The closest most Australians will get to a Greek crisis is a dodgy late night souvlaki, yet so many seem spooked about the debt brouhaha that’s dragging out a few thousand miles away. A recent experience leaves me unconvinced the average punter even knows what’s going on, let alone how it affects them. Are we scaring ourselves into another slump?
BY SHANNON MOLLOY
I was at a barbecue recently when someone lamented the current “dire” state of the property market. She eagerly looked to me – suddenly the resident property Yoda among my circle of acquaintances – for confirmation of her outlook. When I referenced a slew of recent positive market indicators, and spoke about my interest in buying another investment, the entire gathering came to a halt.
It was like I’d lit a fire in the middle of someone’s wedding ceremony, or re-enacted the jump scene from Dirty Dancing on a busy train. Curious glances. Dead silence. Jaws slightly ajar.
After checking I was still wearing pants, I began probing. What’s still got people so spooked about the market? “Oh, you know… Greece!” came one response. Snags in hand, the group began nodding in unison.
What about Greece? What part of the situation affects a regular person’s purchasing decisions?
“Oh, the eurozone… the ceiling, the thing… it’s the market, you know, the dollar and… Germany. And SpongeBob, double mocha frappe chino.”
Well, it was almost that incoherent and confused. It was obvious that most of these people, despite being educated professionals, knew there was an issue but had no idea what it was. They also understood this mystery situation had the potential to impact our financial markets, but no clue how.
How can a vague awareness of something, somewhere result in such uncertainty? It’s a bit like being in bed, hearing a rustling noise outside your window and, without question, wildly firing shots into the darkness.
Part of the cause of our shaky sentiment is undoubtedly the thin detail and panicked tone of the constant coverage of world finance issues. Or we’re just not listening properly and only get a broad idea of what’s happening. Either way, it’s trickling down to suburban streets across the country. The time a property is on the market has increased and so has the level of discounting that’s needed to achieve a sale.
News of this sluggishness only makes people more nervous. Throw in seemingly weekly stockmarket fluctuations, something in the Middle East and a shock elimination on The Voice, and you’ve got a recipe for rioting in the streets.
But aren’t the bad times in property actually good for investors? It’s easier to snap up a bargain, vendors are more flexible and there are fewer buyers to create competition. Better still, rents are strong in most locations.
When I pointed this out, most of the barbecue guests agreed. Perhaps it was a good time to buy after all, some thought. After just a few minutes, months and months of negativity had been replaced with an intrigued optimism. It’ll probably be reversed with one front page’s fowl swoop, but hey – I tried.
I’m not suggesting financial woes abroad can’t or won’t have an impact in Australia, but I wonder if anyone really knows what they’re frightened of anymore. Am I alone in my thinking? Am I missing something, or are we simply too quick to retreat into our non-spending bubbles?
Shannon Molloy is the deputy editor of Australian Property Investor magazine, www.apimagazine.com.au