Desperate buyers make snap decisions on auction day
A first-home buying couple paid $1.1 million for a Leichhardt townhouse without inspecting it until the day of the auction, as evidence emerges of a rash of impulse purchases across parts of Sydney.
"There were three active bidders," McGrath agent Shad Hassen said of the property at 6/165 Allen Street, Leichhardt.
"It sold to a young couple with a baby who were Leichhardt locals.
"They had been renting and I believe they were first-home buyers."
Hassen confirmed the couple, who had been looking for quite a while, were not the only bidders who simply turned up last Saturday and decided they wanted to buy.
"We actually had two active bidders on that property who hadn't inspected the property before the day of the auction," he said.
Another agent, Poh Ling Ee, of Ee Real Estate, had the same experience at the auction of a two-bedroom terrace at 180 Abercrombie Street, Redfern, a week earlier.
"The buyer told me he had never seen the house prior to that day," Ee said.
"He just registered and ended up buying it.
She attributed the impulse purchases to a lack of stock ahead of spring – and buyers simply getting sick of going to auctions and missing out.
Domain Group said there were up to 600 auctions scheduled for Saturday, considerably higher than last weekend's 440.
Heading into spring – the traditionally main selling period for property – auction listings are set to swell. Auction clearance rates exceeding 80 per cent in recent weeks had been encouraging for property sellers,
Belle Property Balmain principal Monique Dower, however, says that once again it looks like being another "late" start to spring.
"We've got no more listings than last year for the month of September and it's very competitive amongst agents so that's a sign that it's hard to get the properties," she said.
"The signs are so strong for it to be so good – it just doesn't make sense."
She says buyers are "really frustrated", though she expects it will become more of a "buyer's market" in November and December.
I’ve been always wondering what triggers that desperation in people?
The usual suspects are quite obvious:
- FOMO
- “rent is dead money”
- wife wants to start a family
- baby-boomer parents/in-laws pushing you to replicate their miserable lives
- pressure of looming exclusion from work colleagues’ inner circles
- drying up friends’ invitations to weekend barbie
Of course the list is long (feel free to add more) and adjusted to individual circumstances.
But the most recent trigger I’ve learned just shocked me (forgive me all for my naivety) – my friends’ 9yo son asked them (actually still keep asking) when they’re going to buy a house (not apartment, but house). When they replied asking why it is so important to him, he said that it’s because all his peers live in houses, what means they are rich and he is not because his parents rent. Mind you, he is in public school not Scots college.
In my experience the more people spend the less effort they put into research, over a certain threshold that is. They might not put much thought into the purchase of a toaster or a coffee table but when it gets to bedroom suites they really shop around. They can spend days or weeks looking through different shops.
Get up to the level of a new car though and you will find the average person has it all worked out in their head before hand. I have known people who spent in excess of $50, 000 on a car just because it was their "Dream car" though when you ask them about its specifications they haven't clue! It was their dream car because they saw one at the school every morning or on a tv show.
Get up to the level of home buying and it gets worse. They have a suburb in mind, a number of bedrooms perhaps, and usually want a nice yard or have some othe vague thing on their checklist. Things such as the construction materials, the lay of he land or its composition (subsidence concerns) rarely enter their brains. They take their lead from the RE industry's standard spruke sheet. Good access to public transport etc. Who cares about that! Show me a suburb of a major city that doesn't have busses running all over it, and outside of peak hour they are empty because everyone drives. I don't know anyone who catches busses nowdays. But it goes in the ads because it's a positive and applies to any crap property that is on the market.
Know anyone who bought a house or unit and actually canvassed the street beforehand to meet the neighbors? I do. And in both cases it was a small fry developer who wanted to sucker up to the people because they were going to do a major demolition and rebuild. " It's going to be our dream home" she gushed while clinging to her husband's hand. 6 months and a lot of disruption to the residents in the street later and the "dream house" has a forsale sign on it.
What was all that about? They canvassed the neighbors and made friends so there would be no complaints to council or the police while construction was happening. These people are dogs but they are a lot smarter than the average home buyer who puts their faith in the Local RE agent.
Shadow was hopelessly wrong about the Gold Bull Market. What else is he wrong about?
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