WHY IS THE MARKET SO CRAZY RIGHT NOW ?

Its no secret anymore - We are currently in the middle of the BIGGEST most volatile property boom EVER.
I DON’T want to be another agent sensationalizing the current pricing explosion,
So don’t shoot the messenger but the writing is on the wall :

“IF YOU THOUGHT PRICES WERE GOING TO CRASH IN 2021 BECAUSE OF THE CHYNA VIRUS YOU WERE… SO WRONG…”

Market conditions have arguably never been better, What we are seeing right now out there in the trenches is a level of euphoric positive sentiment that compares only to the boom of 2015-16, Old agents are saying “this is the best market is 20 years..” and others are saying its the best market EVER.

I’ll be honest, I’ve never really experienced anything like this before professionally.
Back then during the last “boom” I was still marketing nightclubs and small businesses NOT people’s homes.

I got a little taste of that high time at the start of my career as a Sales Associate but I was not selling actively myself, And it quickly crashed momentously after that.
My career so far has been almost all in a “downmarket”, All pre-crash, Post-crash, Crash-impending; And I’m totally cool with that 😎

I’ve learned to turn bricks in to dollars for people working up-hill with the rain in my face, As opposed to down-hill with the wind in my sails.
My old Sales Manager used to always tell me “Learn how to sell now in this market and one day when it booms again you will be unstoppable..”

HE WAS RIGHT, My February has been EPIC, I’ve almost totally sold out stock already (Nearly 6 months worth of stock)
The best part is EVERYONE SO FAR HAS BEEN A WINNER, Sellers are getting the prices they want or more & Buyers are making stacks of money INSTANTLY after buying.

I’ve actually got clients who deposited on builds with me back in Early February - Who haven’t even exchanged unconditionally yet and the property they are about to purchase is already worth $50,000 - $100,000 more than the price they are yet to exchange on, Seriously !

Why is all this happening, What is there to explain the market BOOMING 10-15% in NW Sydney seemingly overnight ?

💣 I say it started with the following government incentives, Schemes & grants that were put in place in the wake of the pandemic to fire up the economy.

1. First Home Owners Grant - This is the initial and most basic incentive thats been offered for many years albeit it changing in amount from time to time.
   Currently the grant offers $10,000 for people buying their first home as long as their purchase meets the criteria CLICK HERE to visit the revenue NSW site where you can check your eligibility.

2. First Home Buyer Assistance Scheme - This is the the newly created incentive that the government offers to avoid paying stamp duty as a first home buyer or receive a concession on the typical stamp duty amount CLICK HERE for a link to the revenue NSW site where the current eligibility terms are provided.

3. Homebuilder Grant - The latest incentive offered by the NSW government in the wake of the pandemic, Initially proposed to help boost the economy and encourage people to build new homes in NSW.
   This grant as per the revenue NSW website is offered for those who “enter into a contract between these dates to build a new home, substantially renovate an existing home or buy and off the plan home/new home to be eligible for the $15,000 grant“ CLICK HERE to check the revenue NSW website to see if you can secure the benefit of this latest incentive.

4. The First Home Loan Deposit Scheme - Much like the “Homebuilder Grant”, The “First Home Loan Deposit Scheme” is a NEW incentive being offered by the NSW government to help boost the economy through the pandemic. Usually buyers purchasing property with a deposit less than 20% would need to pay “lenders mortgage insurance” (LMI) on top of the property price & stamp duty etc. & that LMI figure could be extremley costly to the buyer typically averaging around 20k.
   Via the “The First Home Loan Deposit Scheme” banks can offer a limited number of buyers the opportunity to take a loan out with them of 80% or more without having to pay LMI saving first home buyers tens of thousands of dollars and also significantly lowering the barrier of entry for those with limited finances.
   CLICK HERE to go to the National Housing Finance & Investment Corporation official website covering eligibility.

The government wanted to quickly and effectively fire up the market and the above incentives worked very well in achieving that.

💣 Then, There’s the massive pent-up demand of nearly 1 whole years worth of buyers who held back during 2020.

If you remember back in early 2020 (pre-covid) we were actually in the early stages of a boom & first home buyers were already pouring in to the market in droves as the terror of the 2017 Royal Commission Crash faded away and confidence returned.

Then suddenly Covid-19 appeared and everyone anxiously recoiled to “see what happens..” Most buyers taking the short odds that any lock down would decimate jobs & the economy with the property prices to follow suit.

What we witnessed was that prices barely budged, Even through a lock down pandemic and a global crisis on a scale we’ve never seen before Sydney property held strong and pretty much just flat lined for the best part of 2020; The thing is ALL those buyers who put their plans to buy back on the shelf and were holding back STILL NEED/WANT to buy a house.

Truth be told they probably saved a stack of cash during their hibernation waiting for the green lights of the media to “get out and buy..” -
And its these people; This stampede of cautious bag holders from 2020 who are now making their presence felt at the auctions and kitchen counters around Sydney CASHED UP and hungrier than ever for property.

💣 We have the lowest interest rates of all time, Cash is CHEAPER than ever right now.

I’d say this one doesn’t need much explaining, Interest rates are lower than ever before.
The RBA cash rate is 0.10% : BASICALLY ZERO-NEGATIVE.
They have done this because they know lowering the interest rates will stimulate borrowing, Which in turn will stimulate spending, and so on and so forth.
Anyone with cash parked in their account is basically earning nothing so instead they will take it out and put it back into the economy - “SIMPLE'S.”

💣 Critical stock depletion across Sydney, Especially in the Entry-Level or First home buyer sector.

Stock levels were already low through 2020 to begin with, With buyers lined up around the outside of the dance floor like wall flowers the market was pretty flat and desolate, No reason for sellers to be enticed to pack up and move on.

I think most people were too pre-occupied with life during a pandemic, And adjusting to work from home etc to consider selling up and moving anywhere.

This means less supply on the market, And when there less of anything around It typically increases in value as per the tenet’s of supply & demand.
What we have seen in the last month or two is that balance start to slide rapidly, The equilibrium was lost - Now Demand FAR outweighs Supply and so value of the asset (in this case houses) has quickly risen.

Is it a good time to buy a house now then ?

Honestly, I don’t know the answer to this question - Its dependent on so many factors like what your immediate and long term goals are, Where you live currently and where you want to be, Your financial status your job status etc.

People ask me every single day now “Is it a good time to buy..”
But what they are really asking me is “Is the market going to come back down or keep going up..”

The answer is We have ZERO clue, Nobody, Not even the Real Estate Agents with boots on the ground can seem to pick it.
EVERYONE seems to get this prediction wrong, EVERY TIME.

I like other Agents do not possess a crystal ball, I cannot be your fortune teller 🔮
Think of your Agent more of Canary in the Coalmine rather than a Prophet -
Listen closely to the Canaries message and act accordingly you may indeed enjoy significant Profit 🐤
And the song I’m singing now is that “The supply will increase eventually and when it does expect it to slow-down loong before it goes down..”
The BOOM is literally happening right now, There’s a wave forming and we all have more then enough time to ride it to our next destination so consider grabbing a board and hang on tight - 2021 is going to be BIG 🌊

Take this all with a grain of Salt - I’m not a financial planner, If you need a good one of those shoot me a message and I’ll send you a number to call.
For now; I’ll leave you again with this perfect quote about the market cycle’s :

“Time In the Market, Usually beats Timing the Market…”