The Fear of Making a Mistake in Australia’s Property Market: An Analysis of Housing Trends
In the Australian property market, the Fear Of Missing Out (FOMO) is fast giving way to a new apprehension – the Fear Of Making a Mistake (FOMM), as explained in a thought-provoking article by Sue Williams. The uncertainty about interest rate hikes, contradictory predictions on prices, and the lack of supply are making it difficult for individuals to make significant decisions concerning their homes.
As real estate agent Wesley Bucello notes, “we’ve really gone from FOMO to FOMM”. This fear is especially palpable among first-time or inexperienced buyers and sellers, leaving many “bewildered at the moment by what’s happening in the market”. While older, more seasoned buyers continue to act confidently, FOMM is leading to indecision among the rest, says Dan Sofo, founder of Unicorn Buyers Agents.
Nevertheless, despite this palpable fear, Australian house prices rose by 2.8% across the June quarter according to data from CoreLogic, a trend that indicates recovery from the lows experienced late in 2022. While FOMM might be prevailing, the property market shows signs of resilience with average dwelling values in major cities like Sydney, Brisbane, Adelaide, and Perth all increasing by more than 2% in the June quarter.
However, this does not dispel the broader concerns that are causing hesitation in the market. Property expert Scott Aggett of property negotiators Hello Haus highlights the difficulties faced when both buyers and sellers succumb to FOMM and are “sitting on the fence for long periods”.
Yet, it’s worth noting that despite the apprehension, experienced buyers and investors are maintaining market activity. They display a level of confidence and willingness to act, and these are the players who are “keeping the market turning over, and showing how it can be done”.
Interestingly, research conducted by Dr Nicola Powell of Domain has found that the Fear Of Making a Mistake should not be a barrier to making significant property decisions. Her study indicates that “it is not timing the market that is important, it is the time spent in the market that counts”
Nerida Conisbee, Chief Economist at Ray White, echoes this sentiment. Despite recent property value drops, she suggests that the major driver for this decline, the increase in the cost of finance, is unlikely to significantly affect the market over the next twelve months.
Amid these contradictory signals, the housing market is also seeing properties spend a longer time on the market, with an average of 34 days to sell compared to 30 days in Q1 2023. These signs of hesitation alongside the recent trends of increasing prices reveal a complex picture of the housing market and the psychology driving buyer and seller decisions.
In the end, both articles underscore the point that understanding the market dynamics and overcoming fear may be the key to making sound property decisions. The advice seems clear – despite the fears, opportunities abound for those willing to ride the market waves.
References:
Williams, Sue. “Housing market FOMO has been replaced by FOMM – the Fear of Making a Mistake.” https://www.domain.com.au/news/property-fomo-has-been-replaced-by-the-fomm-the-fear-of-making-a-mistake-1225037/
Cameron, Michael. “Australian house prices rose 2.8% across the June quarter: CoreLogic.” https://thepropertytribune.com.au/market-insights/australian-house-prices-rose-28-across-the-june-quarter-corelogic/
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