Perth property FOMO leading to regrettable rush on subpar homes
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In a fiercely competitive real estate market, the fear of missing out (FOMO) is pushing Perth homebuyers to make potentially regrettable decisions. Desperation to secure a foothold in a housing market that has seen the median property price leap by 13.5% over a year has led to purchasers compromising on the quality of properties, says local buyer’s agent Peter Gavalas from Resolve Property Solutions.
According to Gavalas, “The bottom line is that, right now, the Perth property market doesn’t have enough supply to cater to all the demand,” leading buyers to panic buy homes with issues ranging from structural problems to less desirable locations, such as busy main roads.
With property listings in Perth down 21.7% from last year, per SQM Research figures, what Gavalas refers to as “C-grade properties,” typically difficult to move in a stable market, are going under contract within weeks, or even days. But, despite the fast turnover, these properties often sell at discounts from their original listing prices.
Gavalas cautioned against buying lower-quality homes, warning of two significant risks: struggling to sell during a declining market or missing out on substantial capital growth that higher-quality homes typically enjoy. He stated, “If they ever want to sell their home when the market is declining or even just growing moderately, they’ll struggle to find a buyer, which means they’ll probably have to take a big haircut on the price.”
Highlighting the pitfalls of FOMO in the current property climate, he suggests a wiser choice: investing in a “higher-quality property with stronger resale value in a cheaper neighbouring suburb.” Gavalas affirmed, “Even though I understand a lot of buyers are experiencing FOMO right now, they’re likely to suffer a serious case of buyer’s remorse in the years ahead if they compromise on quality.” This insight serves as a warning to prospective buyers to think long-term and not give in to the transitory temptation of an overheated property market.