Property buyer FOMO eases as lockdowns end, more listings hit the market

Fear of missing out among potential property buyers is starting to ease as more homes are listed for sale this spring. But buyers hoping to pick up a bargain might have another think coming, with bullish prices still being achieved for the most sought-after homes.

“That’s [FOMO] definitely settled down, without a doubt,” said Peter Kelaher, director of PK Property Buyer’s agents in Sydney.

“Buyers are fatigued, there’s been a natural attrition in the marketplace.”

He said clear distinctions had emerged between A-grade properties that were “boiling”, B-grade (“simmering”) and C-grade (“lukewarm”), compared to the autumn when buyers were paying a premium even for properties on main roads or with inherent problems.

There had also been a fear of missing out during lockdown when buyers were stuck at home trawling listings websites, but that had shifted as people could now move around and make travel plans, he said.

With buyers distracted from their property search, sellers were keen to sell prior but he expects another tick up in the market from February when buyers return refreshed from the summer break.

OH Property principal buyers agent Henny Stier is seeing a shift in the market, with some buyers keen to get in before Christmas but other auctions drawing only one bidder or passing in. While A-grade homes are selling fast, at very strong prices, she is now receiving emails advertising price adjustments of 5 to 10 per cent for C or D-grade homes.

“People’s salaries haven’t gone up 25 per cent or 30 per cent in a year. The market has, but people’s salaries haven’t,” she said.

“The numbers at open for inspections are much lower. A lot of people have better things to do now on a Saturday.”

Rather than FOMO from buyers, she now sees it from sellers.

“They’re realising, ‘we might have missed the market’. Vendors are usually three months behind everyone else,” she said.

“The agents are telling me they are getting into so many appraisals.”

Michelle May, of the eponymous buyer’s agency, has seen fewer bidders at auctions, but still big results for standout homes. One on the weekend had a guide of $3 million and sold for $4.03 million.

“The craziness has been dampened down somewhat because there is more stock,” she said.

“Obviously, the buyer pool gets a little bit shallower [before Christmas] which is great, instead of 17 registered bidders you have five. With five it’s still going to be a strong auction but the craziness is not going to take hold as much.”

In Melbourne, which exited lockdown more recently, Wakelin Property Advisors director Jarrod McCabe is seeing a few worries about missing out, but not to the same extent as earlier this year.

“From a buyer’s perspective, the first two to three weeks after the lockdown eased things felt very manic and there was a lot of tension and a lot of desperation,” he said.

Now, there are still good results, and often three to five bidders competing per auction, but “it just doesn’t have that manic feel”.

Real Estate Buyers Agents Association of Australia president Cate Bakos said some buyers were frustrated by missing out, but those who had their finances sorted had been finding success over the last month as more listings arrived and choice improved.

But with a backlog of vendors who could not sell in lockdown, many agents were running shorter sales campaigns and were willing to accept prior offers, which were often strong given the hefty buyer competition, she said. Buyers had even been snapping up unloved homes that had lingered on the market.

She warns buyers not to wait for a fall in prices if they’re looking for somewhere to live.

“I’ve watched people sitting on the sidelines for 18 months waiting for that fall,” she said. Prices were expected to drop when the pandemic hit and again when the federal government’s JobKeeper stimulus ended, but a small early dip quickly turned into strong gains.

“If the market did move up, and you could have afforded to buy, you’d feel really silly.”

In Brisbane, which has escaped extended lockdowns, the market is still very buoyant and competitive, Property Zest Buyer’s Agency principal Karen Young said.

“I see a lot of tired, frustrated buyers,” she said.

“They’re either throwing in the towel or they’re throwing in a massive offer to try to secure something.”

With prices still rising, she warned those who do choose to step out they might end up coming back in at the start of next year to face higher prices.

“I don’t think you’re going to be in a better situation financially by waiting.”