The month in review: Newcastle
By Herron Todd White
This column, by necessity, is going to be towards the briefer end of the spectrum for Month in Review prognostications. We are absolutely inundated at the moment with valuation requests which is indicative of a market at the very height of its cycle. This should tell you enough about the strength of the current market right there. An appropriate word might be bullish. Buoyant would also get the job done. End of column……
Fleshing things out slightly and putting this in parlance that might resonate with property novices, we could liken the present market to the All Blacks a week before Ireland came along, cruising along in battle formation, unswayed by outside influences. If rugby is not your thing, maybe a summer sport would work – an Australian cricket team led by the relentless Steve Waugh simply uncaring about opposition teams, media or game plans. There is only one goal and no deviation from the task at hand is acknowledged or accepted. Outside influences do not exist.
Maybe sport doesn’t interest or excite you. You might be more engaged in politics. If that is the case maybe we could see some parallels between our current market and (the writer pauses and ponders the ramifications of writing about politics for a brief period before continuing on…) America a week before the election of a new President. Think back to the collective thoughts of media, pundits and even politicians at the time. They all knew one thing and that was a certain outcome was all but assured. There was massive momentum for this outcome and it didn’t look like anything could stop it. No one thinks the market here in Newcastle is going to slow down either… Any brave souls out there?
The above scenarios are all examples of absolute juggernauts that steamroll everything in their paths, with nary a flicker of emotion or remorse – the All Blacks are renowned for their merciless efficiency, whether against the historic foe or newer upstart pretenders. So too the mid 90s Australian cricket team which was equally as ruthless, taking pride in not removing their foot from even the most helpless opponent; in fact, squeeze harder was their mantra.
The housing market in Newcastle is not too dissimilar to these behemoths – large, powerful and showing no mercy to those not at the top of their game. If you are in the market for a new home or an upgrade, you need a few things on your side. You need to be able to move fast. This writer recently saw a clip on the Galapagos Islands where a single iguana was being pursued at every turn by a large pack of snakes lying in wait. The lone iguana was twisting and turning in an attempt to outrun the devious snakes. In order to escape the snakes there was a mix of frantic energy and cold calculation. Our market appears like this sometimes – in order to purchase a property, often a premium is required to be paid and it needs to be paid quickly to avoid gazumping. You need to be calculating and frantic.
One thing is interesting and worth thinking about with these three separate examples.
The All Blacks lost to Ireland and their world record winning streak is over. The streak will have to start again. You have to start at one win.
The invincible side of Steve Waugh is all but a distant memory with the Australia cricket team in the midst of its worst slump in three decades.
The Democrats lost the election to the surprise of absolutely everyone, including it appears the President Elect.
These factors illustrate the fact that good times never last, things are cyclical and its best not to crow too much when on top as you are likely to hear about it on the way down.
Yes, the market is hot right now and we would question whether now is a good time to buy a property. If you do you are likely to pay more than it’s worth. Only time will tell whether the price you pay now is cheap in 12 months time.