Prospective buyers

FOMO returns to Australian property market

PHOTO: Panicked buyers are turning up to auctions in droves. Nine

Prospective buyers are turning up in droves to bid at auctions and house prices are rising rapidly. But the Reserve Bank and the Morrison government are not worried – yet.

The auction is “on site” with onlookers spilling onto the road between parked cars. The build-up has been nerve-racking with all the home inspections horribly overcrowded with potential rivals. The bidding, when it finally comes, is terrifyingly quick.

It’s obvious by now any “guidance” from real estate agents tends to be at least a few hundred thousand dollars below the actual price. Solicitous sounding agents can hardly stop grinning as they count the commissions

For this particular auction of a two-bedroom apartment, my son and his fiancée are trying to take their first step on the Sydney property ladder but are up against at least 15 others.

So son Tom has taken some advice – naturally not from his mother – on the best auction strategy in a booming market. It is to go in strong and early to try to avoid momentum building, and to match any others quickly until his agreed limit. Take a deep breath.

To our mutual astonishment it works this time – another small addition to a very strong auction clearance rate of close to 90 per cent in Sydney. Champagne and surprised relief all round. The catch is that “winning” requires taking out a gargantuan loan that would have seemed beyond financial comprehension even a year ago – let alone for a young couple on average wages.

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