Fickle

Markets are fickle because they are driven by humans, who are fickle.

Market sentiment is a very subjective and nebulous thing – attempting to collate a bunch of people’s feelings and emotions towards the market.

It is purely subjective. It depends on who you ask and when.

It can also turn on a dime. 

Anyone who thinks that markets are rational and can be accurately forecast is a fool.

In the early days of Covid there was a genuine fear that 10 percent of the human population could be wiped out by a deadly virus. 

The oil price dropped below zero dollars for a brief moment in time. 

The stock market nosedived. 

No one in March 2020 predicted that house and asset prices across the world would see one of the biggest booms in human history in the following 18 months.

No one predicted that the subsequent inflation would get out of control and we’d see the most aggressive rate hiking cycle in Australia ever. 

And it is likely that no one will predict exactly when the next property boom in Melbourne will begin. 

It might have started last weekend. 

For reasons unknown to me, our clearance rate across Jellis Craig’s 41 offices jumped to 84 percent (91 out of 111) on Saturday. 

The past few weeks have been averaging around 70 – 75 percent clearance on similar volume. 

There has been some more positive reporting this week in the media with the latest announcement on the substantial stamp duty saving for off the plant multi-residential apartments and townhouses. 

Taking effect immediately, off the plan buyers at all price points could pay as little as a quarter of the usual stamp duty (although it’s not quite as simple as that). 

Whether this has the desired effect of increasing supply and making these properties more “affordable”, or whether it will just mean higher prices, is to be seen. 

Either way you would think it should improve sentiment, especially for developers and those considering off the plan purchases. 

And while I’m being somewhat facetious that the market might have turned last weekend and we’re about to see some serious growth in property prices in Melbourne, it will happen at some point, and probably when we least expect it. 

This Saturday is “Super Saturday,” the busiest auction day of the year. 

It will be very interesting to see how clearance rate holds up. 

But for you, individually, does it really matter? It’s just a number. Will it impact your life or your decisions in a meaningful way?

If you’re buying or selling a home, it’s never just about the numbers. 

It’s mainly about the emotion… We’re fickle like that. 

Feature Property: 6 South Terrace, Clifton Hill