90 Marine Terrace Fremantle, WA, 6160

Property Sheep

I popped my head into half a dozen home opens on Saturday and was struck by the relatively lower number of buyers. 

What’s interesting about this is that nothing has fundamentally changed in the property market in the previous 6-months. 

Sure, rates have crept up a small amount and are heading back to what most people who are smarter than me say is closer to ‘normal’ levels, but other than that, nothing serious has changed. 

And, talking about broad, basic economics, if inflation is a concern – the cost of living – then it can’t have hit home yet because I was out on Saturday night and it was business as usual with plenty of money being spent on food and booze. 

Similarly prior to COVID, the economic fundamentals weren’t that bad, even with people returning home there wasn’t a tectonic shift in any major economic factor to cause everyone to get on the property bus. Rates were already less than 3%.

What happened was the press changed its tune, people started obsessing about property and then, literally in the space of a few months, the most important thing that everyone must do is buy a property and then the market shot up. 

For the sake of simplicity, I’m not going to discuss data. I have to bite my tongue when people start BS’ing about stats. What are they talking about specifically, when the property market is hyper-segmented? 

Dwelling type, age of dwelling, dwelling density, underlying land size and type, demographic area, suburb type, suburb specifics, metro, non-metro, school-zone-pull, which part of metro, etc. etc. How can this data be aggregated and remain anything but roughly indicative?

Apples to Apples, the Property Market in Perth came back from where it was in 2013, welcome news to most. For owners, it returned some equity to them, for buyers, it gave them confidence that Perth is secure and everyone piled in. Over the long-term, when hasn’t property been secure?

It’s probably about time I came to the point: People are like sheep. 

If the press says there’s a boom, then there’s a boom, because most people freak out because they don’t want to miss it. 

If the press changes and starts saying shit like “biggest housing drop since the 80’s” then most people freak out because they don’t want to get burned. 

I’ve seen it happen in my time in real estate in London, Melbourne and Perth. 

Look, this might sound overly simplistic, but if you want financial success in your life, do the opposite of what most everyone else is doing. 

Here’s an example question: Do you think you’re going to buy the same ‘apples for apples’  property at a lower price when there’s 20 groups of people at a home open (like 6 months ago) or when there’s 3 groups of people at a home open (like now)? 

In the past two years, most Saturday’s I’ve been on the phone to Clients and they’re asking me if they can increase their pre-approvals because they have to pay more for the property they want because there’s four other people bidding. 

We’re through with that for the time being, for most properties anyway, so if you are motivated to buy a property for investment or to occupy, don’t let yourself get caught up with the herd. It will cost you. 

Thinking and acting differently takes confidence, which comes from awareness, knowledge, intelligence, experience and balls. 

As proof, I started my Mortgage Brokerage in mid 2018 in the midst of gloom, an exodus of brokers leaving the industry and detractors claiming I was ‘nuts’. 

Last financial year we turned over 7.5x what I wrote in my first financial year and we’ll probably do 2.5x our FY22 revenue in FY23. 

If you need ‘a bit of a hand’ (I can’t hold your hand, sorry) I’m available for a quick, 10-minute Phone Consultation where you can bounce your plan off me and I can tell you if you’re on the right track or not. Book your call HERE

Brodie Brown

Professional Mortgage Broker