I am a PAAP (Person Appathetic About Property)
The more investor owned housing I see listed online and in print with money spent on expensive-reeks-of-desperation huge print advertising the more I feel the FOMO (fear of missing out) slip out the window with the wind. I get calmer by the day particularly when I see a listing from twelve months ago that is once again testing the market at an unrealistic price and getting the same response.
This article suggests that I am right to let the FOMO go:
Personally, I refuse to be a land lord and to buy anything other than vacant property. I will not be the one turfing a family onto the street. A cursory glance at Gumtree's real estate listings for Hobart three or four days ago showed a sharp increase in families with four children looking for rental which I find both scary and bizarre given generous family tax benefits for families of this size. I know some people have extenuating circumstances, and bad things happen to good people, but the money for families with both parents and four children competes with professional salaries for a bread winner. All the families I read about had been given notice by their land lord. Most of these land lord's were looking to prepare the property for sale. From the profiles I read, only one was looking to move into the house themselves and become owner occupiers. The unfortunate saying that comes to mind is "like rats off a burning ship".
Assuming these investors price their properties competitively, at the moment they have a decent chance of sale. They will not have a decent chance of a sale if more people become PAAPs (Person Appathetic About Property) and realize that if everyone becomes PAAP the prices will drop "like a lead balloon".
Further observation of the market shows that while investors make up a decent chunk of listings so do traditionally cheap, and desperate, deceased estates (The Mercury last week had investor purchases at 21 per cent of the Tasmanian market, volume of sales has dropped dramatically year on year in the last ten years according to The Mercury's figures - http://www.themercury.com.au/subscribe/news/1/index.html?sourceCode=TMWEB_WRE170_a&mode=premium&dest=http:%2F%2Fwww.themercury.com.au%2Frealestate%2Finvestors-rush-to-buy-a-slice-of-the-tasmanian-property-market%2Fnews-story%2F8a85f436146878a7702d8425181ab3de&memtype=anonymous). I noted that The Mercury's article focused on the percentage of investors in the market not the volume of sales. Had the focus been on volume of sales by investors in Tasmania then the twenty one percent would have been seen in the context of sales volume this year projected to be around one tenth of ten years ago according to my analysis of their figures. If you question me suggesting sales are declining, this media release by REIT shows this to be the case: http://reit.com.au/wp-content/uploads/REIT-Media-Release-September-Quarter-09-11-16.pdf Other media releases show a consistent decline in sales.
Currently, deceased estates are highly competitive but an avalanche of listings and restricted borrowing can change that situation rather quickly.
Then we are left with bank sales which my subscription to http://www.forcedsales.com.au/ shows no sign of abating. There are owner occupiers in the market but my observation in the areas that I am looking in greater Hobart is that they are fast becoming far and few between.
If you decide to join me and become a PAAP, or indeed use the term, please provide a link to my article and my original term for unexcited property purchasers!