice can be the difference between Melbourne homeowners falling victim to short-term uncertainty or keeping their faith with a vision for long-term confidence.