Current Market Insights
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Current Market Insights
Episode 114: Sydney Market Confidence Breaks
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Sydney feels like it has hit a new gear, and not the fun kind. Buyer confidence has slipped hard, open home crowds have thinned out, and auction clearance rates are now printing numbers many people have not seen in years. We sit down and get specific about what that looks like on the ground, from the way buyers are negotiating to the brutal reality of properties that simply cannot find competition, even after price guides move.
We also pull apart what’s driving the hesitation. Interest rate risk is back in focus, with the RBA and inflation sitting over every borrowing decision, while global shocks and supply chain fears add another layer of uncertainty. Then we zoom out and ask the bigger question: if this is a downturn, why hasn’t Sydney property collapsed? We cover the key supports still holding the market up, including high immigration, rapidly rising Sydney rents, the eye watering cost of renovations, and the fact that unemployment remains steady for now.
Finally, we dig into the politics that could reshape the next phase, especially talk of capital gains tax changes aimed at property investors. If investors exit, does that free up homes for owner occupiers, or does it pour fuel on the rental crisis and make saving a deposit even harder? If you’re buying, selling, investing, or renting in Sydney, this conversation connects the dots across housing affordability, tax policy, and real world market behaviour. Subscribe, share this with someone arguing about house prices, and leave us a review with your own read on the Sydney market.
As always if there is a specific topic you would like for us to cover, please reach out and let us know!
Welcome To The Market Wrap
SPEAKER_03Welcome to the common monkey money coming up. Welcome in this related male. We discuss the common company market.
SPEAKER_02Hello and welcome to another edition of Current Market Insights. I'm your host, Kieran O'Brien, and with me is Mr. Peter O'Malley. Peter.
SPEAKER_00Kieran, good afternoon to you.
SPEAKER_02Good afternoon, my friend. Let's uh let's spend today, Peter, catching up on the Sydney property market. It's been a couple of weeks since we did a proper market wrap. And uh, if anything, since we last spoke about the issue and what's happening in the uh the industry and the market more broadly, uh if anything, things have just kind of escalated across the world. It's it's the crazy time. Given everything that's happening, we don't necessarily need to narrow in on you know global specifics, but given everything that is going on, uh I'd love to start the episode by getting just a bit of a timeline and trajectory of how the market's been evolving over the last few weeks since we last spoke. Uh as a selling agent first and foremost, how's it evolving from your perspective? And then let's flip it a little bit and uh I guess try and analyse what that looks like as we move forward now, uh, given we're entering a bit of an uncertain period economically, you know, globally, etc. Uh but to kick it off, over the last say four to six weeks, as a selling agent, how have you seen the Sydney market evolving?
Confidence Drops Week By Week
SPEAKER_00Thanks, Kieran. Look, it's been deteriorating on a weekly basis. Right. So bio confidence um in the property market is shattered.
SPEAKER_02Yeah. So last time we spoke, we had just had a about this topic, we just had a rate rise or a rate rise announced, and you had said, look, at this point, there's no real activity yet, uh, or it's not being felt necessarily outwardly. Might have been felt in the you know people's living rooms, but it wasn't being felt out in the market, you're now saying that the confidence is is shot across the market.
SPEAKER_00Correct. And and and and I'm I'm not um in uh Robertson Caruso on that point. Um agents across the industry are reporting the same thing. Yeah. So there's still buyers out there. Um, but to give you an idea, um, if it was a property that uh in a normal and stable environment might attract an average of eight to ten people per open inspection, that's now down to three or four. Yeah. Uh a property that might only attract three or four per open inspection is down to uh one or none. Yeah, wow.
SPEAKER_02Um which is disheartening as a seller, first and foremost.
SPEAKER_00Uh yes, it is, but if you're looking to buy, there's an ability to transact there. Yeah. Um it's highly ill-advised to purchase a property before selling in this environment. Um, but right through March and into April, we've just seen a dedicated steady decline week on week with the market confidence, there's no doubt.
SPEAKER_02Is there any other element from the seller side that's contributing here? Uh, you know, are we do we have vendors out there that are hanging on to optimistic, you know, pre-Christmas prices, or is this mostly just driven by the buyer confidence side, do you think?
SPEAKER_00I just think um from the buyer side, there's just too much to absorb at the moment. There's been the the Middle East conflict first and foremost. Uh, are we going to run out of petrol as a side effect to that? Um, is the fuel issue going to cause inflation to go to ridiculous levels that cause and force the RBA to increase interest rates accordingly? Will the RBA increase interest rates in May and June, as many suspect? Um is my job safe? Is the economy going to be able to turn over? Um probably probably one of the few things that are that have held at the moment is the stock market. Obviously, it's been a bit volatile, but it's held. Um but there's just too much for buyers to absorb at the moment, and they're voting with their uh their feet at the moment, and they're reluctant to partake in uh in the game. Now, look, this could turn out to be a good buying opportunity. Yeah um as we record today, uh uh Trump and Iran claim that uh they're ready to uh let sips let ships sail through the Strait of Hamoors uh again, and that'll be a good thing if that's if if that holds. So uh um the period we've just uh been in might it might turn out to be a good buying opportunity. Probably not in the short term, but um we have seen, and this uh people have pointed this out to me, including Chad, who uh edits the podcast for us, that he is noticing properties that have sold um for less than the owners paid in the last few weeks. Not widespread, but he's noticed a couple of examples as as we have as agents. So that is going on out there. Now, if you sell um for less than you've paid, um obviously you've got the straight drop on uh what you paid versus what you sell for, but all of your transaction costs are a write-off. Transaction cost to buy and sell or um you know is somewhere in the order of um uh eight, nine percent. Um so if you've got a uh capital loss on top of that, that can be quite expensive.
Is News Driving Buyer Fear
SPEAKER_02Yeah, well, yeah, exactly. I mean, we did uh an episode on this a couple of months ago now where we talked about that that transaction difference, and you know, that 10% below what you paid is suddenly 20% in certain markets with those transaction costs, uh, which is obviously very significant. Um couple of things there. I I'd love to get your thoughts. The you know, we talk about all of the conflict that's going on and how it's impacting by confidence. I'd love to get your opinion on how much of that you think is negative news media versus reality. And, you know, I use the fuel as an example. Uh, looking at, you know, tables, you know, uh looking at the allocation of barrels that we have in the country, et cetera, at the moment, we're at the highest levels that we've had in reserve for like two decades or something like that. Yet the rhetoric around the country is that we're completely out of fuel and we've got no supplies and it's terrible. And I can't help but wonder just how much of the uh negativity and kind of concern that we have in the market more broadly is based on what ifs as opposed to what is currently happening. You know, the negativity that drives engagement is uh in some ways corralling behavior as opposed to being a true reflection of what's actually going on.
SPEAKER_00Yeah, look, it's a it's a great point you touch on, and we'll never really know what the cause of the buyer uh behaviour is until some of these issues start to alleviate themselves. So um if the Strait of Hamoz is open and remains open and ships are sailing through and fuel is moving around again, it'll be a temporary s uh inflation spike and and fuel issue. Um already um the price of oil is coming down over over the weekend now on this news and markets celebrated it overnight. So um if the Middle East conflict is contained, well, that's an issue that's you know essentially off the table, right? Yeah. So if that was the root cause of the uh downturn the market's experienced in the last six weeks, well, it it it begs to reason that the market will bounce back next week, which it won't.
SPEAKER_01Yeah.
SPEAKER_00Um so look, I think it is more fundamental than sentiment based. Um look, I I don't protest to you know to be a uh oil expert by any um by any means, but um what what I have read about it myself is that Australia is reliant more so than nearly every other nation on supply chains. Yeah. So when the supply chains um uh are broken the way they are, um the Northern Hemisphere countries and the self-sufficient countries are sorted. But we um probably because we're optimists at heart as Australians, our our our our fuel um position is highly reliant on global trade and global goodwill and supply chains, and uh that's been seriously under threat in the last six weeks, as we know. So it'll be a very good story for Australia um if if the Middle East conflict is contained. But um regardless of that, um the one that uh we can't get away from is that uh the three rate cuts of 2025 uh are nearly reversed. They certainly will be reversed, all three of them, when the RBA hike in May. And then if they go up in June as well, um that means that interest rates will um in in mid-2026 be higher than what they were in late 2024, which is extraordinary.
SPEAKER_02Oh, look, it certainly is, and it's definitely, you know, as as much as I'm an optimist and I love the idea that the economy will recover and we we won't have to go through this. The government's clearly concerned about it. I mean, only this week, I'm not sure if you've been following the news, but you know, New South Wales nurses got a pay rise, which was terrible in the grand scheme of what they actually deserve, but regardless, they got a pay rise of something at least. And one of the uh arguments the government made for not matching what they were after is that if we paid you what you're worth, then the inflation will be out of control and we can't keep up with that. Um and I must admit I find that incredibly infuriating that you know the government's pinning inflation on essential workforce, which is is clearly not the concern. But it does show, though, that they are concerned that inflation's out of their control at this point and they're not entirely sure what to do. Uh, and as you say, the RBA is very likely to raise from here at least two more times. Hopefully, not any more than that, but only time will tell. The other thing we often talk about when we talk about inflation and we talk about the risk of stagflation is the jobs rate. Um, given it is a bit of an uncertain time, we've got, you know, we're in the midst of uh the the AI revolution of sorts, which is, you know, seemingly going in two directions at once. It's got growth on one side and then resistance at the same time from a large you know percentage of the population. Um, where do you think we're sitting economically? And do you think that the the jobs figures are likely to change, putting us at a an even further risk of deterioration in the economy and then the market more broadly?
Four Forces Holding Prices Up
SPEAKER_00Look, I don't want to forecast out too much because it's not really my role as a real estate agent. And I've always said to people, I'm uh I'm not particularly good at um forecasting the market, I'm very good at reading it. And uh in our in our April newsletter, we we highlighted the things that we're discussing today about the stress and the duress that that's uh facing the market at the moment. But there are there are four points, Kieran, that are supporting the economy and the property market at the moment. Um the first is immigration. Yeah, and um the federal government uh keeps saying to people, we hear you on immigration, we're cutting back. Um we've now got the immigration numbers for January 2026 and they're through the roof. So uh what happens is the government's books, as we all know, when they have an open door policy with immigration the way we do at the moment, the government's books look better but on a per capita basis or individually we're all going backwards. And the government is saying, aren't we doing a good job for you? Look at us growing the economy. Yeah, you're in growth you're growing the economy by importing people, and individually people are going backwards. Um a really interesting one that I saw during the week. You will know uh or may remember from late last year, I said the Sydney rental market is going to rise how much this year?
SPEAKER_02Oh, I think you said between five and ten percent.
SPEAKER_00I said I said clean ten percent. Yeah, right. Yeah. And and um uh people say no, no, it's it there's not there's not another 10% in it'll break affordability. Well, during the week, SQM Research put their numbers out, and in early April rents in Sydney are up 7.4%. Yeah. So 10%'s probably understating it. So it's pretty close. The thing that we've been saying for a long time, well, it's close in in early April. Um the thing that we've been saying to mid-April, but the thing we've been saying to people for years now is the rental crisis is not finishing, it's only starting. Yeah. When you have the government pumping in the immigration numbers that they are and feasibility for new projects has only deteriorated in the last six months, there is absolutely no chance that Chris Mins will get up. There's no chance that Chris Mins will get up on his agenda that he outlined at the start of his term about all of these uh inner city apartments being built.
SPEAKER_02Well, even the big projects he's announced, you know, uh Olympic Park, for example, the 2050 plan. I mean, it's it's a it sure looks great, you know, make a precinct, but it's a 2050 plan. We are in 2026, and 24 years is a very long time to absorb hundreds and hundreds of thousands of extra people coming in per year without the existing infrastructure. It's not, you know, and and as we sit here, I you know, at least from my perspective, I'm I'm not anti-immigration. I'm anti uh immigration without, you know, the facilities to support it. You've got to have jobs, you've got to have places for people to live and work, you've got to have infrastructure to get them around. There has to be things in place which just don't exist. And you can only import positive GDP for so long before, you know, it's a house of cards like the financial crisis in 2008, eventually the bad credits fall over and the whole thing collapses.
SPEAKER_00Yeah, well, look, I did see an interesting um post uh during the week, and it's something that I have been sort of increasingly interested in, and and that is if if our economy did take a big turn or there was a reason for all of the new arrivals into Australia to head back to where they've come from, um, and they just sort of you know toss the keys to this uh heavily mortgaged property they've purchased uh back at the bank and said we're out, and they just sort of slip off into the night. Um we we've we've got our local banks here heavily geared um towards the residential property market with people that have sort of you know don't want to hang around. It was Ireland actually. Someone was talking about um when when the Polish cleared out of Ireland um having pushed property prices up, and um then all at once the the Celtic tiger was over, the economic boom there, and um they all sort of bailed en masse at once and left you know the the local Irish holding the bag. And and and the in the Australian economy is far, far bigger and more diverse than the Irish economy, but it was just it was just a really good point that that is worth raising.
SPEAKER_02Well, I mean, as an economy though, we are so heavily geared into property that it it is a major component of uh of the economy. I mean, realistically, the same thing, even though it's not immigration-based, that the same thing happened in the US with the housing crisis. It got to a point where people just said, oh well, I can't do this, and just threw the keys back at the banks to their 20 or 30 investment properties and walked away.
SPEAKER_00And but that that was uh American banks lending to Americans on non-recourse.
SPEAKER_02Of course. But my point is though, they you know, there are historical examples where the economy uh just has to accept people going, sorry about that, and just walking away as if nothing ever happened and the money just you know it Well the banks wear it. The banks wear it, but that like eventually that flows downhill. You know, the banks absolutely banks don't wear it for long is the point. Yeah, you know.
SPEAKER_00And you know, if the banks topple, they get nationalised, and then that means the taxpayer owes them, and what happens from there? Tax taxes go up, yeah.
SPEAKER_02Well, I mean, that's a good that's a good segue, actually, to talk about tax, because one of the things that's been proposed by the federal government uh is taxation reform.
SPEAKER_00Yeah, I I did want to touch on the forthcoming budget. There was just so there's there's four things I think that are holding the the the the property market up. So why is there not an outright collapse in this environment in property prices? Immigration's one, the rents is two, up 7.4% for the year. Now they're there you can say they're interconnected, which they are, um, but that is uh the the importance of a strong rent or a rising rental market is if a homeowner is in duress and they can't sell their asset for a price they're satisfied with, with rent the rental market performing as strongly as they can, they can get some respite there. And that's really important. This is what we saw in 2022 when interest rates went up really sharply from their COVID lows. These landlords who said, I can't afford to live here, but I don't want to take a bath and sell out for a loss, or go to the rental market until the market recovers, which it slowly but surely did through 2023 to 2025. Um the cost of renovations and repairs is so high that people are saying my two million dollar house might now only be worth 1.8, but I can buy a$2.75 million property for$2.5 million. That sounds like a good trade to me, where I've just had the builder in to renovate my what was a$2 million house and is now$1.8. And the the builder has said that if I want to do the renovation, it's gonna cost$700 or$800. And there's a lot of people that are moving at the moment because the cost of executing the renovations is just too high. And you'll notice a lot of properties if you read the copy, which a lot of people now don't, because buying a property is so visual. But if you read a lot of the copy on properties that are out there at the moment, there's a subtlety with them, and that is selling with a DA approval rather than selling with the DA approval because it's too expensive to build at the moment. So that's uh that's that's uh if you've got to renovate a property at the moment, you'll enjoy good demand because buyers are not looking to do renaws in this environment. And then and then the final one, which is what you touched on a bit earlier, the unemployment rate is steady for April. The figures came out this week. So there's no at the moment, there's no duress as far as jobs go.
Budget Tax Changes Enter The Chat
SPEAKER_02Yeah. Look, I think for for many of those, we we are though reliant on factors that are outside the the property market to hold the property market up, which you know is is really dependent on the government of the day. And a lot of these things that you talk about really do come down to to government decisions. Um I started touching on it earlier, but one of the things that's been proposed by Jim Chalmers in this Labour government is to uh introduce some changes to the capital gains tax as a means of recuperating uh some some extra revenue. Um, given that the government have just temporarily at least halted the excise on fuel to help with cost of living, do you think that uh, you know, firstly the government is likely to try and push ahead with these in the budget? And I say that, you know, with a level of skepticism, given that last time Labour proposed taxation reform to the property market, of course, was the unlosable election where you know Bill Shorten found himself looking for a new job. So I like I truly wonder whether you know they're talking big as a as a measure of just trying to you know pump up everyone's excitement or whether they actually, you know, whether you actually think they will try and make reform here.
SPEAKER_00Uh I think they will. Um so let's go back to um uh Bill Shorten. He he did uh try um uh rebalancing the wealth inequality, which was much narrower then than what it is now. Um I'm not sure it was a need then, but I understand where the government are coming from now, that's for sure. Yeah. Um but he was doing it from opposition. Yeah, of course. And uh he was uh open to the mother of all scare campaigns, and that's what he fell to. Um and um, you know, I I partook in some of that scare campaign because um um I I I just think that uh you can't just pull negative gearing from the marketplace um when property investors uh contribute so much taxation. And yeah, okay, they get a benefit at times through negative gearing. And I'm actually not a fan myself of negative gearing. Um I like positively geared properties because it means money's going into your pocket. Sharing a loss with the tax man, you know, means you're still getting a loss. Yeah. You're just you know, you're just you know, washing some of it off with the tax man, which you know, I like profitable investments that put money into your pocket each month. Um but but notwithstanding um the the the cynic in me and all politicians are you know at the end of the day are essentially the same as you know, Kieran. The cynic in me says that in the budget they will use the fuel excise rebates and the environment we're in as a justification for the tax reform and the higher taxes that property investors are going to have to um to wear from here. They're always going to have a crack at this as far as property investors go, because they were talking about it and planning and lining up to do it as far back as 2019 and as far back as late last year before Trump, you know, Trump had a go at Iran, which was on fair Saturday, February 28th. Um but they've now got the perfect excuse. Yeah, and I I think the justification um you know, whether it's real or not, is there now to say we're you know the wars cost the economy so much and it's gonna cost the economy so much, so we need to get it back, and um only those that are making a profit in the uh property market will um just have to pay a little bit extra, and um that'll be very hard to get sympathy for those people, uh, politically speaking.
SPEAKER_02So given that we're in an environment where rents are increasing, immigration's increasing, we uh, you know, through taxation reform, if it goes ahead, actively attacking uh those property investors that are supporting that.
SPEAKER_00We'll see what comes out. That could turn out to be a very generous heading, by the way. Yeah, look. This might be an increase in tax.
SPEAKER_02Of course, yeah. Look, I'm just using the the term because that's how it'll be spun, regardless of what the outcome is. It will be, you know, generational reform for the next, you know, whatever. But regardless of how the government spins it, given that the proposal is to recoup uh extra funds through those that are propping up the, you know, one of the major drivers of inflation because of all the factors we've talked about, what is, you know, if they go ahead with their proposal, what's the likely impact on the market here, do you think?
SPEAKER_00The property market.
SPEAKER_02Yeah, well, the rental market and the sales market. You know, for the investors that are now targeted, I would imagine there, you know, plenty of people that see it as no longer uh viable or practical to hold property. And then for those that do hold on, as you know, usually happens, the cost of doing business is offset in other ways.
SPEAKER_00Yeah, look, I I just I just see it all playing out in the rental market.
Why Investor Taxes Hit Renters
SPEAKER_02Yeah.
SPEAKER_00Yeah. I think people will um um work with the tax-free status of the primary residents.
SPEAKER_01Yep.
SPEAKER_00Um, say who wants to be in property investment. If um what what what is being discussed, and we'll we can we don't won't go too deep into it today because the budget will be out in two weeks, and then we can pick it apart. Yeah, we can peel it, peel it back then. But what what what is being um discussed is the uh capital gains discount will only apply to to property investors. Yeah, so that's just gonna push people into other asset classes, yeah, pure and simple. And then um you can say, great, we've made all of these homes available for owner occupiers, um, but there would-be owner-occupiers are gonna say, Yeah, great, but I can't save for a deposit um because my rent's just gone up 20% on on an already excessive level. And that's what's happening with the rental market, is they're trying to help tenants and they're trying to get people into their own property. But every time the rental market uh jumps the way it does, the the you know, the the the aspirational home buyer who's currently a tenant, their deposit is being absorbed in higher rent.
SPEAKER_02Oh, of course. And it's you know, everyone knows it's already incredibly hard to save in Metropolitan Sydney for a deposit. You know, average income is 13 to 17 years to save a deposit at the moment. Uh and I like it, it just biggest belief because the, you know, we talked about this maybe uh six or eight months ago, we were discussing, you know, the Greens and Max Chandler Mather and how he was always for reform like this because he has this utopian view that if you tax property investors, they'll just say, okay, well, I paid a million dollars for this apartment, but I can't afford it. So I'll just sell it to a family in need for a quarter of a million dollars. And of course, that's just not how it works, right? Yeah, it's they're gonna they're they may look to exit the asset class because it's not sustainable and they can't afford to upkeep, but they're not gonna sell for a substantial loss to benefit someone else just because tax is on the horizon.
SPEAKER_00Oh, well, look, um what's what's been happening more so in the last three years, and we've articulated this in our podcast, is would-be landlords are not entering the market at all. Yeah. Yeah, that's that's that's the other problem because of you know land tax, council rates rising, uh all of the things that that that we know. So um when when you know the Liberal Party are in power, they will say things like Labour will be a big spending, big taxing government.
SPEAKER_02Which they mostly are.
Big Spending Government Pressures
SPEAKER_00A big spending, big taxing government. Now, some people like that. They like that view of politics, which is take from you know the haves and give it to the you know have nots and you know spread spread the um spre spread the uh the the the the wealth around. Um and uh a lot of it in uh in Australia is on the back of natural resources. So uh it's just uh um you know you never know everything and and watching the Albanese government really, you know, the voice um and everything that went with the voice sort of uh held the Albanese government uh up while they were pushing that through. But since the voice has been out of the way, just watching their ideological um uh true north, if you like, uh since since that point in time has been interesting because they are a big spending, big taxing government. The NDIS is out of control.
SPEAKER_02Well, I don't think anyone argues with that, even them potentially.
SPEAKER_00Yeah, that's right. Well, you've got uh Labour ministers who are doctors coming out saying this is just absurd and unsustainable and wastage. And you know, just uh to put it on the record is that I have no problem with um government and social support for those that need it. But the tragedy is is it's being roared to the hilt.
SPEAKER_02I every time look I'm I'm you know, I am a huge advocate for the NDIS as a concept, as a concept, right? Uh but I always, you know, everyone I talk to about this, I say it's pink bats all over again, it's school halls all over again. You know, wherever there is a government idea that uh sounds excellent on paper, it is exploited by people to the nth degree and the taxpayer pays for it. And NDIS is the the largest, you know.
SPEAKER_00Yeah, but in fairness to the Rudd government, um those are the roughts, they they got on top of those pretty quickly. Of course, yeah. We we've known the NDIS is a wrought, not we, as in you and I, but as a society, we know it's been getting roared for the last four or five years. When is somebody going to do something about it?
Clearance Rates Crash And A Cautionary Tale
SPEAKER_02Look, I I I'm not involved obviously in its investigation, but I would say as someone you know familiar with the industry, my guess would be that unlike a school hall that's an obvious kind of uh or a pink bat installation where there's an obvious scam where there's no victim other than the taxpayer, uh, analysing people's requirements from a disability perspective is very complex, right? And you know, I suspect that this will go on until they just run out of money and say, okay, we're just gonna can the program and we'll start again. You know, I think that that's the way it'll end up because it's probably too late to recoup everything. Yeah, they're just gonna have to wipe the slate. But we're not here to talk about the NDIS. We we are here occasionally to uh shit on government or you know, give them a bit of grief when they're doing the wrong thing or making bad decisions. But as we kind of move forward, then I don't uh I don't want to dwell too long on politics, but given the government, you know, they're looking like they might make some of these changes, we're in a uh, you know, a period of potential, we're heading towards potential recession, we've got inflation all over the shop, it's a crisis. Do you think there's going to be any respite in the market for buyers? Well, probably sellers, actually, more so. Do you think sellers are going to have any comfort or luck over the next three to four months?
SPEAKER_00Let's let's finish on this back on the property market. That's a good point that you raised. Look, to give people some context, for the last two weeks on high auction numbers, SQM research have recorded the Sydney auction clearance rate uh 33% and 37%, respectively.
SPEAKER_02I don't think I've ever seen it that low.
SPEAKER_00I I I have.
SPEAKER_02Like we've done a lot of talking in the 40s, you know, low 40s. But definitely not in the 30s, not since we've been doing the podcast. Yeah.
SPEAKER_00There are times where I've seen the auction clearance rate in the 30s, and that's where it is for the last two weeks. We're recording on Saturday afternoon. We won't get today's final figures until Tuesday when people are listening to this, so it'll be what it'll be. Maybe you can put it in the byline or something when it goes out there. Um, so that's macro. Let me give you a micro story and my finish on this, Kieran. I have uh a listing with a uh sorry, a property with a signed contract offer on it. The owner says, no, that's not enough. And I said, look, be very careful. Be very, very careful. Um you've got rose-coloured glasses about your own property, which you're not the first and you're not the last that'll have that. Um this is a good offer, and I don't believe there's a better buyer in the marketplace for your property than what this offer is. No, no, I don't want to accept it. I'm just gonna take it off the market. That is code for you're off the job, I'm gonna find someone else. Um two weeks later, um, just a courtesy call, Peter, I've I've given the listing to someone else. Okay, okay, fair enough. I said, look, just so we're very clear here that the buyer that signed the contract with me is my my my buyer, you should really get an exclusion from them. Because as I told you straight last time, and I'll tell you straight now, this is the buyer for your property. Anyway, um the property goes on the market with an auction guide for less than the contract price I've got.
SPEAKER_01Yeah, yeah. Yeah.
SPEAKER_00So I'll send someone to the open house today. I say, go by down to that open house and tell me how many people are there. There's one party there. Yeah. That's that's the brutality of the current market.
SPEAKER_02Yeah. Even below the existing offer, there's no interest.
SPEAKER_00There's no interest. Yeah. Yeah.
SPEAKER_02Which, you know, and that more than likely that lie that uh seller is going to learn a very expensive lesson.
SPEAKER_00I they will not be the only vendor to learn a tough message out of this. There's been uh we have come since 2020, you know,$100,000 on your BAS, low interest rates, have some cash, UAK, don't you? 120% claim, you know. Don't get upset at us. We're the government, we're here to love you and help you. Um, we have been in a massive liquidity boom that is now over. And we are back to some of those markets that I have seen in the past, where the auction clearance rates in the 30s. So we're talking the credit squeeze in uh 2018, for example. Yeah, um, uh the GFC in 2008, early 2009, um back to Bob Carr's investor tax in 2004, where he wrong footed the budget and just invented a tax out of thin air on property investors. Surprise, surprise. Um and that that that really hurt the market at that time. So we're we're in that sort of uh genre at the moment. And vendors need to be really careful and you have to respect an agent who tells you what you don't want to hear. But if they can back up what they're saying with logic, you need to take a good look at it because you can you know grab your bat and ball and say, I don't like you, Johnny down the road is uh a better bloke than you and is going to do better that buy me until you until you're down there with Johnny and you realise that you've got a different real estate agent sitting in front of you, but the same problem. You want too much for your property relative to the current market.
SPEAKER_02Oh, and as you've said, in different circumstances to this, there are certain times in the market cycle where sellers cannot afford to be choosy because the buyers will just walk down the street and buy that other property where the owner is a little bit more realistic or they've come back a little bit and they're getting 10% off a better property to now match their original offer on yours. Uh, and you know, very, very quickly you can you can learn that uh you're stuck holding the back.
SPEAKER_00So, yeah, exactly right. So, to summarize, in in a good market, buyers are competing for properties, and in a market like this one, vendors are competing for a buyer.
Key Takeaways And Closing
SPEAKER_02Yeah. Yeah, and that's you know, even in the context of intro, you know, interest rate rises and all of that, the buyers still have the power right now. Look, really, uh really interesting times in the market, Peter. Great discussion today. I think it's uh it's gonna be uh an interesting few months ahead. I I hope I hope people are aware that there's a storm to weather yet. Uh, but as always, I really appreciate you coming in and and talking with our listeners.
SPEAKER_00Yeah, pleasure. Thank you, Kieran.
SPEAKER_02Thanks, Peter, and thanks to everyone for listening to Current Market Insights. We look forward to speaking with you next time.
SPEAKER_03Thanks for joining us on the Current Market Insights podcast. Providing realistically insights if you won't provide anywhere else.
