What does the top end of the market have to do with the rest of us?
If you’re as obsessed with property as I am you might have noticed the steady stream of media stories announcing with incredulous fanfare another premium listing with double digit price tags.
Looking at the pictures is probably as close as most of us can get to an episode of Lifestyles of the Rich and Famous (does anyone else remember that show?). But aside from an opportunity to have a sneak peak at what $20, $30 or $50 million might buy you, are there any similarities between that premium market and the ‘everyday’ property market?
Two things:
One. Price it right. Even at the very pointy end of the market buyers will not overpay. Whilst you might think someone able to drop $30 million on a property would probably be prepared to pay $40 million, you’d be wrong. At the high end of the market, and at the low end, and at all points in the middle buyers will pay only what they consider to be the realistic value of a property. And all buyers will always be looking to make a deal!
Two. You’re not just selling a property. In real estate today you’re selling a lifestyle so the little extras can make a big difference and your marketing photos are vital. Those with big budgets will be looking for a wine cellar, parking for several cars and perhaps accommodation for staff. Families with more modest amounts to spend will want off street parking, a playground nearby and a great laundry to store wet clothes and muddy boots.
Both are simple, relatively obvious points, but they matter. They are as important to remember for vendors hoping for a $50 million return as those hoping for $500,000.
Records
I’ve been watching the Winter Olympics. Lots of sport I’ve never heard of, rules I have no hope of understanding but skills I find amazing. And then there are the records! There seem to be records for everything and anything these days, real estate included.
At the Winter Olympics there have been record times in speed skating, scores in the ice dancing, and even an age record with the oldest ever winner of a Gold Medal awarded this week. In the property market the records are clearance rates, interest rates, listing rates and prices.
It makes me wonder. Does the focus on the pursuit and glory of a 'record' dilute the value of achievements where a record is not set or broken?
In the school playground there has been a backlash against the practice of ‘every child gets a ribbon’, claiming it devalues the lessons of competition and creates an unrealistic expectation that everyone is a winner.
I think property records can be interesting, but they're really quite irrelevant because it is true that not everyone is a winner.
Think about it for a moment. A record price achieved in a particular street or suburb does not automatically mean the same result can be expected for every property. It is an indication of what could be achieved but it can't be taken as automatic.
Just like Usain Bolt breaking the world record in the 100 metres doesn't make the rest of us faster!
Ewan Morton is managing director of the Sydney based Morton & Morton.
