Powered by MOMENTUM MEDIA
realestatebusiness logo

Breaking news and updates daily. Subscribe to our Newsletter!

Home of the REB Top 100 Agents
Breaking news and updates daily. Subscribe to our newsletter

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

The low-stock conundrum

By Grace Ormsby
20 May 2020 | 1 minute read
for sale

Low stock levels could have a huge impact on the real estate sector for months to come, especially as vendors and potential purchasers grapple with the decision of whether they should be transacting at all.

In the most recent episode of What’s Making Headlines with Phil Tarrant and Tom Panos, the hosts discussed the potential long-term ramifications on real estate of the health crisis that has turned into an economic crisis.

It led Mr Panos to concede that stock levels have been very, very low.

Advertisement
Advertisement

He admitted that “it’s actually daunting to see how on earth real estate agents were able to get by and [are] getting by because stock levels are terrible and stock levels are what keep agents going”.

Chiming in, Mr Tarrant highlighted the “dichotomy” that has faced a number of Australian real estate agents in 2020.

Earlier this year, “some agents were having the best months they’ve had in a long time — and that is realising dollars in their bank account from properties that settled some time ago”.

The Momentum Media director flagged how “a lot of agents in April and even in May won’t be able to show that decline in revenue [to qualify for JobKeeper] purely because it’s a product of the work they did a couple of months ago”.

“Agents are going to really start hurting in this period now from June, July and August because of this reduction of stock on the market. The properties aren’t there for them to sell, you know?”

Making matters even more downcast is the fact that low stock levels are coupled with both buyer sentiment and “even seller sentiment around whether or not it’s the right time to transact in real estate”.

Low stock levels have caused Mr Panos to shift his thinking around the normal real estate calendar cycle and the potential it may reap for certain vendors.

“There’s a lot of stock that didn’t hit the market in March or April. I’m actually saying June is the new March, July is the new April,” Mr Panos said.

“If there’s a lot of stock that comes on, you might be one of those lucky people that sold, got a decent price [and] are able to buy when there’s a lot of stock.

“If you’re someone that was thinking of actually selling your house, that your plan was that you’re going to be moving — and it’s not a commercial decision but one of lifestyle — I would be tending to think about this current period.”

Explaining himself further, Mr Panos said: “The reason I say that — the first day after lockdown, we get 12 people registered and bidding on a property, which means that you could potentially, if you were going to sell, have buyers.”

While acknowledging it as “a bit of a risky strategy”, the real estate trainer said he’s always thought, “sell high, buy low”.

While Mr Tarrant agreed that for people out there with very stable jobs who might be looking to transact the family home that “now might be a good time to upsize or upscale if you are able to do that”, he also conceded that for himself, as a property investor, he would not be selling now.

“If you can hold onto your properties, for whatever reason, I’d be holding onto it,” Mr Tarrant said.

“Now, if you need to sell because of absolute financial distress and that’s the only option available to you, that’s something you may need to do, but you’d be selling in a distressed market.”

He said for anyone who is selling investment property at this time, “potentially, you’re selling it to other investors”.

He explained that there are investors out there who are cashed up and ready to go who are looking for good buying.

“Myself personally, I’m not selling. A lot of property investors I know are not selling. And the reason for that is not under distress by any means, but there are so many other avenues available to you to retain your property if you are under stress.”

And despite mainstream media concerns around the potential for real estate values to drop by up to 30 per cent, Mr Tarrant emphasised this as an “absolute worst-case scenario”.

It’s not the speculation that is fazing Mr Panos.

“I’m going to put my money where my mouth is. I’m a buyer,” he acknowledged.

He expressed the belief that a lot of people are going to look at residential real estate as “a safe haven” despite the recent doom and gloom — and has attributed this to the volatility of the sharemarket and the loss of banking dividends in particular.

The low-stock conundrum
house for sale sign reb
lawyersweekly logo

ABOUT THE AUTHOR


Grace Ormsby

Grace Ormsby

Grace is a journalist across Momentum property and investment brands. Grace joined Momentum Media in 2018, bringing with her a Bachelor of Laws and a Bachelor of Communication (Journalism) from the University of Newcastle. She’s passionate about delivering easy to digest information and content relevant to her key audiences and stakeholders.

Rankings
rankings
JUST RELEASED
May 09, 2022

REB Top 50 Women in Real Estate 2022

REB is thrilled to present the Top 50 Women in Real Estate 2022 ranking, which sets t ... LEARN MORE

rankings
JUST RELEASED
May 04, 2022

REB Top 100 Agents 2022

Now in its second decade, the REB Top 100 Agents 2022 rankings are the most revered s ... LEARN MORE

rankings
JUST RELEASED
May 02, 2022

REB Top 50 Agents NSW 2022

Even a pandemic has not put the brakes on the unstoppable property market in NSW, whi ... LEARN MORE

rankings
JUST RELEASED
April 27, 2022

REB Top 50 Agents VIC 2022

The COVID-19 crisis has not deterred the property market in Victoria, which has been ... LEARN MORE

rankings
JUST RELEASED
April 25, 2022

REB Top 50 Agents QLD 2022

As the property market continues to roar in Brisbane and Queensland, the REB Top 50 A ... LEARN MORE

Coming up

rankings rankings
Do you have an industry update?

top suburbs

12 month growth
Mirador
103.33%
Bawley Point
98.13%
Walla Walla
90.7%
Byron Bay
86.67%
Kiama Heights
85.93%
Greta
84.14%
Nulkaba
81%
South Hobart
78.78%
Diddillibah
76.25%
Lennox Head
73.98%
SEE AREA REPORTS ON SMART PROPERTY INVESTMENT WEBSITE
Subscribe to Newsletter

Ensure you never miss an issue of the Real Estate Business Bulletin.
Enter your email to receive the latest real estate advice and tools to help you sell.