Coming in Cold.

With interest rates marching back to pre-COVID levels many property buyers have panicked and run for the hills…(presumably waiting to come back when the market warms up). *Therein lies the folly of how many people think.

The notion of deciding not to buy when there are fewer buyers around versus feeling better about buying when everyone else is piling in is absurd.

When you remove emotion and look at markets closely it all starts to make sense. Even before the pandemic was declared the RBA were cutting interest rates, this ‘quantitative easing’ was then accelerated post COVID across the globe in an attempt to avoid a worldwide financial meltdown.

The immediate supply of cheap money coupled with a growing sense that the world wasn’t ending led to a property boom that in many ways was artificial. When prices started rising most of us knew intuitively that it was all a bit crazy but hey we were bored, locked down, happy not to be in a real zombie apocalypse and just went with it.

Now the hangover…..rising inflation, labour shortages, record low unemployment combined with global uncertainty means it makes absolute sense for interest rates to be put back to where they were stat. It’s certainly not time to panic, in fact it’s never time to panic.

This week I am going to stick my neck out and say that in my opinion right now may be a very good time for you to buy. Yep…it’s a big call and yep I expect some push back from the haters but hear me out. We have now had several rate rises and the effects of these will be felt in the next 2-3 months. The moment these real effects trickle through the RBA will change their language signalling a potential pause. This change in narrative just might be the dove with the olive leaf in its mouth (shout out to the biggest biblical reference in a real estate newsletter this week).

The moment the media senses this shift the headlines will be less about doom and gloom and we will hear my least favourite/current chart topping board room saying that ‘green shoots are starting to appear.’

These green shoots will tempt nervous buyers back down from the hills and the rubber will hit the road…sorry but one cliche brings another…if you think hard I’m actually correlating the use of cliches with this week’s theme of the herd like mentality.

If you abandoned your home hunting in the 2020/2021 markets because of the heat, come back where it’s nice and cold.

Until next week,