February 12, 2025 • 16 mins
Hosts Ciaran O'Brien and Peter O'Malley explore the rise of the indifferent buyer in today’s property market and how emotional decision-making can lead to costly mistakes. Peter provides key insights on navigating market dynamics, understanding buyer psychology, and making informed purchasing decisions.
We discuss the risks of impulsive buying out of frustration, the advantage for creative and flexible buyers, and how interest rates continue to shape affordability. With a focus on long-term value, we highlight the importance of unique property features and practical strategies for approaching property searches rationally.
As always if there is a specific topic you would like for us to cover, please reach out and let us know!
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Episode Transcript
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Speaker 1 (00:00):
All down, all silent, going, going, going, go on son
Congratulations.
Speaker 2 (00:07):
Welcome to the Current Market Insights podcast
brought to you by HarrisPartners Real Estate.
Each episode we chat with realestate author and industry
leader, peter O'Malley, todiscuss the current property
market conditions and provideinsights to assist you on your
property journey.
Speaker 3 (00:29):
Hello and welcome to another edition of Current
Market Insights.
I'm your host, kieran O'Brien,and with me, as every other week
, is Mr Peter O'Malley.
Peter, hello.
Speaker 1 (00:37):
Hi, kieran, great to be with you.
Speaker 3 (00:38):
Always great to be with you, peter.
I want to chat to you this weekabout buyers.
I think it's my favourite topic, to be honest, in all the
things we talk about, I lovehelping buyers where we can,
because I know you certainlyhelped me when I was buying my
place some time ago.
Last week we spoke a lot aboutwhat's happening in the market,
the uncertainty around interestrates, et cetera, and one of the
(01:00):
things that we did talk aboutwas the auction clearance rate
and the overall sales volumesand also the types of buyers
that were in the market at themoment.
And for the first time, I think,since we've started the podcast
, you talked about a differenttype of buyer.
You know you always mention themore traditional ones.
You know the young family, thefirst home buyers, the investors
(01:21):
, etc.
But last week you talked aboutwhat you know, the person you
labeled as the indifferent buyer, and I thought, off the back of
that, it might be a goodopportunity to talk about for
buyers that are indifferent.
Perhaps they're just new or,you know, inexperienced in the
market, people who have beentrying to buy for a little while
but can't, etc.
(01:41):
Etc.
To buy for a little while butcan't, et cetera, et cetera.
What is the best approach andwhat tools and advice can you
provide to any buyer out thereto make sure that they can make
a decision about what is theright property for them and then
act accordingly, so as not toeither miss out or make a pretty
horrible error?
Speaker 1 (02:00):
Well, the more you want something, the less likely
you are to be prepared to missit, right.
Speaker 3 (02:08):
Oh, exactly.
Speaker 1 (02:08):
So everyone knows the old adage about negotiation the
power rests with the personthat's prepared to walk away.
Yeah, when we spoke last weekabout the indifferent or the
discretionary buyer, that wassomething that we've seen in the
new year.
Where prices are, they're offtheir peak, but they're still
very high in sydney, right?
(02:29):
Yeah, of course, they're 40, 40, 50 percent above any other
capital city in australia.
Yes, interest rate cuts, uh,you know, are coming this year.
Um, but are they going to be?
You know, are they going to cutso deeply that they're going to
stimulate the housing market?
Probably not.
Vendors are asking for pricesin many instances, that they
(02:54):
paid in 2021, when mortgagerates were two percent or 2.2
percent or 1.99, and buyers whoare having to pay a mortgage
rate of around 6% are sayingthat's not quite worth it for me
.
Speaker 3 (03:08):
No, thank you, sir.
Yeah.
Speaker 1 (03:10):
Thanks for the opportunity, but no thanks.
So these are the dynamics inthe current property market and
that's why stock levels willplay such a big role in how the
market performs in the next sixmonths, because the less stock
that's on the market, the morethe vendors can say to the
buyers well, if you don't buythis, what are you going to buy?
And the more stock that is onthe market, the more the buyers
(03:34):
can say to the vendors and thevendors agent that's my offer
and if you don't want it, I'llbuy the one down the down the
road or around the corner.
Very simplistic description ofthe property market, kieran, but
that's essentially how itoperates in the short term.
Speaker 3 (03:50):
Okay.
So with that in mind, thebuyers, you know at the moment,
as you're suggesting, they mayactually be in a pretty good
position because, you know, asnumbers do start to rise in
terms of listing volume, theyhave that flexibility and, in
some ways, that time to be ableto actually step through and
make a logical, reasoneddecision about a purchase.
(04:11):
One of the things you'vewritten about in the past and
you know on this topic is thatbuyers in some circumstances can
end up getting frustrated withthe property market and the
property process and, as aresult, just lash out and buy
something so they can either getonto the ladder or just.
You know, I hear people say allthe time I'm so thankful I
(04:31):
never have to go to another openhome.
You know, just avoid the cycle,given that the market is a bit
uncertain at the moment thosetraditional barriers, I guess,
or mistakes that buyers make,would you say that they're maybe
not as huge an issue at themoment as they could be or have
been.
Speaker 1 (04:48):
I think there's always buyers in every market
that are frustrated and fed upand then buy a property nearly
out of spite or nearly out of adesire to just finish off the
process.
And they'll often do it havingjust missed out on a property
that they believe they shouldhave purchased, whether the
agent underquoted and theymissed out on it on the day
(05:08):
because they didn't think itwould go that high, or someone
pipped them at the post, orthey're playing real estate
poker with the real estate agentsaying, well, I don't reckon
they do have another buyer, soI'm not going to increase my
offer.
And then, before they know it,they've been told the property
sold.
And then all of that combinesto make them a frustrated and
fed up buyer with the processand they go out and buy either
(05:30):
the wrong property or the rightproperty at too high a price.
Speaker 3 (05:35):
Yeah, I must admit I saw, pardon me, I saw just last
week some commentary online froma person who'd said exactly
that.
Actually we you know thenegotiating with the agent over
the property we loved.
It told us there was anotherbuyer.
We thought he was bluffing, thewhole process is a sham, etc.
Etc.
Only to find out 24 hours laterwe'd missed the property.
(05:55):
And now we're heartbroken.
What do we do?
And all the advice was well, ifyou find the right one, you
should buy it.
So, given that's the commentaryonline from a bunch of non-real
estate strangers, do you thinkthat's a reasonable bit of
advice that if you are a buyer,irregardless of market, if you
find the property that you thinkis perfect for what you need at
that time and that place, thatit's worth just taking action?
Speaker 1 (06:18):
Yeah, if you are a buyer.
So let's go back when you saidthat buyers have kind of got the
advantage out there at themoment.
They do in some markets andthey do in some niches of the
market, if you like.
There are people who are buyingat the moment, who are buying
at the moment, who are listeningat the moment and buying at the
moment, that will hear thisdiscussion that we're having and
(06:38):
then they'll try to buy aproperty on the weekend and
they'll find themselves in amulti-buyer situation.
So even in a flat market, goodproperties still attract good
number of buyers.
Even in a booming market, poorproperties can still sit on the
market for a long time to findthe right buyer.
(06:59):
So whilst we're giving genericadvice here that the auction
clearance rate is stubbornlystuck below 50% in Sydney and
has been for quite some time,that's just generic or broad,
broad based assessment of howthe market's going.
You as a buyer need to know howthe market is performing in
your price category.
(07:19):
If you are one of thosediscretionary buyers that will
move for the right property atthe right price at the right
time, all kudos to you for beingin that situation, because the
hardest thing to negotiateagainst.
Whether you're selling cars,houses, computers or or holiday
packages is the indifferentbuyer.
I'll only buy if it's good andcompelling value.
(07:43):
So a lot of agent, a lot ofbuyers aim to project that
persona to real estate agentsbut can't quite pull it off
because they're actuallyemotionally engaged in a subject
property and they're saying wedon't care if we miss it.
Similar to your internetexample.
There we called the agentsbluff.
We don't think there is anotherbuyer.
Oops, there was another buyer.
(08:04):
Furthermore, the property sold.
Now we've missed out on thehome of our dreams.
Whatever can we do?
Well, the only answer there isdon't, don't, don't play.
You know, don't, don't playthat game on the next property,
which might come up nextSaturday or might not come up
until 2026 yeah, certainly.
Speaker 3 (08:22):
Uh, well, that that's the perfect example, I think,
of where, potentially, as peryour experiences and what you've
written about in the past,those buyers could go out next
week in a flurry of anger andpurchase an apartment that they
don't really love becausethey've you know, they've missed
out, they're feeling slightedand they just want to get off
the rat wheel and get into theproperty market, which is
obviously a major risk.
(08:44):
I wanted to ask a bit of aquestion of you on this topic.
Given that the financialenvironment is quite tough,
let's say, compared to two orthree years ago, interest rates
are high and borrowing power isdown do you think that there's a
scenario at the moment wherelots of buyers who would ideally
like to buy are just quitegenuinely financed out from
(09:05):
being able to purchase wherethey need to?
Speaker 1 (09:07):
Oh, their budgets are .
Yeah, their budgets are capped.
The banks have been prettytough on that point and it felt
like they got tougher on it latelast year.
That's right.
Speaker 3 (09:16):
Okay.
So do you think that, as aresult of that and I know we
touched on this previously, butdo you think we've reached a bit
of a point where, actually, theprices are above, where the
generalised borrowing power is,where people just can't
physically come up anymorebecause the banks aren't
allowing them to?
Speaker 1 (09:33):
Well, you're talking about locals there, but there's
a lot of people that buy realestate in Sydney, for example,
that earn US dollars, so they'vecopped a pretty substantial pay
rise in the last 12 months.
As an example, there's expatsthat are working overseas, that
are buying remotely their firstAustralian property so that they
(09:55):
can come back to it, andwhether they're even against the
pound.
Now the Aussie dollars dropped10 percent against the you know,
the against the english pound.
Um, so that's a big issue where, yeah, the local buyers who are
an essential worker, forexample, with largely a fixed
income, trying to buy you know acertain type of property and
(10:17):
saying, well, based on what theproperties I want to buy sell
for and what the banks will lendme, I can no longer.
I and my social group can nolonger afford to buy such a
property, but they keep sellingthem.
Who's buying these sorts ofproperties?
It's baby boomers downsizing.
It's expats pumping money backhome.
It's internationals that arearriving here with you know,
(10:41):
know, the Singapore dollar is$1.16 against the Aussie.
I remember going to Singaporeon 85 cents yeah you know.
so if you're if you're workingin Singapore, for example, at
the moment and earning a goodpay packet Australian property's
fallen in value in your eyes.
Domain said that the inner westdropped 5% in the last quarter
(11:04):
of last year.
So if you're earning a currencythat's going up against the
Aussie dollar and you're buyingin the inner west that dropped
5% last quarter, it's an evenbigger drop for you.
You don't have the same viewabout Sydney property that
you've just articulated.
These are all the dynamics, andexciting dynamics that make a
market go round.
Speaker 3 (11:24):
Yeah, look, absolutely Really interesting
topic, peter.
As a final wrap-up, then, Iwanted to get your thoughts just
for our buyers out there thatare listening, that are in that
category.
You know they're local buyers,they're fixed income workers,
whether that's essentialservices, teachers, whatever it
might be.
For those people that arehaving now to consider
alternative locations for wherethey should buy, but obviously
(11:50):
have, you know, work commitmentsor school or whatever it might
be, in different locations, whatdo you think is one?
You know one or two kind offeatures or assets or, I guess,
elements of a location thatwould be a good consideration
for someone that's having toshift their focus away.
Let's say, uh, you know,arbitrarily, someone's always
considered the inner west iswhere they want to be and that's
where the social circle was,but now, because of dynamics and
(12:11):
whatever else, they're havingto go further afield.
What are the key things thatthey should be looking for?
Uh, in a suburb, do you think,to make it reasonably good value
long term?
Speaker 1 (12:20):
uh, to justify, I guess, the the move yeah, look,
um, as best you can it's not aseasy as said than done but as
best you can avoid genericproduct um, try, try and get
something.
Try and get something, uh,unique or special.
I don't want to flat out saybuy a house over an apartment,
(12:41):
because that rules outtownhouses, which offer great
value for money in comparison tohouses in a lot of suburbs, and
not everyone can afford a house, even if they downgrade their
suburb.
But if you are buying anapartment, try and buy an
apartment with a unique orredeeming feature, whether it's
an art deco apartment of whichthey're not building anymore's
(13:01):
say, an apartment in a goodlocation that has parking where
other apartments might not haveparking, for an example, a never
to be built out view, forexample.
You know, be really, reallycareful which I know buyers are
doing at the moment with buildquality and strata issues.
You know that you may finallysecure yourself a property and
(13:27):
the dream home becomes thenightmare scenario as strata
issues take hold and buildissues and water ingress and all
those sorts of horrible issuesthat everyone's hearing about
the city you city overwhelm yourpurchase.
So that's in terms of long-termviability.
There's some things there tokeep you in mind, but keep in
(13:48):
mind that even if you buy in anice suburb, the dream home can
easily become a nightmaremortgage if you overextend
yourself.
Absolutely yeah, and I have nodoubt I don't speak with any
specifics here, but I have nodoubt, for example, kieran, that
there would be I'm not saying alot, but there'd be people in
the eastern suburbs of Sydneythat are suffering severe
(14:10):
mortgage stress at the moment.
Speaker 3 (14:12):
I absolutely guaranteed.
Speaker 1 (14:15):
I, you know, anecdotally, had a conversation
with someone in banking in, I'mgoing to say slightly inner west
, but you know slightly west,inner west, who said that, based
on the sales price out thereand the mortgage values, they
know for a fact that a hugeproportion of people are begging
, borrowing and stealing fromfamily and friends to stay
(14:35):
afloat because they need reliefand they've overextended
massively to get into the market, so they're probably earning
phenomenal incomes, but and Idon't take any joy out of
hearing that anyone is undermortgage stress I have great
empathy for people that are inthat situation because they've
bought in 2021 with a mortgagerate of 2% and the RBA governor
(14:58):
of the day saying, hey, interestrates won't even move for the
next three years and all they'vecopped in the last three years
is rate hikes.
Anyone who's in that situationhas every right to be aggrieved.
Speaker 3 (15:11):
I feel like you're talking to me, Peter.
Speaker 1 (15:13):
Well, I'm probably talking to a lot of people.
That's the point, right.
So when you're saying, whereshould I buy?
Well, I think the best propertyis the one you can afford,
first and foremost.
The next best property is onethat doesn't have structural
building issues.
If it's an apartment and samefor a house, for that matter
(15:33):
Then the third criteria that youshould be looking for is
something redeeming or appealingabout it that will be appealing
and redeeming about thatproperty in 20 years time.
So when you're purchasing aproperty, you ask yourself
hypothetically if I do own thisproperty in 2045, how will it
(15:53):
have performed in the last 20years?
Speaker 3 (15:56):
Yeah, I think that's a really good point of view,
peter, and you know if I couldmake a final comment, it's.
You know, emotion is importantwhen looking at property, most
certainly, but you have tounderstand that something that's
emotional to you may not be tothe next person that needs to
buy it from you.
So you've got to make sure youuse your brains and your wits as
well to buy something as yousay, with a redeeming quality
that will still be there to thenext family or the next
(16:19):
businessman, or the nextdownsizer or whatever it might
be.
Speaker 1 (16:21):
Well said, well said.
Speaker 3 (16:24):
As always, Peter, look really great topic and I
certainly hope there's somebuyers out there that gain some
value from this and can use itto get themselves into the
property market.
Thanks so much for coming in.
Thanks, Kieran, and thanks toeveryone for listening to
Current Market Insights.
We look forward to speakingwith you next time.
Speaker 2 (16:41):
Thanks for joining us on the Current Market Insights
podcast brought to you by HarrisPartners Real Estate, the
podcast providing real estateinsights you won't find anywhere
else.
All down, all silent, going, going, going, go on son
Congratulations.
Speaker 2 (00:07):
Welcome to the Current Market Insights podcast
brought to you by HarrisPartners Real Estate.
Each episode we chat with realestate author and industry
leader, peter O'Malley, todiscuss the current property
market conditions and provideinsights to assist you on your
property journey.
Speaker 3 (00:29):
Hello and welcome to another edition of Current
Market Insights.
I'm your host, kieran O'Brien,and with me, as every other week
, is Mr Peter O'Malley.
Peter, hello.
Speaker 1 (00:37):
Hi, kieran, great to be with you.
Speaker 3 (00:38):
Always great to be with you, peter.
I want to chat to you this weekabout buyers.
I think it's my favourite topic, to be honest, in all the
things we talk about, I lovehelping buyers where we can,
because I know you certainlyhelped me when I was buying my
place some time ago.
Last week we spoke a lot aboutwhat's happening in the market,
the uncertainty around interestrates, et cetera, and one of the
(01:00):
things that we did talk aboutwas the auction clearance rate
and the overall sales volumesand also the types of buyers
that were in the market at themoment.
And for the first time, I think,since we've started the podcast
, you talked about a differenttype of buyer.
You know you always mention themore traditional ones.
You know the young family, thefirst home buyers, the investors
(01:21):
, etc.
But last week you talked aboutwhat you know, the person you
labeled as the indifferent buyer, and I thought, off the back of
that, it might be a goodopportunity to talk about for
buyers that are indifferent.
Perhaps they're just new or,you know, inexperienced in the
market, people who have beentrying to buy for a little while
but can't, etc.
(01:41):
Etc.
To buy for a little while butcan't, et cetera, et cetera.
What is the best approach andwhat tools and advice can you
provide to any buyer out thereto make sure that they can make
a decision about what is theright property for them and then
act accordingly, so as not toeither miss out or make a pretty
horrible error?
Speaker 1 (02:00):
Well, the more you want something, the less likely
you are to be prepared to missit, right.
Speaker 3 (02:08):
Oh, exactly.
Speaker 1 (02:08):
So everyone knows the old adage about negotiation the
power rests with the personthat's prepared to walk away.
Yeah, when we spoke last weekabout the indifferent or the
discretionary buyer, that wassomething that we've seen in the
new year.
Where prices are, they're offtheir peak, but they're still
very high in sydney, right?
(02:29):
Yeah, of course, they're 40, 40, 50 percent above any other
capital city in australia.
Yes, interest rate cuts, uh,you know, are coming this year.
Um, but are they going to be?
You know, are they going to cutso deeply that they're going to
stimulate the housing market?
Probably not.
Vendors are asking for pricesin many instances, that they
(02:54):
paid in 2021, when mortgagerates were two percent or 2.2
percent or 1.99, and buyers whoare having to pay a mortgage
rate of around 6% are sayingthat's not quite worth it for me
.
Speaker 3 (03:08):
No, thank you, sir.
Yeah.
Speaker 1 (03:10):
Thanks for the opportunity, but no thanks.
So these are the dynamics inthe current property market and
that's why stock levels willplay such a big role in how the
market performs in the next sixmonths, because the less stock
that's on the market, the morethe vendors can say to the
buyers well, if you don't buythis, what are you going to buy?
And the more stock that is onthe market, the more the buyers
(03:34):
can say to the vendors and thevendors agent that's my offer
and if you don't want it, I'llbuy the one down the down the
road or around the corner.
Very simplistic description ofthe property market, kieran, but
that's essentially how itoperates in the short term.
Speaker 3 (03:50):
Okay.
So with that in mind, thebuyers, you know at the moment,
as you're suggesting, they mayactually be in a pretty good
position because, you know, asnumbers do start to rise in
terms of listing volume, theyhave that flexibility and, in
some ways, that time to be ableto actually step through and
make a logical, reasoneddecision about a purchase.
(04:11):
One of the things you'vewritten about in the past and
you know on this topic is thatbuyers in some circumstances can
end up getting frustrated withthe property market and the
property process and, as aresult, just lash out and buy
something so they can either getonto the ladder or just.
You know, I hear people say allthe time I'm so thankful I
(04:31):
never have to go to another openhome.
You know, just avoid the cycle,given that the market is a bit
uncertain at the moment thosetraditional barriers, I guess,
or mistakes that buyers make,would you say that they're maybe
not as huge an issue at themoment as they could be or have
been.
Speaker 1 (04:48):
I think there's always buyers in every market
that are frustrated and fed upand then buy a property nearly
out of spite or nearly out of adesire to just finish off the
process.
And they'll often do it havingjust missed out on a property
that they believe they shouldhave purchased, whether the
agent underquoted and theymissed out on it on the day
(05:08):
because they didn't think itwould go that high, or someone
pipped them at the post, orthey're playing real estate
poker with the real estate agentsaying, well, I don't reckon
they do have another buyer, soI'm not going to increase my
offer.
And then, before they know it,they've been told the property
sold.
And then all of that combinesto make them a frustrated and
fed up buyer with the processand they go out and buy either
(05:30):
the wrong property or the rightproperty at too high a price.
Speaker 3 (05:35):
Yeah, I must admit I saw, pardon me, I saw just last
week some commentary online froma person who'd said exactly
that.
Actually we you know thenegotiating with the agent over
the property we loved.
It told us there was anotherbuyer.
We thought he was bluffing, thewhole process is a sham, etc.
Etc.
Only to find out 24 hours laterwe'd missed the property.
(05:55):
And now we're heartbroken.
What do we do?
And all the advice was well, ifyou find the right one, you
should buy it.
So, given that's the commentaryonline from a bunch of non-real
estate strangers, do you thinkthat's a reasonable bit of
advice that if you are a buyer,irregardless of market, if you
find the property that you thinkis perfect for what you need at
that time and that place, thatit's worth just taking action?
Speaker 1 (06:18):
Yeah, if you are a buyer.
So let's go back when you saidthat buyers have kind of got the
advantage out there at themoment.
They do in some markets andthey do in some niches of the
market, if you like.
There are people who are buyingat the moment, who are buying
at the moment, who are listeningat the moment and buying at the
moment, that will hear thisdiscussion that we're having and
(06:38):
then they'll try to buy aproperty on the weekend and
they'll find themselves in amulti-buyer situation.
So even in a flat market, goodproperties still attract good
number of buyers.
Even in a booming market, poorproperties can still sit on the
market for a long time to findthe right buyer.
(06:59):
So whilst we're giving genericadvice here that the auction
clearance rate is stubbornlystuck below 50% in Sydney and
has been for quite some time,that's just generic or broad,
broad based assessment of howthe market's going.
You as a buyer need to know howthe market is performing in
your price category.
(07:19):
If you are one of thosediscretionary buyers that will
move for the right property atthe right price at the right
time, all kudos to you for beingin that situation, because the
hardest thing to negotiateagainst.
Whether you're selling cars,houses, computers or or holiday
packages is the indifferentbuyer.
I'll only buy if it's good andcompelling value.
(07:43):
So a lot of agent, a lot ofbuyers aim to project that
persona to real estate agentsbut can't quite pull it off
because they're actuallyemotionally engaged in a subject
property and they're saying wedon't care if we miss it.
Similar to your internetexample.
There we called the agentsbluff.
We don't think there is anotherbuyer.
Oops, there was another buyer.
(08:04):
Furthermore, the property sold.
Now we've missed out on thehome of our dreams.
Whatever can we do?
Well, the only answer there isdon't, don't, don't play.
You know, don't, don't playthat game on the next property,
which might come up nextSaturday or might not come up
until 2026 yeah, certainly.
Speaker 3 (08:22):
Uh, well, that that's the perfect example, I think,
of where, potentially, as peryour experiences and what you've
written about in the past,those buyers could go out next
week in a flurry of anger andpurchase an apartment that they
don't really love becausethey've you know, they've missed
out, they're feeling slightedand they just want to get off
the rat wheel and get into theproperty market, which is
obviously a major risk.
(08:44):
I wanted to ask a bit of aquestion of you on this topic.
Given that the financialenvironment is quite tough,
let's say, compared to two orthree years ago, interest rates
are high and borrowing power isdown do you think that there's a
scenario at the moment wherelots of buyers who would ideally
like to buy are just quitegenuinely financed out from
(09:05):
being able to purchase wherethey need to?
Speaker 1 (09:07):
Oh, their budgets are .
Yeah, their budgets are capped.
The banks have been prettytough on that point and it felt
like they got tougher on it latelast year.
That's right.
Speaker 3 (09:16):
Okay.
So do you think that, as aresult of that and I know we
touched on this previously, butdo you think we've reached a bit
of a point where, actually, theprices are above, where the
generalised borrowing power is,where people just can't
physically come up anymorebecause the banks aren't
allowing them to?
Speaker 1 (09:33):
Well, you're talking about locals there, but there's
a lot of people that buy realestate in Sydney, for example,
that earn US dollars, so they'vecopped a pretty substantial pay
rise in the last 12 months.
As an example, there's expatsthat are working overseas, that
are buying remotely their firstAustralian property so that they
(09:55):
can come back to it, andwhether they're even against the
pound.
Now the Aussie dollars dropped10 percent against the you know,
the against the english pound.
Um, so that's a big issue where, yeah, the local buyers who are
an essential worker, forexample, with largely a fixed
income, trying to buy you know acertain type of property and
(10:17):
saying, well, based on what theproperties I want to buy sell
for and what the banks will lendme, I can no longer.
I and my social group can nolonger afford to buy such a
property, but they keep sellingthem.
Who's buying these sorts ofproperties?
It's baby boomers downsizing.
It's expats pumping money backhome.
It's internationals that arearriving here with you know,
(10:41):
know, the Singapore dollar is$1.16 against the Aussie.
I remember going to Singaporeon 85 cents yeah you know.
so if you're if you're workingin Singapore, for example, at
the moment and earning a goodpay packet Australian property's
fallen in value in your eyes.
Domain said that the inner westdropped 5% in the last quarter
(11:04):
of last year.
So if you're earning a currencythat's going up against the
Aussie dollar and you're buyingin the inner west that dropped
5% last quarter, it's an evenbigger drop for you.
You don't have the same viewabout Sydney property that
you've just articulated.
These are all the dynamics, andexciting dynamics that make a
market go round.
Speaker 3 (11:24):
Yeah, look, absolutely Really interesting
topic, peter.
As a final wrap-up, then, Iwanted to get your thoughts just
for our buyers out there thatare listening, that are in that
category.
You know they're local buyers,they're fixed income workers,
whether that's essentialservices, teachers, whatever it
might be.
For those people that arehaving now to consider
alternative locations for wherethey should buy, but obviously
(11:50):
have, you know, work commitmentsor school or whatever it might
be, in different locations, whatdo you think is one?
You know one or two kind offeatures or assets or, I guess,
elements of a location thatwould be a good consideration
for someone that's having toshift their focus away.
Let's say, uh, you know,arbitrarily, someone's always
considered the inner west iswhere they want to be and that's
where the social circle was,but now, because of dynamics and
(12:11):
whatever else, they're havingto go further afield.
What are the key things thatthey should be looking for?
Uh, in a suburb, do you think,to make it reasonably good value
long term?
Speaker 1 (12:20):
uh, to justify, I guess, the the move yeah, look,
um, as best you can it's not aseasy as said than done but as
best you can avoid genericproduct um, try, try and get
something.
Try and get something, uh,unique or special.
I don't want to flat out saybuy a house over an apartment,
(12:41):
because that rules outtownhouses, which offer great
value for money in comparison tohouses in a lot of suburbs, and
not everyone can afford a house, even if they downgrade their
suburb.
But if you are buying anapartment, try and buy an
apartment with a unique orredeeming feature, whether it's
an art deco apartment of whichthey're not building anymore's
(13:01):
say, an apartment in a goodlocation that has parking where
other apartments might not haveparking, for an example, a never
to be built out view, forexample.
You know, be really, reallycareful which I know buyers are
doing at the moment with buildquality and strata issues.
You know that you may finallysecure yourself a property and
(13:27):
the dream home becomes thenightmare scenario as strata
issues take hold and buildissues and water ingress and all
those sorts of horrible issuesthat everyone's hearing about
the city you city overwhelm yourpurchase.
So that's in terms of long-termviability.
There's some things there tokeep you in mind, but keep in
(13:48):
mind that even if you buy in anice suburb, the dream home can
easily become a nightmaremortgage if you overextend
yourself.
Absolutely yeah, and I have nodoubt I don't speak with any
specifics here, but I have nodoubt, for example, kieran, that
there would be I'm not saying alot, but there'd be people in
the eastern suburbs of Sydneythat are suffering severe
(14:10):
mortgage stress at the moment.
Speaker 3 (14:12):
I absolutely guaranteed.
Speaker 1 (14:15):
I, you know, anecdotally, had a conversation
with someone in banking in, I'mgoing to say slightly inner west
, but you know slightly west,inner west, who said that, based
on the sales price out thereand the mortgage values, they
know for a fact that a hugeproportion of people are begging
, borrowing and stealing fromfamily and friends to stay
(14:35):
afloat because they need reliefand they've overextended
massively to get into the market, so they're probably earning
phenomenal incomes, but and Idon't take any joy out of
hearing that anyone is undermortgage stress I have great
empathy for people that are inthat situation because they've
bought in 2021 with a mortgagerate of 2% and the RBA governor
(14:58):
of the day saying, hey, interestrates won't even move for the
next three years and all they'vecopped in the last three years
is rate hikes.
Anyone who's in that situationhas every right to be aggrieved.
Speaker 3 (15:11):
I feel like you're talking to me, Peter.
Speaker 1 (15:13):
Well, I'm probably talking to a lot of people.
That's the point, right.
So when you're saying, whereshould I buy?
Well, I think the best propertyis the one you can afford,
first and foremost.
The next best property is onethat doesn't have structural
building issues.
If it's an apartment and samefor a house, for that matter
(15:33):
Then the third criteria that youshould be looking for is
something redeeming or appealingabout it that will be appealing
and redeeming about thatproperty in 20 years time.
So when you're purchasing aproperty, you ask yourself
hypothetically if I do own thisproperty in 2045, how will it
(15:53):
have performed in the last 20years?
Speaker 3 (15:56):
Yeah, I think that's a really good point of view,
peter, and you know if I couldmake a final comment, it's.
You know, emotion is importantwhen looking at property, most
certainly, but you have tounderstand that something that's
emotional to you may not be tothe next person that needs to
buy it from you.
So you've got to make sure youuse your brains and your wits as
well to buy something as yousay, with a redeeming quality
that will still be there to thenext family or the next
(16:19):
businessman, or the nextdownsizer or whatever it might
be.
Speaker 1 (16:21):
Well said, well said.
Speaker 3 (16:24):
As always, Peter, look really great topic and I
certainly hope there's somebuyers out there that gain some
value from this and can use itto get themselves into the
property market.
Thanks so much for coming in.
Thanks, Kieran, and thanks toeveryone for listening to
Current Market Insights.
We look forward to speakingwith you next time.
Speaker 2 (16:41):
Thanks for joining us on the Current Market Insights
podcast brought to you by HarrisPartners Real Estate, the
podcast providing real estateinsights you won't find anywhere
else.
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