Buyer behaviour

Buyer behaviour is a fascinating thing. Although every individual has their own reasons for buying and selling, mass behaviour affects the market, and is affected by it. Sometimes you feel like you’re part of a sort of superorganism. In nature, a colony of, say, ants is made up of individual insects, but their behaviour is determined by the collective needs of their colony. Breaking away is not an option.

Of course, we humans are a bit more individual than that, and a lot more complex. But we can all observe examples of the “hive mind” or the “herd mentality” all around us. Sometimes certain trends in human behaviour are worth taking note of, especially if you want to come out on top financially.

In real estate, it’s very important to watch such trends closely, for the sake of our business and the clients we serve. In fact, it’s part of the service we provide. We help prospective buyers and vendors to see these trends, and to leverage this knowledge for maximum benefit.

In Australia’s real estate market, there are a few current developments worth considering. One of the larger forces is economics – a universe of its own – and the way it manifests itself in factors like interest rates. The current low interest rates and fairly dramatic price recoveries, as well as banking enquiries and last year’s federal election, have all had an impact on real estate activity. But there are other factors, and the results can be surprising.

Who’d have thought that people would start to think about leaving the mainland for little ol’ Tassie? But some very good, well-positioned real estate, coupled with new work opportunities and relatively cheap prices compared with the main centres of Sydney and Melbourne, is leading people to think about taking up residence in the Apple Isle. Of course, it’s about time Tasmania took off in terms of hospitality and tourism. It should have happened long ago, but it didn’t. Even for those astute enough to anticipate that it was going to happen, timing is everything.

Timing and vigilance. If you have an eye to real estate, you need to be watching everything, and thinking hard about how it will impact on the property market. The local economy surges a little, and suddenly there’s a wave to surf. Then a university goes up. Jobs spring up around it. Suddenly a place like Launceston is looking like a good investment! Who’d have thought? Perth is now looking good again with the recent mining resurgence.

Other places suddenly become tourist destinations. They sprout resorts, or luxury hotels and entire industries materialise to support them. Sometimes it pays to know a little history. A certain town might have been quietly minding its own business for a century, and just like that, it’s the place to be seen. Mackay, in Queensland, is an example. Sometimes ease of travel opens up an entire town that was previously unthinkable. Certain regional centres in Victoria are examples. Places like Bendigo, Castlemaine or Woodend have become popular once people have realised it’s possible to commute to the Big Smoke and be home enjoying the tranquillity of their semi-rural retreat at the end of the day.

Certain suburbs sometimes begin to look more enticing as they open up with the addition of light rail or trains and buses. Twenty years ago, the psychology of Brisbane people was fascinating. An attractive suburb 15 minutes from the CBD would be considered the “boondocks”, yet incisive investors could see that it was time to start buying. Now rail to places like Woolloongabba get commuters to the city in minutes, and land process reflect its new accessibility. In Melbourne, it was once the same with Diamond Creek, and in Sydney, Richmond and Windsor.

The Hills District, where we operate, is now incredibly well-served compared with its situation even a decade ago, and already we see the benefits in terms of population movement. It’s a thriving community! The T-Way, various stations and access to arterials now make travelling to any destination a cinch, and prospective buyers no longer need to hesitate as they contemplate the work-home balance.

Of course, you don’t have to mindlessly follow every trend. You need to look at it systemically – that is, through time as well as the here and now. Economics is cyclical, and we always need to remember what was happening before the current stimulus, what might happen again, and how far off it might be.

The surfing analogy is apt. The world ebbs and flows. A good investor stands on the shore and reads the swells. He watches. And when the time is right, he takes the plunge, gets the right wave, and the ride back in is cruisy!

Good investors either have good all-round knowledge, or they know where to get it. That’s where we come in.

We at Harcourts Hills Living are repositories of local knowledge, but we also keep an eye on the larger geographic, economic and social trends – with a bit of mass psychology thrown in for good measure! Give us a call. We’re happy to share our knowledge if it changes your life for the better!