Originally published Smart Property Investment in May 2020
In the most recent episode of What’s Making Headlines with Phil Tarrant and Tom Panos, the hosts discussed the low levels of stock available right now, and how it’s influencing the buying and selling decisions of both owner-occupiers and investors.
Mr Panos began by conceding that stock levels have been very, very low, considering it as “daunting”.
Making matters even more downcast is the fact that low stock levels are coupled with buyer and seller sentiment around “whether or not it’s the right time to transact in real estate”, according to Mr Tarrant.
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 [are] 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,” he offered.
“If there [are] 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 [are] 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 [it] 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 conceded.
“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,” he said.
Highlighting the six-month moratorium on interest rate payments, Mr Tarrant said “that should be able to cover you off, even if you don’t have any rent coming in”.
According to the investor, “this should be able to mitigate or minimise that financial cash flow impact that you have on your properties.”
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 “absolute worst-case scenario”.
It’s also not speculation that is fazing Mr Panos.
“I’m going to put my money where my mouth is. I’m a buyer,” he acknowledged.
He believes that a lot of people are going to look at residential real estate as “a safe haven” despite the recent doom and gloom.
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