There is no question that there is an element of FOMO happening in the Sydney market at present.
Many buyers are offering well above asking prices and auction reserves, because they are scared of missing out entirely.
However, there is a major difference between paying market price to secure a property in rising conditions and overpaying to such a degree that it hurts you financially.
One of the reasons for some of the property hysteria that is cropping up from time to time is the paucity of available properties for sale at present.
Across Sydney, total property listings are the lowest they have been since the peak of the most recent boom – plus we have record low interest rates now as well.
On top of these two factors, there is a significant backlog of buyers who stayed on the sidelines last year, waiting and watching to see how our nation handled the pandemic.
Now, they feel much more comfortable moving forward with their plans, plus positive media stories about the future of property prices are motivating them to buy now.
There are literally slim property pickings out there, but as professional buyers’ agents we still have a better shot than most at helping people secure their next home or property investment – it just might not happen next week.
With such a low volume of properties on and off market available, it’s vital that buyers don’t purchase something just because it is the “best worst property” on the market at that point in time.
Their fear of missing out is seeing them make emotional decisions that are unlikely to be financially sound or investment savvy ones, either.
We are working every day to source the best properties for our clients, but they also understand that it could take a while for us to do that because of the undersupply of properties currently for sale.
Of course, the best strategy is always to secure the optimal property for the best price so our clients can achieve their property hopes and dreams.
And, even if that takes a bit more time than is usual, that doesn’t mean they’re having to spend more to make it happen.
Rather, the concept of transacting in the same market is the most important one for anyone drawing on their pool of equity to purchase a home or investment property.
That’s because, in strong market conditions like now, the value of their properties and their equity is also increasing at the same time.
In essence, if properties are worth more, property owners can access more of their equity to put towards their next property, which works to theoretically cancel out the rise in purchase prices we are witnessing.
For those Sydney property owners who have been in the market for a number of years, their capital growth is likely to be significant.
This will underpin their ability to buy – even as some people are throwing money that they don’t actually have around because their fear is stronger than their common sense.