The unseen ingredient.
Wednesday 28 Sep 2016
I have often said that property is all about the numbers but it is also about people and increasingly over recent months I think we’ve been seeing something at play in the market that is tricky to accurately report but is playing a very positive and influential role in the results we are seeing.
I’m sure you’ll recognise the key numbers that traditionally come into play in terms of property market influence; postcode, land size, bedrooms, bathrooms, potential income, potential price growth, potential mortgage repayments, and of course the big one….price.
They all come together to determine value and motivate market activity. Or at least they used to. At the moment the numbers are very strong but potential vendors appear unwilling to be motivated by talk of numbers and evidence of market potential.
I think it’s because so much activity is currently taking place behind the scenes. The proportion of off-market sales being negotiated in the current market is significantly higher than I have ever seen it. These are deals being negotiated without taking a property to market so in terms of stats the buzzing sales activity isn’t clearly reported.
More than ever right now the lack of new listings being advertised on real estate platforms doesn’t accurately reflect the number of property sales being negotiated.
So I want to reassure potential vendors. Don’t fall into the trap of believing a perceived lack of activity reflects a flaw in the market, because the opposite is true. Potential vendors should take heart in the fact there is a serious amount of sales activity taking place off-market, driven by the very strong buyer demand that continues to exist in Sydney.
The market is delivering really great returns for those who are prepared to sell. The demand is there. Rates are low so the prospect of continuing market strength and rising value are significant.
And let me say it again. The numbers are great but even those numbers don’t accurately show the whole picture of activity. Off market sales are an unseen ingredient in the mix that are helping the market rise. So don’t overthink it.