Finding Off-market Property
Finding Off-market Property Embarking on the journey to find your dream home or the next addition to your investment portfolio can be both exhilarating and
People’s fear at the moment is elevated and continually boosted by the media, some of it is real and warranted and people do need to sit up and listen. But some is just sensationalistic garbage…utter trash that is irresponsible journalism at best.
The COVID-19 crisis is real, and the world’s inhabitants are under attack at the moment on three major fronts with health, economic and psychological distress. They are doing a three-way tango and affecting our psyche and impacting our lifestyle in a very big way. But there are a truckload of good things still happening as well, you just need to see them by needing to work out whether you’re a ‘glass is half full or half empty’ kind of person.
During this pandemic that we are all experiencing, we need to stay grounded and try and stick to the facts and filter out the hype and hysteria because when you know the facts and are not swayed by the noise, you’d be surprised and how much of a ‘half full’ kind of person you really are.
Property is no different.
There is hype, fearmongering, the impending doom and gloom portrayed by many commercial media houses as they tussle for our eyeballs on their screens. The commercial media manufactures the garbage and spreads it around and then social media kicks in and distributes it globally.
Our advice to you in this uncertain time is filter out the trash and keep your eye on the facts. How?
The best way to do this is…you’ve probably guessed by now but be very wary of most commercial news media narratives. They misquote, half quote and sometimes simply make brash statements without any substantiated facts that mostly play on our fears. Fear is the most powerful emotion we experience, one that we can never eliminate, but one that we can control to suppress its effects.
Listen to only commentary from industry experts, the people who have been in the industry for 20 and even 30 years or more. These same people who have lived through and experienced many property cycles and economic crisis’ like the recession in 1982-83, crash of 1987 followed by a recession in 1991-92, the tech crash in the late 90s, the GFC in 2008-09 and so on.
But when you do, listen to the complete story they are telling. Media excels at taking one particular sound bite or snippet from an interview, and creating a fear-riddled story which at times is on a completely different tangent to the experts original commentary. Add a dramatic headline that preys on our fears even more that sucks us right in and Boom! We have an editorial that makes a huge impact in the news. A panicked readership forms, consumer sentiment falls and because comments and quotes have come from an expert in the field, the public has validated the editorial offering.
The collateral damage? Average punters Joe & Karen who are none the wiser take this information as gospel and act accordingly. More often than not their action(s) yield them an unexpected result that turns into a poor decision in hindsight. Do you get my point?
Whilst I have slapped the media around a bit in this email, my main point is just be wary, be very careful where you get your information from.
Don’t panic and do anything rash with anything property related at the moment. If you see something that applies or affects you personally or your portfolio, find out more by doing the research and by asking lots of questions with the right people.
We’ve had a lot of enquiries from people this last month about buying property, and our opinion is as follows:
WHO SHOULD BUY NOW?
If your employment is secure, you have buffers in place and able to secure finance – now is probably one of the best times you will ever have to buy a property. We are 100% serious. What we are seeing we haven’t seen since the crash in 1987. I’m showing my age a little here but think about this…
Money is cheap. Interest rates are at an all-time low and will remain low for quite a few years. The Reserve Bank governor has stated that he will not move the cash rate from a historical low of 0.25% until the unemployment rate drops to 4.5% and inflation running at 2-3%. And he suggests this will take up to 3 years or more whilst during this time the economy could boom.
Unemployment will go up with this pandemic – yes it will, and it will hurt many, but the government is doing its best to keep stimulating the economy. More to the point there is still a much larger majority that are still in the workforce.
Many vendors are still selling, whilst it’s a longer sales process due to no physical auctions and open homes, we are still getting out there and inspecting property by private appointment and doing deals.
Very low competition for sourcing a property because fear and uncertainty has kept people away. For a buyer, this is gold!
Off market property opportunities have skyrocketed. We’ve inspected dozens of off market homes in good growth areas and yields that would suit 90% of property investors, and some even heavily discounted. More gold for the buyer.
The impending market downturn? Some areas ‘might’ drop in price but as a whole, market transaction volumes have slowed, values have not dropped. The drop that we might see in some areas will be mitigated due to the pent-up demand of investors that will hit the market once economic conditions ease and when prices will continue to move upwards again. Historically, after every ‘crash’, world event or economic downturn there has always been an even bigger rebound, fact. Google it and see for yourself.
WHO SHOULD NOT BUY NOW?
In our opinion:
If your employment is not secure – we suggest you wait, until you know it is.
If your employment is secure but you have no buffers in place for a rainy day, also hold off. But be ready to strike as soon as things improve because this will happen sooner than you think.
Now is not the time to overextend yourself or commit to purchases that might put you in future financial hardship.
We have too many to list but stay close and talk to people who are on the ground like a Buyer’s Agent (or selling agent if you’re selling). Buyer’s Agents like us who are still inspecting and purchasing properties for clients are still doing deals and can see first-hand what is happening.
Don’t try and time the market to pick the bottom of the ‘trough’ because you won’t. The data you see and read are always lagging by approximately 3 months, and soon as you read in the papers that a boom has started, you will have missed that sweet spot that can make you the most gains.
With the comparatively low residential property construction occurring, all-time low interest rates, evidence that banks are still lending, loosening of APRA’s rules the last year or so; all added to the pent-up demand of buyers holding off due to the temporary economic conditions we’re experiencing…we will see that supply will continue to be low, and demand will soar. And we all know what happens when this happens.
Question is, if you’re ready but holding off – do you want to miss out?
I’ll leave it there for now but if you have any questions, with any of the above, feel free to reach out at any time. I’ll be more than happy to expand in detail on any of the above points that I’ve mentioned.
Stay safe everyone.
P.S. “Never let the future disturb you. You will meet it, if you have to, with the same weapons of reason which today arm you against the present” Marcus Aurelius
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