Worst Auction Day in 30 Years 🗞️ Real Estate Market Wrap

Not a single buyer today!

02:17 – If we have a rate rise in August and more stock in Spring…
03:41 – Property prices have already dropped 20% in some marketplaces
06:20 - How the volumes are affecting agents

My Clearance Rate: 0/6 SOLD

Transcript

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Tom Panos 0:00

Today was the worst auction day of my real estate auction career. I've been doing auctions for 30 years. Today was the worst. Zero out of six. But that's not the metric that's going to concern you. I'll tell you what the metric that's going to concern you. I didn't have a single person register to bid. Do you understand? Not one registration, not one person even said to themselves, you know what? There's a few bargains out there. I might go in and just see what's actually happening. And not even put your hand up, but no one registered. I've never ever had that. So all I can say to you is God help us on August 11. We definitely do not need a rate rise in the real estate market, but I'm beginning to think that I agree with 40% of the current economists that have factored in a rate rise in August. And even if it doesn't happen, it's going to be happening most likely in September. Because what's becoming very, very clear is that the relationship now between the RBA and the government is really irrelevant. They'll do their thing and the Australian Labour Party will keep doing their thing on their beautiful three-day conference, which I think concludes today, which I've been told, though it's not confirmed, that one of the things that's being socialled at that conference, it's being socialized. A tax, an inheritance tax, it's being socialized. But it does not surprise me because at the moment we're in a government that is purely in um the state collecting cash and then redist redistributing that cash in the way that they want, and one of the ways is to themselves. Anyway, I've got to say to you that uh if we do have a rate rise in August and we do have more stock coming up in spring, there should be a further softening of prices. What does this basically mean now for people that are listening to this? If you're someone that does not have to sell, let's assume you don't have to sell your property and you're thinking about putting it on the market and you're planning not to rebuy in the same market and there is no financial stress for you and you can hold it for a couple of years, don't go on the market. You're not gonna get the number that you want. Alternatively, if you are someone that is thinking of selling because you feel that you're gonna have to, and it's driven from financial reasons, man, I've got to say to you that you probably should sell because at the moment I want you to picture basically, it's like the penthouse apartment since May is coming down a floor each week, and you've got to work out do I get out on the 70th floor, do I get out on the 50th floor? But that that lift is coming down. So if you feel like you're gonna have to have financial pressure in the near future, I would sell because there's a possibility things are gonna get worse before they get better, and the reason they're gonna get worse before they get better is that we will have the increased stock in spring, we will have rate rises, and that's gonna basically mean that the demand and supply equation is gonna help it even more in the buyer's market. Now, here's the irony when you go off and look at property prices. Man, I don't know where this media is getting their data from. They're talking about we may have the biggest correction ever. Read it today. I think it's in news.com. Tipped to have the biggest correction in the history of Australia at 8%. I couldn't believe that article. The property price are gonna drop 8%. They've dropped 20% in some marketplaces. Are you serious? You go out into the eastern suburbs of Sydney, they've dropped 20%. In fact, let me just sum up at a high level what do real estate values look like around in terms of price corrections. The highest marketplaces, the prestige marketplaces, tanking, tanking, 20% drops. Then we go into the middle price point, they're probably around 10%, and then you look at the first home buyer price point, and you know what you're seeing there? I'll tell you what you're seeing there. You're not seeing price drops, you're actually seeing a pretty robust market. So I don't know how Dr. Chalmers, who did that PhD degree on Paul Keating, where I am right now in Bankstown, this is where Paul Keating's from. I'm not quite sure what mark Chalmers got in that PhD. I really don't know. Because I can tell you this guy somehow, with his team at Treasury, was able to drop the whole real estate market, except the only market we wanted to drop to allow people to buy a home to make it more affordable. The lower price point is not dropped, they're stronger. First home buyers, it's not got easier for them. You know who the winners are. That landlord that saw me this morning at the cafe that told me he was over the moon, he just rented out a property for $4,000 a week. That's $16,000 a month. The winners are landlords. And you're talking about intergenerational wealth? I've got to say to get zero registrations is a clear sign. Like to get zero out of six is a clear sign. But to get zero registrations, it essentially has said the appetite for real estate is gone, and the only people that seem to be transacting are the must-have people, they're the ones. Now I've got to tell you, don't worry about real estate agents. Oh, I'll tell you what, they're getting smashed. Why? Because the volumes anecdotally are down nearly 40% last couple of months. I'm waiting for the data to come out on that because I can tell you prices don't worry me anywhere near as much what volume does. You know what volume does? Volume actually impacts people dramatically. It impacts people that are working in those services, removalists, renovators, lawyers, conveyances, furniture places. But I tell you, who gets impacted the most? Think about it. 25% of our state government's revenue comes from stamp duty. Think about that for a moment. A quarter of their money. Were they not thinking about that at Treasury? Were they not thinking to themselves, we can do all these changes, but what are the unintended consequences? Well, one of it is 25% of state government's revenues have just been smashed. Smashed. I just can't wait till those numbers come up to see what has actually happened. Ladies and gentlemen, I'm letting you know. Let's not sugarcoat this. Australia's entering into new territory and very scary territory.