While you’ll hear endless market forecasts from media commentators with hidden agendas or data crunchers making predictions from their desks, there’s nothing like hearing real, unbiased feedback from specialists who actually work on the frontline of the property market. Property Portfolio Magazine Editor In Chief, Debra Beck-Mewing, had the exclusive opportunity to discuss the 2020 property market with real estate industry super-star Tom Panos.
PEDIGREE There’s not too many property owners who wouldn’t recognise Tom – either through his extensive print and television work, inspirational podcast series, highly coveted training or his entertaining and successful auctioneering services. Tom has earned his reputation as a skilled and trustworthy specialist during his 30+ year career in the real estate industry, commencing with a fill in job while at university. Loving the work, he decided to stay in the industry and opened his own agency at the age of 22. With the agency breaking sales records, it wasn’t long before Tom was asked to share his knowledge through speaking / training events for real estate agents and he now runs one of the most successful training and professional development businesses in Australia. From a property perspective, Tom walks his talk having built up a significant portfolio over the years. In addition, his auctioneering services are in demand from property owners Australia-wide. Drawing from this knowledge base, outlined below are Tom’s views on the 2020 property market and tips for how buyers can be successful in the months ahead.
VIEW OF 2020
Opportunities – Considering the property market for the next 6-12 months, Tom expects suburbs that experienced a price downturn during the last market contraction – July 2017 through to May 2019 – will see a good bounce upwards. In addition, look for areas that were negatively impacted by infrastructure projects that are now completed. For example, Sydney’s Inner West where a cluster of suburbs were impacted by the WestConnex M4 extension. These suburbs are now surging ahead.
Definitely two speeds – Newly built units are generally lagging behind in price growth. Tom notes the causes emanate from the fact that there is still an over supply along with a stigma for this kind of property with buyers who are concerned about building quality particularly after the Opal and Mascot Towers publicity. In contrast, the market for established / art deco units is very strong and on the increase in line with the general market.
Buyer interest – buyer interest is high and numbers are on the increase. Tom says the difference between pre and post the federal election was stark. Returning from a trip overseas in July 2019 “I couldn’t even get a car park at my auctions but earlier in the year we were only getting a handful of buyers turning up,” said Tom. Activity is still strong with the first weekend of 2020 seeing buyers turn out for inspections in large numbers.
First home buyers (FHBs) – Tom notes there’s more FHBs active in the market, potentially due to the additions to existing government grants in the form of the First Home Loan Deposit Scheme (FHLDS). This is despite the limited number of FHBs who will qualify for the Scheme as there is a cap of 10,000 approvals per year. This activity will provide an upward pressure on property prices at the entry level.
Impact of recent bushfires – will obviously limit market activity in the areas directly impacted for the short term. The good news is that there is such a strong and clear focus on recovery along with the opportunity to rebuild as efficiently as possible.
High level market forecast – based on data analysis, agent discussions and on the assumption that there is at least one more drop in the cash rate.
HOW CAN BUYERS MAKE THE MOST OF THE CURRENT MARKET?
• Understand there is strong competition and factor that into your planning.
• Look at suburbs next to others that have taken off and buy ahead of the upswing.
• Get clarity on what you’re looking for – is it yield, capital growth or a home? Understand that it’s fairly impossible for one property to deliver on multiple aspects so be prepared to be flexible. This means you need to be prepared to accept lower growth if you’re looking for yield or limited yield if looking for good capital growth.
• Match your strategy to your targets and preferences. “For example, when I started out I was really focussed on capital growth. I loved the idea of buying for a lower price and enjoying the growth but I’m now more focused on yield and transitioning my portfolio,” Tom said.
• Don’t try and ‘time’ the market particularly if buying your home – remember property is a long game and a few extra thousand dollars will be irrelevant if it means you can live in your ideal location for many years to come.
• When setting budgets remember to factor in the cost of being out of the market – there’s quite a few buyers now who are regretting sitting on the sidelines during the recent downturn.
TIPS ON DEALING WITH AGENTS
• Understand that agents are increasingly turning to different methods other than just listing properties on the main property portals. Buyers will need to develop a relationship with agents in their area of focus as they may not be seeing 100% of the properties available if they’re relying on the portals alone.
• Buyers should be candid with their targeted agents – this includes providing your budget and property requirements as well as advising that you’re ready and a hot buyer otherwise you’ll be shown the wrong properties.
• Be mindful that in an upward trending market guide prices may be low, so factor this in when assessing whether properties are within your price range.
• Understand that the agent is ultimately working for the vendor and while they will help where they can, you also need to be clear on your market position.
• Be so educated on the market that you can be confident in your pricing, assessing value and opinions of market influences.
• When negotiating, the absolute best strategy is to have a plan B and remember that walking away can be part of the negotiation.
For more information: www.tompanos.com.au and https://realestategym.com.au/ for training and professional development services targeted towards people who believe they can improve all areas of their life.
Also, to get 2020 off to a good start : https:// realestategym.com.au/kickstart-2020/