First home buyers are now dominant, but what challenges do they present for agents?
With around 65% of the Aussie population owning their own home, it’s kind of a big deal, inextricably tied to the Great Australian Dream. Unfortunately, recent obsession with investing and development had seen first home buyers become absolutely drowned out amongst bigger players in the pre-2018 market, especially in Sydney. Zealous and confident investors, buoyed by easy loans and lots of equity, snapped up everything in sight. First home buyers never stood a chance. Come July 2018, the tide has finally changed, prices are dropping and Sydney is once again a buyers' market. Now, in a different landscape, real estate agents need to work harder and smarter to wrangle with the traits of the 2018 first home buyer. “First home buyers are spoilt for choice in the current market”, says Andrew Phanartzis of Property Association. For someone who is entering unchartered waters, this can easily create confusion and a lack of urgency, making the job of agents much harder. It’s hard enough to convince someone to buy in a declining market, but add to that a huge choice of properties, and you have a first home buyer who is also complacent. “As agents, we really need to be working hard to help buyers understand the value and unique qualities of each property we show”, Andrew continues.
Being unfamiliar with the process of buying only adds to the complexity. Andrew recommends that first home buyers school themselves on the process by talking with either their mortgage broker or lawyer. “This can definitely lead to fewer misunderstandings down the track. A real estate agent who can readily identify the issues a first home buyer is having and can take the time to educate them will definitely see success, even in this slow market”, Andrew continues.
An abundance of choice brings another hurdle. “It’s fair to say that we’re dealing with many more buyers who have no qualms about moving on if their offer is not accepted”, Andrew adds. For a time-strapped agent who has already put hours of work into trying to match a buyer with a property, whilst negotiating and managing owner expectations, this can be a real blow. “People don’t realise how much time is involved, flipping between buyers, sellers and solicitors to create a win-win outcome when today's buyers clearly feel it's their right to end up on top. ”, he tells me.
The media is not doing the industry any favours either. Daily headlines are making buyers extra cautious and nervous. Agents can combat this by reminding clients that a home investment is not a short-term decision, and informed decisions never lose value in the long-term.
Rentvesting, adds a challenge too, especially with millennials trying to get into the market. This recent property trend has seen a lot of buyers with less emotional ties to properties. Andrew continues “It’s definitely harder to sell when the emotion is tied to the financial commitment rather than the home itself”. The YOLO mentality definitely has a lot to answer for, bringing a greater fear of long-term commitment and debt than previous generations.
Real estate agents face countless obstacles in trying to close a deal in the best of times. Ensuring success with 2018’s dominant buying force, the first home buyer can only be won by tackling their unique traits with a proactive and dedicated attitude. By helping buyers arm themselves with the facts to make informed decisions, agents can ensure a positive outcome for both their selling clients and their buyers.