Forget one big bubble: we're a nation of micromarkets

Forget one big bubble: we're a nation of micromarkets
Forget one big bubble: we're a nation of micromarkets

Guest observation

Property media in Australia can be confusing at the best of times. But in August, it was contradictory madness.

"Jump aboard as prices continue to rise," trumpeted local commentators. "Your crash is coming," overseas experts chimed in.

"Beware Australia's housing bubble," cried the Reserve Bank. Treasurer Joe Hockey then dismissed that idea. Next, the Reserve Bank said prices were "not a crisis" before sending "warnings" of an "inflated market" with potential for, yep, "bubbles".

So our dinner tables are now places of effervescent debate. Property is becoming notorious enough to be off-limits alongside sex, religion and politics. With each contradictory headline, prejudices burn on both sides of the fence. Everyone's an expert.

Yet if we focus more on what's happening in our own "micro markets", we often have all the answers.

Supply and demand drives price, so forget looking at Australia as a whole. We need to see the market in specific price brackets, geographies and lifestyles.

Forget one big bubble: we're a nation of micromarkets

Sydney's art deco coastal belt - a micro market of its own. (Image supplied)

When buying, we don't view Australia as one market. We don't even see Sydney as one. And postcodes don't dictate precise boundaries for residents. People see a certain way of life, delivered by a similar category of home, across a variety of suburbs that cater to a specific lifestyle.

Think student belts from Kensington to Camperdown. Think brand new apartments from Bondi Junction to Chippendale. Think luxury homes around waterfronts. Think 3-bedroom inner-city terraces around $1.2 million.

They're just 4 different micro markets, moving independently of each other. And there's plenty more, each with their own lifestyle and buyer profile of residents wanting the same home.

As bubble chatter continues, some of these homes have boomed in value, while some prices have dropped. Certain rents have skyrocketed. Other landlords have slashed prices.

Luxury houses in prestige streets of Woollahra and Point Piper make another micro market. Prices in these pockets are down from levels seen three years ago. Try telling those owners we're in a "property boom". Yet that's what these stories keep beating up.

Forget one big bubble: we're a nation of micromarkets

Not booming: This home in Jersey Rd, Woollahra sold in 2008 for $2.2 million. It recently sold for the same money in 2014.

As savvy buyers and sellers, it makes sense to hone in on these mini trends, because each micro market performs differently over time. The wider data doesn’t tell us this.

Forget one big bubble: we're a nation of micromarkets

Across in Marrickville, this cottage sold in 2005 for $425,000. With some cosmetic updates, it fetched more than $1 million in 2014.

Residents who understand how their own sector of the market is performing can identify periods of dropping price, growth, and steady phases with no movement.

Existing owners can still capitalise on knowledge of micro markets. As sellers or landlords, the trick is to position our property correctly to capture the most demand.

Then, we can strategise and set objectives. We can make changes, renovate to suit the area, market homes differently, or wait. Understanding what's happening around us can be far more valuable than waiting on interest rate changes or following wider data.

When buying, we shouldn't accept reports that all home categories are hot. If Sydney and Australia is booming, we can still pounce on the ups and downs of the micro markets that suit our needs as buyers.

Even within all this "bubble" and "boom", the best buying/selling can find untapped momentum. We just have to become more in tune with our neighbourhoods.

Shannan Whitney is the chief executive of BresicWhitney Estate Agents.

 

Tags: 
Bubble

Community Discussion

Be the first one to comment on this article
What would you like to say about this project?