Never been a better time for first-home buyers to take action: Hotspotting’s Terry Ryder

EXPERT OBSERVER

I’ve received an email from someone expressing outrage that I’m (in his mind) encouraging people to buy real estate at a time when everything is on the point of collapse.

He lectured that he and his friends believe doomsday is pending and the smart thing is to do nothing.

I won’t name him to protect the guilty. But I think people like this sad individual are a huge part of the problem.

Here’s why this kind of attitude is both wrong and damaging.

Firstly, he’s reacting to media headlines and not to the reality. He’s not alone but anyone smart enough to read and write should know better than to react to clickbait headlines.

One of the great problems amid the pandemic is that mainstream media does not see itself as part of the solution. Most businesses have a model based on making a living by being useful to consumers. Media in Australia doesn’t exhibit any desire to be helpful to its customers – its business model is to scare the hell out of people every minute of every day. It’s an appalling business model and it explains why so many publications are failing.

Intelligent people see the headlines for what they are – a shallow pitch to induce us to click on things, fed by profile-hungry economists and others who know a sensational negative is a guarantee of free publicity.

The smartest people tune out mainstream media altogether. Idiots take it all literally. They accept nonsense like the mythical September Cliff at face value, because they lack the ability to think independently.

Secondly, he’s a poorly-informed individual who is apparently unaware that around Australia there are local economies which are thriving and people are just getting on with business – and their local property markets are pumping strongly.

A core problem is that so much of our major media emanates from Melbourne and Sydney. Melbourne is a basket case because its Premier and his government mismanaged hotel quarantine and other aspects of the pandemic, while Sydney is struggling in many ways also. Both cities have elements of their property markets where vacancies are high, rents are falling and/or prices are drifting lower.

All of that influences the tone of media coverage. But two-thirds of Australians don’t live in our two biggest cities. Most Australians live in cities and towns largely unaffected by the virus, can go about their business unimpeded and are doing generally okay.

Many local economies are pumping and their property markets are rock solid. The vast majority of locations around Australia have low vacancies and strong rental markets. Buyers are facing strong competition and prices are rising.

Canberra has recorded house price rises in all of the past five months, according to CoreLogic figures, and Adelaide has risen in four of the past five months. Most regional jurisdictions have shown similar strength over the period from March to July.

Of the nation’s 15 market jurisdictions (eight capital cities and seven regional markets), 11 have house prices higher than they were at the start of the year.

If the forecasts of most economists in February-March were correct, prices would have plummeted, collapsed, nosedived and plunged (usually the language beloved by many journalists) everywhere by now.

Thirdly, Australia needs people to get off the fence and take action. It needs people to spend and it needs businesses to move forward with hope in their hearts. That’s what all those government stimulus packages are designed to encourage.

My sense is that most are doing so. I have conversations (phone, zoom, email, text messages) every day with people all over Australia and the great majority of them are bullish, busy and getting on with business. Even Melbourne people are pushing ahead as best they can in the circumstances.

Real estate markets are ticking over and people who service those markets are making money. It’s rare to encounter businesses with a negative mindset.

Fourthly, I believe the future belongs to the people who see this as a time of opportunity.

For businesses, it’s a time to innovate and find ways to do things better. In Melbourne, real estate agencies are finding ways to function while in lockdown and the early figures suggest an auction clearance rate above 70% in the latest weekend.

For first-home buyers, there’s never been a better time to take action. Interest rates are ridiculously low, lenders are competing for their business, and there has never been so much government assistance available. Some are sitting back and whinging that it’s all too hard but large numbers of young Australians are taking advantage of a never-to-be-repeated opportunity. All power to them.

For investors, there are wonderful opportunities to buy well in locations with good prospects for long term growth.

And the most important words in that sentence are “long term”. Those who understand the fundamentals of real estate investment appreciate that short-term scenarios like the pandemic impact are largely irrelevant in the overall scheme of things.

There are, of course, those sorry individuals for whom the glass is half empty. And there are some for whom the glass is completely empty.

I would say to them: You have the right to wallow in misery if that’s your preference, but don’t waste my time with your doomsday philosophy. I’m too busy getting on with it. 

Terry Ryder is the founder of hotspotting.com.au
ryder@hotspotting.com.au
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