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“I think the notion that FOMO has switched from buyers to sellers has been happening for a couple of months now as people have been anticipating interest rate rises,” Dowling said. “A number of people have pushed forward quicker than otherwise they would have.”
House price falls in some parts of Melbourne, interest rate rises and the upcoming federal election were now influencing both buyers’ and sellers’ decisions on when to get into the market.
“It has had a huge psychological effect on people,” Dowling said.
While interest rates are rising, they are still quite low and homes, including those in the premium market, are still selling for solid prices, he said.
And while buyers are still buying at auction, they are now being more cautious about making the right offer.
Buyers are being a lot more cautious about what they spend at auctions.Credit:Renee Nowytarger
ANZ senior economist Felicity Emmett said buyers could now be suffering from a fear of overpaying rather than a fear of missing out, though it was not true of all capital cities.
“Looking at the Sydney and Melbourne markets, they may be worrying about overpaying going into a rising interest rate market, but other capitals are still running pretty hot,” Emmett said.
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Emmett believed more sellers would come to the market, though this number would fall as prices softened.
“I think initially in the phase of the rate rise, vendors will think ‘if I want to sell it’s probably now’,” Emmett said. “The decline in prices has been relatively shallow, at least initially, but if prices do fall more, we know people don’t like to take a loss, or a perceived loss, we could see volumes drop off.”
Mortgage broker Chris Foster Ramsay, of Foster Ramsay Finance, said those who had been “umming and ahhing” about listing their homes for sale were now rushing to the market before further interest rate rises.
“We’ve got agents saying if we’ve got people who want to sell, then sell now,” Foster Ramsay said. “They’re going now.”
If buyers are hoping to bag a property bargain, as prices fall further, they may be left disappointed, he said. Especially as house prices in Melbourne and Sydney are expected to drop moderately.
“Some buyers have their own ideas based on the 1980s stock market crashes,” Foster Ramsay said. “But when you explain prices may only come back by about 7 per cent, then waiting to buy looks a lot less enticing.”
As rates rise, fear of missing out shifts from buyers to sellers
Source: Philippines Alive
