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Buyers are being urged to beware as a real case of FOMO (fear of missing out) sets in on investors on the back of booming market activity.
The COVID-19 pandemic has put a real spotlight on regional towns, with investors flocking to buy into these currently ‘more affordable’ yet highly appealing lifestyle spots.
According to Pure Property Investment’s managing director, Paul Glossop, the pandemic-induced lifestyle shift has created unprecedented trends, with previously unfavoured spots emerging as ‘highly desirable’ slices of the property market.
“These markets, all of a sudden, sound highly desirable because people think they’re going to be working remotely for the rest of their lives and that all of the sudden these markets are coming back to life because people are holidaying there,” Mr Glossop said.
But the real danger, he said, is the return of FOMO, with investors increasingly succumbing to the pressures of a rapidly changing market.
“FOMO is coming back,” Mr Glossop said.
“I haven’t heard the analogy for a good five years, but it is back.”
He stressed that despite the regional appeal, investors need to focus on long-term objectives and historical market movements.
“What we’re seeing is an immediate and almost instantaneous shift from people thinking about fundamental long-term objectives, and things that drive property markets over decades have all of a sudden gone out the window, and people are now thinking it’s a great place to live, so therefore if I can work remotely, that’s where I should invest,” Mr Glossop explained, noting that the fundamentals of property investing remain intact.
“I can see the allure of the coast as a surfer. I love being by the waters, but people need to raise families, people need healthcare, people need tertiary education, people need commerce. They need culture, they need to be located near friends and families.
“You can’t replace that in a quick six to 12-month cycle because of COVID has led to. I don’t want to be the one sitting here in two years’ time, telling you I told you so,” Mr Glossop stressed.
Currently, these markets are “completely and utterly overstimulated and undersupplied”, which calls for greater caution when making investment decisions that can ultimately affect an individuals long-term ability to invest.
Mr Glossop noted that while the numbers may point to certain areas, investors are advised to understand the narrative behind the shifts through professional guidance.
“Be cautious of making those decisions in regional towns, which you wouldn’t even have considered 12 months ago.
“You need to be smart in this market... Get the right advice,” he concluded.