”I want to market my home to a cashed-up Sydney buyer. Our properties are cheap compared to their properties. How do we market directly to them?”
On the surface, this train of thought seems logical enough – a 4 bedroom home 15km from the Sydney CBD might be worth $1.5 million down there…and a similar property equally distant to the Brisbane CBD could be worth $600,000 when comparing the local market.
So, does it stand to reason that an uneducated Sydney buyer might pay $750,000 and still feel like they’re getting a red-hot buy?
In the days gone by before the internet was around, the frequency of this sort of thing happening would have been ‘occasionally’.
Every now and then, an unsuspecting buyer might have been in a rush to buy and paid a well over-inflated price in their haste.
These days, the frequency of this happening would be considered ‘very rare’.
And even if they did fly in from another state, territory or country without spending too much time perusing properties, a premium price nowadays might be considered to be anywhere from $20,000 – $50,000 rather than the several hundred thousand that every home-owner would dream of securing.
There’s so much information on the internet these days, I could guarantee you that if we spent a single hour researching a specific suburb or town that could lie on the other side of the country, we’d have a pretty fair idea of the market by the time we’re finished.
So right now, it’s important to dispel the myth that buyers from Sydney are idiots and will blindly purchase a property without really knowing what they are doing. (One could argue that those from Sydney did blindly support their rugby league side for a dozen years with almost no success and this may provide a solid argument that those from NSW could be construed as idiots…but that’s another story isn’t it? 😊)
If you put yourself in the minds of interstate buyers, their uncertainty about the market can often lead to them offering quite a deal less than what would be considered to be fair market value. Remember – every buyer is always concerned about paying too much for the area, street or the property itself…so if they have a little more uncertainty, they are usually a little more conservative in their negotiations.
So now let’s consider marketing to interstate buyers…
Firstly, despite what the we may perceive to be true, our Southern friends are migrating to our great state but certainly not in record numbers.
Leading economists tell us that job opportunities (whilst starting to increase now) have been limited for some time and our cost of living is still quite high.
When you break down the numbers, there’s only 1-2 families moving to each suburb in Brisbane every week…and this number isn’t enough to create untold hysteria and wild capital growth, especially considering the number of new dwellings (mainly units and townhouses) that we’re creating as we move forwards.
And as for the situational Sydney buyer that might have a Brisbane property advertisement slap them in the face when they weren’t really looking to buy and suddenly think to themselves…
“Gee that seems cheap…perhaps I should consider buying up there”… well let’s just say that we haven’t received a single enquiry like this for years.
Sydney buyers sailing into the city with a golden chequebook and heading off with a few property contracts under their arms do occur but these buyers usually have an investing strategy in mind and as such, they’ll search for the sort of properties they are seeking via traditional means (such as the major real estate portals on the internet)…and more importantly, they’ll conduct significant amounts of research before making their offers.
So, if Sydney buyers aren’t the suckers we’d like them to be, are there opportunities with international investors such as the widely publicised high-net worth Chinese community?
Next week, we’ll explore this topic further.
Until then, Happy Listing & Happy Selling!