Episode 140 | Behavioural science of property buying | Dr Nicola Powell, Domain | Insights from Domain.com.au

Understanding buyer preference through Domain search data, what are people looking for?
We love nothing more than data, data and data, and in this episode we interview Dr Nicola Powell, Senior Research Analyst at Domain, she is at the helm of Domain’s data reports and has appeared in various mainstream media outlets. Nicola delves deep into the search data and behavioural science of buyers and sellers, also giving us tips and tricks on how to utilise Domain data to make better property decisions. 
Here’s what we covered:

• How many properties were on the market at a discount?

• What makes sellers decide to price edit?

• How many properties are sold through private treaty?

• Why the Australian market is made up of thousands of micro markets.

• What macro data should home buyers be looking for?

• How many properties are currently transacting?

• Is the fear of a second lockdown in Sydney impacting the supply of property?

• What are buyers searching for in their future property?

• What areas are people searching for the most?

• What data is Domain harvesting from you?

This weeks Dumbo:

• Falling in love with a property that has transacted several times in a short period of time

RELEVANT EPISODES:
Episode 123 | Martin North
Episode 125 | Damien Cooley
Episode 133 | Alice Stolz

Domain Reports:
House Price Report
Healthy Suburbs

HOST LINKS:
Looking for a Sydney Buyers Agent? www.gooddeeds.com.au
Work with Veronica: https://linktr.ee/veronicamorgan

Looking for a Mortgage Broker? www.wealthful.com.au
Work with Chris: hello@wealthful.com.au

Send in your questions to: questions@theelephantintheroom.com.au

EPISODE TRANSCRIPT: 
Please note that this has been transcribed by half-human-half-robot, so brace yourself for typos and the odd bit of weirdness…
This episode was recorded in August, 2020.

Veronica Morgan: You know how much we love to dig into property data and make sense of it. Well, if you enjoy it as much as we do, then you're in for a treat today. Search data is fascinating as it gives us a glimpse into the behavior of property buyers in real time and price data can give us a snapshot of what sellers are thinking. And this behavior shows how buyers and sellers responded to changes in the economy. And they don't always neatly line up with what you'd expect from reading their headlines.

Veronica Morgan: Welcome to the elephant in the room. This is the podcast where we love to talk about the big things in property that never usually get talked about. I'm Veronica Morgan, real estate agent buyer's agent cohost of Foxtel's location, location, location, Australia, and author of auction ready.

Chris Bates: And I'm Chris Bates mortgage broker. Before we get started, I need to let you know that nothing we say on here can be taken as personal advice. We always recommend you engage the services of a professional.

Veronica Morgan: Don't forget that you can access the transcript for this episode on the website, as well as download our free fall forecast report, which experts can you trust to get it right? The elephant in the room.com did I, you,

Veronica Morgan: When we interviewed the editor of domain, if you wakes back, we gained some great Intel about how Australians are changing their search criteria for property. And when we ask questions about how the data is collected, she suggested we talked to Nicola Powell. And so today we are. And when we ask questions about how the data is collected and also how domain uses this data to write suburbs for livability, she suggested we talk to Nicola Powell. And so today we are dr. Nicola Powell is a senior research analyst for domain group. She's a leading force behind domains, data reports, and a well known property expert featured regularly on broadcast and in print media, as well as domains, media channels, Nicholas analysis drives the agenda for the nation's property conversation. And today for hours, she's known for a succinct, easily understood commentary style and in depth analysis of market trends. Perfect for us here on the elephant. Thank you so much for joining us today, Nicola.

Nicola Powell: Thanks for having me.

Chris Bates: Hi, Nicola. Great to have you on here. I just read an article literally overnight around Discounting that you've just released. Can you give us a bit more insight in terms of what your research has just fans and you know, what's happening out there?

Nicola Powell: Yeah, so the price at it piece is really a different way to cut data. You know, we're always trying to look into, you know, as you say, search behaviors, what's happening in terms of the sound market and having a look at it through a different lens. And we often hear about discounting. So discounting that sold price versus what that original asking price is, but there is an element of lag in this cause obviously some of that sounds data doesn't in because it's government Sales collected. So it takes some time. What we've done is we've actually looked at live listings, so live sale listings each month. And how many of those listings have had their asking prices, revised downwards? The great thing about this piece of data is it really is a leading indicator of price growth, and it really gives us an on the ground lens of sentiment what's happening each month and allows us to kind of see where the property market is going.

Veronica Morgan: This is really interesting because we've always thought of price, data or price discounting as you know, as you say, the sour price versus your original asking price, but you're basically saying you're measuring it as it happens because obviously the discount happens before it's sold. Right?

Nicola Powell: Absolutely. I mean, you see a home coming onto the market with an asking price or, you know, if that home isn't shifted within, you know, three week period, perhaps it's a menu, you go back to look at what their asking price is. And I think during this period of time where we're seeing prices fall we are seeing more listings being discounted because I think when you continue to see the change in the market, we see it through that price at, at data. And what was fascinating is when we saw, obviously COVID-19 initially hit Australia. What we saw was almost an instant bounce in discounting over kind of March and April and what we've seen. And that was unanimous across all of our capital cities. I think the level of price edits was different across the capitals, but it showed that really no capital city was immune from the, from the impacts of COVID-19. But I think what we have started to see is even though those price edits remain elevated over July, most of our capital cities have fallen from the peaks that have been seen in recent months.

Chris Bates: So I'm looking at the data on the report and we'll put a link in the show notes. So I think it's a really interesting piece and it's just coincidental that we have you coming on the following day. But you've got that. It was around roughly say 5% of listings where, you know, across all the capital cities were dropping their prices through 2018 and 2019. And then they all jumped up to say 10 to rough, up to 15% in this last sort of three to six months when you did this report, did you backdate that and actually look at live listings, you know, for the last couple of years, or was that the sole price that you did that on?

Nicola Powell: No, so we, we backdated this cause obviously we capture data all the time and yeah, that data is stored. So it's a, it's a capture of, of, of a point in time. So yeah, it was backdated and you know, it's comparing like with like across each of those. Yeah. It's nothing about the souls. It's purely about the asking and, and this data set, I think we've got about three years worth. So it was really interesting. We captured a bit of that downturn, 20, 20, 19 downturn in Sydney and Melbourne. And when you do say correlation between price movements in Sydney and price edits they are correlated. So it really gives us that that idea of where prices are going to go.

Veronica Morgan: That is very interesting, actually the leading indicator and the fact that that correlates. Cause I wonder whether you know, obviously it seems to be the asking price is really a reflection of optimism of vendors and the sell price is really a reflection of the optimism of buyers, right? So where they diverge that showing that there's not a lot of confidence in the market from buyers, but where they sort of meet is where buyers are extremely confident. Then those typically tend to be quite confident in that their property is worth more than everybody else's anyway. So at what point does it sort of, because I would imagine that every peak and trough of the market is, is somewhat, like you say, there's a leading indicators, quite fascinating because there's always a point at where vendors just slightly push themselves outside the reach of where buyers are repair districts themselves or where affordability allows. So is that sort of, does it really show that prices are falling or just that vendors have been overconfident?

Nicola Powell: You made some really good points there. I think we always see and level of price edits occurring in the market because I think finding that sweet spot for pricing you know, can be challenging if the market is rapidly rising or if it's falling. So we always get some level of discounting, but what is very clear is during periods of weakness that level of price edits does bounce. You know, I think when you compare it to say July of last year, you know, when you think about what was happening in July of last year, the trough of the market had been hit in Sydney and Melbourne. And we were starting to see the recovery and pressurize. It was sort of turn around in clearance rates, but even at that point in time, when we'd already hit the trough, when we were starting to grow in terms of price, there was still a 5% level of price edits occurring in Sydney and in Melbourne at 3%. So there's always this level of discounting where S as you said, Veronica, you know, you've got those sellers that are kind of missing the Mark. They've kind of overshooting what a buyer is a wanting to pay or kind of that market expectation. But I think when you continue to see prices fall and that weakness month on month, it does it's very telling in the data and it's very telling in this kind of data capture

Veronica Morgan: Interesting also, because of course, with M E R you with the auction campaigns, there's no asking price, right. But obviously in the backend of domain agents have to put in a reign so that it's searched, you know, it basically the property will put up or turn up in the right searches. Is that in some way captured here, because I would think that that's sort of that goes the opposite way. Doesn't it? Where they're under-priced so the level of property that be passed in and therefore put on at a price after auction goes up too, and I would imagine that the pricing might vary according to the information that's been captured by the agent from buyers through that campaign. But so how does that sort of come out a wash out in this data? The fact that you've got higher or lower levels of past in property?

Nicola Powell: Yeah. So it's like with discounting price edits, is it the same auctions are hard to capture because obviously that price range and I mean, even though, you know, in Victoria, you have to disclose a price that is within nothing, it's the 10% range from memory. And legally you, you have to, you age, it has to, it has to input that. But I think in terms of capture, we, we perhaps don't capture as much of the auction data as we would perhaps like I think we dis discounting in particular is solely on private treaty sales asking versus sold. And I think, you know, this would be much more of a greater reflection on sales by private treaty. And, you know, we have to remember that. I mean, we talk a lot about auctions and the auction market, roughly only 30% of sales are sold by auction. The rest are private treaty and that's that stat really is for Sydney, Melbourne and Canberra everywhere else. It's highly dominated even more so by private treaty sales. So it's a bigger capture of the overall market. And the reason why we like talking about auctions is it does again, give us another different type of lens on market sentiment.

Veronica Morgan: But the problem is with that is it's a geographical thing, right? So in a Sydney and in Melbourne in particular are much more heavily skewed towards auction than the outer areas. That's, you know, and I find that just, you know, they're just the sheer majority of property does cause where my office is in, in Sydney for instance, that it's very rare that we come across a private treaty property of private charity listing. So in a way though, that's becomes a problem, doesn't it? Because the outer areas will perform differently to any areas anyway. Right?

Nicola Powell: Yeah, absolutely. I think there is one thing when you look at the data is that we always talk kind of macro that big city feature gives us a broad understanding, but you know, it's definitely is in the detail. You know, it's all about the areas, the regions and the suburbs. And you know, we capture, we dived into the areas across our Capitol, across Australia actually, and also the suburbs to allow us to see how they are performing differently and even say, I mean, we released an auction report card each month to dive into Sydney, Melbourne and Canberra, which are auction centric property markets. And we dive into those different areas. Cause as you say, Veronica, you know, you hit the nail on the head. We do tend to see more inner urban areas are dominated by auction the auction market more so than compared to the outer outer areas of our cities. Yeah. Today, another

Chris Bates: Article a few months ago around distress selling where you said you couldn't really see any signs of distress selling in the market, have you, that was like three months ago, have you seen that there has been an increase in what you can see is distress.

Nicola Powell: So we are due to redo this. We're actually redoing this analysis in a couple of weeks, but I mean, we are tracking it. And really there has been no real uplift in distressed or urgent setting. And I, I think, you know, this is definitely an important metric for us to continue to track because I don't think the risk at the moment is too great because we've obviously got measures in place to help peoples' through this very economically challenging time. You know, you've got the ability to pause mortgages, we've got a job, keep a job seeker. So it's helping fund, you know, it's helping peop homeowners financially. I think the risk comes once the ability to pause your mortgage stops. And that's going to be the key period of time to see if we see any uplift in distress selling because the biggest risk to prices, if we is, if we see an influx, a lot of listings at the same time that are distressed or they're urgent because that's when we start to see big price discounts being offered because they need to offload their property.

Nicola Powell: And obviously that in itself, if we've got lots of listings at the same time really is troublesome when it comes to kind of prices and really shows that there, there could be weakness at the moment. We haven't seen any material uplift. You know, there are pockets of areas in Australia that have a higher level of distress selling, but I think they always kind of tend to have in recent times. But as a impact of COVID at the moment, there's really little evidence to suggest an increase,

Veronica Morgan: But there are some areas where there's a lot of stock. Like you, you know, in some areas there might be 12 months worth of stock on the market at the moment. I mean, have you done any analysis, I guess, to where you can see that the, that level is actually starting to rise in specific geographies, geographical areas in terms of the listings, you mean?

Nicola Powell: Yeah, yeah. I mean, it's, the competition is high. Yes. And you know, that goes down to that kind of micro aspect as well. I mean, you know, there are pockets of our cities that have a heightened level of supply. I think Brisbane CBD is a prime example of that, where they've had a number of years of elevated unit developments and an increased supply. And that has really weighed heavily on unit prices overall for greater Brisbane, but more so in that, that city, in a city area, I think at this period of time, we starting obviously to see that shrink. And that's been happening for a while because obviously we've seen developments the approval was declined. Development starts a decline in, in Brisbane CBD. But yeah, it is a great example of an area that if you were a vendor trying to sell 'em during that period of heightened supply, it would be very challenging. And I think that's an example of some of those areas where we all there are always going to be areas that have a greater chance of having a distressed sale versus other areas.

Chris Bates: Yeah. What's sort of the data that you love to use when you're looking at kind of property and what access points do you think that people should be using when they're trying to understand property better?

Nicola Powell: Look, I think my favorite water we've spoken about it in depth. The surprise said it's one, because this is a new, new ni unique data set that we've produced this year. And it's just a different way of capturing it's an on the ground lens. You know, I think there's a variety of things that I personally look at it's it's about, you know, around that sentiment consumer sentiment as well. You know, feeling of how people feel about the time divide welling. And I think, you know, the most recent index that was produced we obviously saw consumer sentiment tank. And when you look at, I really like to look at the question of around is it a good time to buy a dwelling? And that declined over the months in the most recent August release. And he actually is now well below that decade average, but again, you know, I've said it before. It's definitely the detail. When you have a look at how the different States are performing you know, there's different outcomes for different States. And actually that decline was driven by Queensland. There was a very steep decline in Queensland around that time divide dwelling, but all other States and all the major States showed an increase.

Veronica Morgan: It is interesting, isn't it that you know, that, like you say, that there was in the detail that these sort of top low top line numbers and statistics can be trotted out and that's usually what makes the headlines. But underneath that you go, well, because on the ground we often say, hang on a minute, we gotta get clients saying to us, but the market's falling haven't you read the, you know, the front page, but why is it that that property is competitive? And it looks like going to be eight people reached it for auction, or I have to consider, you know, what my top dollar is going to be. Can I get a bargain? And I'm like, well, if you hang around and looking for a bargain, when you're looking at eight grade property, you still know you're not gonna buy anything. You know, and so then you watch seven other people that are registered for it and maybe three or four of those compete quite heavily for property. And it's like a flies in the face of supposedly What consumer sentiment is.

Nicola Powell: Yeah. That, that is almost an issue of how, you know, Australia as a whole communicates this micro level of data and, you know, for any buyer or seller around there, if they really are just honed in on the area that they are buying or selling in. And that's where are important that, you know, we can push out kind of big pieces of research, looking, hearing our capital cities. We also do a drill down into the regions and we do do suburbs, but you can't represent every single suburb in a single go. And I think that's challenge that we have. So it's kind of how, how do we make that data accessible? And, you know, if I was about, you know, I, I am a buyer, I have been a buyer, you know I've most had actually recently bought a property. And, you know, when I was on that journey, I look at data every day. But the thing that I did, the research that I did was I was looking at the listings, you know, how quickly were they transacting? What was the be, you know, asking prices? What was the sole price is being achieved? How many of those are being sold by auction to help me understand my micro area, that I was transacting.

Veronica Morgan: That's such guy, you say that because you know, quite a lot. Yeah. We, we will talk to our clients about, and you have to take that as a snapshot. I think an absolutely publicized public. You said that, you know, the here's a data scientist that has access to all the macro and right through to micro given that you've got such a an interesting data set. And we'll talk about that shortly, but, you know, you've got access to everything and yet you drill down to the micro when you're making a, this individual decision, this is what we're always saying to our clients. It's all well and good to understand what's happening in the Australian property market remedies around that term. But you know, the fundamentally you can get over, you know, you can overanalyze and you get a completely overwhelmed with data, which sort of leads me to a question. And, you know, maybe it's a bit cheeky, but what is the point of all this macro data and the property market in Australia?

Nicola Powell: Look, I think it gives us is that big picture lens, and we have to have that big picture view of overall what's happening. So for example, so say if I was looking to sell my house I'd be looking at a big picture. What was happening in Australia economically what was happening for prices for my city overall. Now, if you're a seller, you know, your ideal is you want to sell it at the peak of the market to get as much as you can. Yeah. That's very hard to pinpoint, but I'd look at that big picture to help me decide when I was going to list my home for sale. And then I would drill down into the micro because I think, you know, there are so many sub Mark. I mean, we talk about it a lot at domain. There are so many sub markets in Australia. There are so many, micro-markets, we're seeing it at the minute, you know, in terms of the impacts of COVID those areas that are holding up. Well, those areas that are being impacted more so you know, even the rental market to showing that disruption to a different level. And so micro is very important, I think for your everyday buyer and seller,

Chris Bates: Obviously there's a, been a big home builder initiative that the government has released. Have you seen the way that people search and the way they pick topic property that people want and are looking at, has responded to that government stimulus and changed their behavior?

Nicola Powell: Yeah, I think the home builder one is an interesting one. You know, in our latest price report, we saw one of the areas that was still growing in price in Sydney. It was actually in the Northwest. And obviously we know that that area has been a huge kind of development area. So, you know, you wonder whether we'll, will that continue because off when you say growing, what do you mean in terms of price gross? We're still recording increase in price over the June quarter, which kind of bucks the trend of the majority of the other areas in Sydney. Now, you know, when you look up say, where can you buy a you know, a blank canvas, a block of land in Sydney? You know, there's very few places that you can do that you know, Northwest is probably one of them and also buying a devs. You know, you're pushed to some of these more outer areas. I I'm expecting, we will probably see an increase as months to con in those search behaviors, in those more outer areas.

Veronica Morgan: That's sort of interesting because of course, yeah, When you've got an area that's sort of newly redeveloped, the new stock tends to sell shimming, it sort of roughly the same size as the old stock, it will sell for higher price. Right. So it's hard to, I guess, how do you sort of pull that apart to say, well, there's actual price growth versus price growth by virtue of the type of stock that's been sold, that's brand new and being sold at a premium.

Nicola Powell: Absolutely. So that that's, that actually goes back to the other question that you were asking, you know, why do we do the big picture? The big picture is great because it allows us to give a really robust price. So there is a method called a stratified median and that's groups properties or suburbs based upon their historical performance in terms of prices, they're bucketed into kind of different levels of pricing. So it allows us to give a really robust, which takes away what I'm saying is it takes away any of that noise that you were saying, you know, about, you know, developments it achieving bigger prices again, when you get down to that micro level. Yeah. It's challenging. And you have to compare like with like, and that's why when, if you're a buyer or a seller, it's really important to do that research on, you know, what's being transacted within your area. But I think, you know, we, we use a medium price. So when you get down to that region level, it's still a fairly large capture of data sets. So it helps to take away some of that noise. Yeah, you're right. You tend to see developments do achieve a steep

Veronica Morgan: And the median does rely on a lot of, a lot of transactions to sort of make it somewhat reliable. Doesn't it? Because, you know, it's like if you're in an area such as say Balmain where my office is, and you've got little tiny workers cottages, and then you've got, you know, Harbor front homes, and if you get a lot of Harbor Harbor, front homes that sell, it makes it look like everything's going on, but the price and prices could actually be falling and that happens. So,

Nicola Powell: Yeah. And that's where, you know, we, from our data perspective, we have to take, you know, we take great care in, in things like that, because, you know, you, you have to be careful that it's not a reflection of the types and type and quality of stock being transacted. And that's why, obviously the more sounds you have the better risk. And when it comes to say, you know, looking at suburbs, it's why you have to have a much greater capture of data. So, you know, suburbs generally most statistical bodies use a 12 month capture of data, compare that to the 12 months prior. So in that sense, you know, there is a bit of a lag when you get down to that micro level of price prices, because capturing such a vast amount of transactions, you know, one that transacted Maine, maybe in January versus one that transacted in December and the market may have moved. So that's, again, another argument why that bigger picture is actually really important to continue to track and monitor, to give you the idea of what's happening then more so at the granular level, which is harder to pick up. Yeah, absolutely. If you like

Veronica Morgan: Hearing here, please share this episode with others, you feel would benefit. And while you're at it, why not leave us an iTunes review five stars, please, every review helps make it easier for other people to find us and hear what our amazing guests have to say. We love hearing your questions and we're planning more listener Q and a episodes. Please send your questions in. You can send them via the website, which is the elephant in the room.com.edu or directly via email to questions@theelephantintheroom.com.edu,

Chris Bates: Have you seen a dramatic drop across the cities? And I do feel that a lot of properties are selling off market, or do you have access to that sort of data?

Nicola Powell: So not, not to the off market data, but I think, you know, one of the things that we saw was a pullback in listings. Um you know, as COVID here, we saw all back in listings you know, in the weeks that followed that locked down one, now that in itself really has helped to shield prices from large falls because those that didn't have to transact during lockdown one just paused and waited. But what was quite remarkable was the rebounding listings. You know, once we saw restrictions and sentiment increased now Melbourne Victoria is going through that second wave, obviously because of that stage four lockdown listings of pullback again. But you know, my view on this is that it is a good thing, I think for the market in terms of helping to shield prices from really significant falls. And obviously that's good for the overall economy as well because, you know, nobody wants homeowners losing a significant amount and the value of their home is obviously detrimental to the overall economy and, you know, our own kind of household spending and, and financial. Perfect. Is that what you mean? Yeah, well, we'll also,

Veronica Morgan: I think, you know, what we have seen or what that does show is that people don't have to sell, if they can actually take their property off the bucket or pause it, then they're not under pressure. So I guess that's one thing it shows. But the other thing that I've noticed certainly in our area and anecdotally, I've sort of had this same conversation with a number of agents, both buyers and sellers that really stock started sort of drawing up certainly in, in Sydney back in 2016 and it's never really picked up at any point. And so we're sort of off a fairly low base anyway, when we say stock listings, but I wonder, does domain actually compare listings data, your listing started to transaction data to actually then try to work out you know, what the true picture is in terms of stock levels.

Nicola Powell: So you're talking around kind of the turnover of, of stock what we're seeing.

Veronica Morgan: Yeah, because there is an anecdotally, I've got agents saying to me, Oh yeah. You know, 20 to 30% is, is transacting off market. And and I sort of at first disputed that, but over time, I've, I've seen that that has, I think is true. And and it's coming from enough agents that I, that I think that that is the case. And I think too, that, so covert has obviously given people a re or vendor or potential sellers, a reason to put their property on the market or off the market, if that makes sense on the market off market. Because you know, they're not paying for advertising the right show for exposing their property. They dip the toe in the market. If it sells, they're very happy. But it is sort of hiding the fact that there are listings out there it's just not being advertised.

Veronica Morgan: And it's hiding the fact that if you're getting transactions and prices are holding up, there's actually more robust market than people are thinking. So that's why I wonder if you're comparing those two figures to say, well, how you know, because there's always saying, well, the reason that prices are holding up is because listings are low, but I've, I've actually done some of my own analysis on this. And it's look, it's minimal in terms of, I've just randomly chosen some areas and some property types, but in many cases, transactions have been holding up or potentially even increasing through COVID. So you know, over that period. So that's why I wonder whether, you know, your overlaying that with at any point.

Nicola Powell: Yeah. So we do look at turnover the same ways, you know, the sales transaction, particularly if we're starting to now kind of, you know, see off market transactions, the thing with South transactions that takes a while for obviously that data to be collected. So we don't, won't have a full picture lens into your kind of all those government you know, the government data is then collated and collected. So yeah, we do look at that turnover and I think, you know, what, we, there are definitely some areas that I, and I agree with you, there are definitely some areas where I think turnover, you know, kind of listings versus the transactions have actually, you know, it has increased, but there are other areas where it's kind of declining. I mean, you know, my lens on say, Sydney, it looks like turnover has slowed down and before, but that's again the picture. And when you drill down to the different areas, there'll be different stories that are unraveling across them.

Chris Bates: Hmm. Do you think that obviously Melbourne did lock down so you can imagine that listings are going to go through another drop, like they did in the first lock down. Do you think that the mindset shift in Sydney at the fear of a second lock down is already starting to play out where the less listings, you know, you've mentioned Veronica talking to agents that age, it's just now starting to find the buyers, the sellers are starting to want to sit on them.

Nicola Powell: Yeah. I mean, so, you know, whether listings will fall in this second lockdown, is that what you mean?

Chris Bates: Oh, just the fear of a second lockdown down. Like, you know, obviously Sydney's on a knife edge really, you know, we're just holding on that, you know, another one, a couple of outbreaks or one bad day and you know, the funeral kick off again. You know, in that environment you don't want to gamble, you don't want to put your property on the market and then a down to happen when it's on the market or you sell and then a lockdown happens and then he can't buy. So just that fear of potential lockdown potentially stops people listing their property. But I don't know if you've been able to see that listings are starting to pick up and then that fear is stopping people listing.

Nicola Powell: I, it is the case. So we have already started to see new listings in Mel, greater Melbourne you know, our easing we had seen them rebound pretty strongly from that first lockdown. But yeah, I think it's, it's likely that we will continue to see listings shrink. But I think, yeah, I think it is, you know, that, that kind of fear of unknown. And I think, you know, there's always going to be transactions in the market because there's, we all need a roof over our heads. And some people are going to be in that position where they need to transact. So listings are still going to be there. Transactions are still going to going to occur, but, you know, I, this second lockdown, we're already starting to see a pullback and I, and do anticipate that to continue.

Nicola Powell: But I would say one of the things that has been quite interesting in the response of lockdown, two compared to lockdown. One has been the uptake of virtual auctions. Now during lockdown, one Sydney had more virtual auctions than Melbourne and Melbourne has more auctions than Sydney consistently, historically about this second lockdown, what we've seen is there's been a much greater uptake of virtual auctions in Melbourne. And I think maybe it's the fact that I'm transacting in that virtual environment. People are becoming more familiar with agents or have see more experienced in it. So yeah, we've seen those online auction success rates actually be quite a strong in recent weeks compared to that one period.

Veronica Morgan: And that is really interesting. We interviewed Damien Cooley a couple of months back actually, and specifically to ask him about how that transition from, you know, onsite or in rooms to online went. And he was basically saying that, you know, it was a lot of resistance, a lot of withdrawn listings, a lot of agents didn't like it vendors didn't like it. So, and even auctioneer's had to learn new skills cause they're actually performing to a video camera and not to, not to a live crowd. But so he was sort of saying that he couldn't see a future really where online replaces on site, but he could see sort of a, more of a hybrid thing happening. But it is. And he also did say that there's a a geographic slash demographic skew towards, you know, away from the older, older generation, less likely. And I guess that stands to reason to to want to plan a digital platform versus millennials. But it is interesting to hear that, I guess maybe as people have got a bit used to it, or they've got used to COVID and restrictions and thinking, well, we could be in this for a long time, I guess they're sort of just saying, well, okay, look, let me deal with it. I mean, would that be a fair thing to say that people are just deciding that look at, this is the only option now?

Nicola Powell: Yeah, I think, I think that is, I mean, I think in lockdown one, what we saw and it's exactly what Damien had said, is this a massive spike in oceans, withdrawn bounced to record highs historically, and you know, we've got a few decades of data auction data. So, you know, the response was unanimous. It was very clear that vendors really didn't want to sell in that auction environment. Now, as lockdown two was announced, we did see again a bouncing withdrawn. So yeah, there is still a segment of those sellers that aren't comfortable with that virtual environment, but the withdrawn bounds was nowhere near what we saw locked down one. And we are seeing, we've seen some great outcomes for virtual auctions. And I think, you know, I do think people are becoming more comfortable. I think it helps to perhaps break down some barriers when you looked towards say markets such as Southeast Queensland, where you have a lot of migration from Sydney from Melbourne. I think, you know, it's never going to take away the, you know, inspection in person, but I do think there is a place for virtual options maybe, you know, in the future it will be a hybrid of an onsite, but it's also then you know, virtual as well for those who are purchasing interstate to actually be part of that auction and actually, you know, have that transparency rather than having to be onsite to beat. Typically if you've already inspected the property,

Veronica Morgan: It's quite interesting last week actually participated in online auction for art. And we went and had a look at the pieces beforehand a little bit. I hadn't actually thought about the parallel to right now. And there was an auctioneer and I swear we were watching for four hours basically because there were a few pieces that were just sitting. He would've, he would've still been going, he must've been apt, Absolutely shattered, but it was yeah. Basically doing a live performance to their staff, you know, and and, and people were bidding online, but and I be curious, maybe I need to follow up with them to see how were the results compared to what they would have expected in previous you know, in the previous format, which has a whole bunch of people sitting in rooms with it.

Nicola Powell: Yeah. And I know the exact auction house that you're talking about because it was Sunday and I have been present at one of those auctions in person when they used to person. So I think that would be a great comparison to make. I, I actually wonder whether for them auctioning virtually as helped to open allowing people to dial in just for that particular auction. And I expect that they've probably achieved greater outcomes would be my,

Veronica Morgan: I have to follow them up. We have quite an interesting one, that one I'm curious, you mentioned earlier that, you know, you've got access to all this data. That's basically being stored. You know, it must be fascinating for data scientists just be like, you know, kidney candy store, what, what are you, you know, what are you most excited about when you look at this? So, you know, what you have or what you can do with it? I mean, what are you able to tell us what your next project?

Nicola Powell: Yeah. So we've got a number of things in the pipeline. So one of the things is that we're really diving into kind of search behaviors in Victoria, you know, how have they changed during COVID because we saw kind of search interactions during lockdown. One increase, you know, we saw the activity in that interest in property increase. So we're really trying to understand, so what a buyer property searches looking for on their journey, you know, and into that kind of micro area, in terms of that price point in terms of what they're looking for to really kind of understand one of the other pieces and we're launching this piece next week is around kind of keyword searches as well. Keyword searches has been remarkable. A home office has seen an extraordinary increase in searches. So that's being released next week and also we will be relooking at our distress selling and also kind of you know, for me, I want to dive into what we can expect post COVID and look at some of those markets that have seen, you know, a strong rebounded listings, what happened to prices? You know, what did that mean for our buyers and sellers?

Chris Bates: I was going to ask you that exact question. Cause we spoke to Alice a few weeks ago around the search data and key words. And I thought that was very fascinating how a home office and, you know, four bedroom and just behavioral change, a big shift to say six months ago. Right. what, I guess I'm a bit fascinated in is understanding where the wealth flow, where the property buyers or what their buyer preference is again, to change post COVID in terms of location. You know, there's a pressure to live around the inner city because you had to commute five days, but you know, how much, how many buyers, you know, their suburb, you know, who has got a, looking at the, you know, Western now going to look at the, you know, South, you know, North of Woodland wrong, or they're going to look at the blue mountains, et cetera, have you got any insights where you've started to see, you know, people that would have looked at say the inner ring, but now they've changed their behavior. And they were searching lots inside that, you know, where it's, but now they're searching lots in central coast, for example. 

Nicola Powell: So I do think that the pandemic has forcibly obviously introduced a remote work and I almost feel like it's, it's supercharged a trend that would have happened in say 10 years time this working remotely it's here. I think for many, it will be here to stay, even if it means that, you know, you're in, as you say it in the office three days. And when you think about purchasing a home, traditionally our workplace or our you know, childcare or schooling has really been an important factor of where we purchase. And I do wonder whether we are starting to see a a change and the workplace is going to be a less important factor. I think regional areas could be the winners from this. And as you say, kind of living on the urban fringe, I think, you know, anybody that has perhaps been in a, in a urban apartment will be during a lockdown, we'll be, you know, yearning for that kind of outdoor space you know, a larger space.

Nicola Powell: And you have to go to the urban fringe to be able to afford that terms of areas. So when you look at, say search behavior in the first quarter of this year, so kind of before COVID, and then compare it to the June quarter. So really kind of looking at the pandemic here, what's unanimous about where we were seeing people search. We did see a rebound in both searches towards regionals and towards capitals, but for Australia overall where was he gonna say? Sorry. in new South Wales, for example, we saw regional areas increase in searches by 8%. And when you then drill down into the, you know, the, that more micro lens where we saw the biggest increase in searches. Now, when you look at kind of pre and post COVID, you have to be careful with this data set because you then get seasonal areas.

Nicola Powell: So ski areas that you would expect to be, you know, things like parachute, you would expect to see that quarterly increase. When you haven't looked at say the annual changes, it's very interesting that I'm saying the top 30, most of those areas are regional. Brighty Island in Queensland was one Albany in WUA Harvey Bay in Queensland Peterborough in South Australia. There were lots of WOA areas as well, which I think is telling in terms of perhaps where we could see a potential growth, there's been lots of conversation around the rebound in WUA. I found it interesting that the search behavior is showing a lot of rebounding wre areas, but I think, you know, there's lots of regional areas, Sandy point in Victoria very few Launceston in Tasmania, very few city areas.

Chris Bates: You don't know if they're active, they're just dreaming. Like you actually don't, you know, lots of people just, you know, if, just sit on the internet and look up property every night and they've got, they've just got an interest, they might own a property in that area. So they're just constantly watching that market. And is there any way that you can kind of cut your searches and say, we've got a thousand people searching in suburb 500. We know that they're just living in the area and they're just checking prices 300, a dreaming 200 are actually bots.

Nicola Powell: Yeah, absolutely. So that's actually a project we're working on and we call them high intent bias. So it's being able to determine you know, whether that person, your, you know, that perspective potty, searcher is really that high intent. And, and that's kind of through what they actually do, how they interact with the site, you know, whether they're looking at the contact details of the agent and or whether they're dreaming and just kind of, you know, viewing the video and the, the images, for example, interesting.

Veronica Morgan: And the w way, what I'm interested in there is when you say a sort of a resurgence, is that from people outside WY looking at WWI, or is it people within Perth looking at regional areas and w w way

Nicola Powell: This is all searches. So it hasn't cut by kind of where the location has come from. But I think, you know, was been a really interesting one because I think, you know, the, the, you know, a little bit of a turnaround in resources is going to benefit areas like WUA we're seeing a rebound in some of those regional towns particularly attached to mining. You know, you've got record high kind of gold prices high prices for iron ore. And I think for some mining sectors is actually meant that the they can increase employment base, which obviously obviously puts increased housing. And I think as well, covert is also from perhaps another curve ball. I mean, you know, with our inability to travel freely, I think for those fly in fly out workers, what it may mean now is actually they live in these regional towns rather than flying in and flying out. So their family then locates with them. So I wonder whether the, you know, we're actually going to see different trends of how these fly in, fly out workers live to be, to have that kind of, you know, work life balance.

Veronica Morgan: There's people that invested in mining towns. They might actually finally get payday.

Nicola Powell: Oh, yes. I mean, some of these mind counts really have struggled really, really young, the falls have been substantial. But even for Perth, you know, multi-year downturn, there's been glimmers of a recovery. I mean, price trough was hit last year. I think COVID has thrown another curve ball. So I think, you know, any kind of resurgence may have been delayed by coveage, but I mean, I think WWII in itself or purse is definitely holding up much better than our other, some of their other capital cities.

Chris Bates: Interesting. What a couple of buyer's agents I'm talking to over there. So I think that would be a one to come up. So I'll organize that just first data in terms of actually privacy. I know like some websites, like, for example, Kogan and other websites, they'll, you know, say we've got a new someone buying a laptop and they're in, I don't know, Bryson Victoria, let's say I'm at domain, actually looking at the IP address and kind of able to track that we're getting a lot of people searching in this area that live in this area, or they're in that area at the moment. And they're looking for lots of property in this area. So you can see that sort of people wanting to upgrade a lot in their area, or you can see people in one suburb wanting to move to another suburb a lot, like is Damon looking at that sort of data?

Nicola Powell: Yeah. So yeah, we'd look at where searches are coming from and where they're going to, so yeah, we have, we can slice and dice the data in so many different ways.

Veronica Morgan: So I'm interested sort of the flip side of why, where buyers are, or where people are searching. I E looking for bigger places and looking for more space, which is, seems to be a bit of a byproduct of being locked up in your homes. What about the smaller apartments? What is happening with demand or interest in one bedroom apartments or even two bedroom?

Nicola Powell: Yeah. So, I mean, it's not something that I've dived into in depth in terms of comparing that kind of bedroom number. What I think is interesting about, you know, apartments is, you know, we do, when you look at say the disruption the COVID has made the biggest disruption has been in the rental market. And the biggest disruption in terms of bedroom number has been one bedroom apartments, I think, you know, and that obviously would have flown effects on the sales marketing and demand for one bedrooms. We do see a lot of investors buying apartments, buying those smaller apartments off the plan, a new devs to, to lease rent out. And I think, you know, in terms of rental price falls, one and two bedrooms have seen the greatest impact that again has been located in our inner city areas of Sydney, Melbourne, and Brisbane.

Nicola Powell: You know, the, the destruction to price has been quite great. I think from memory, it was around 5% drop over three months which is very hard revision. And that's because, you know, we're seeing as you, as we've just spoken about, I think our behaviors change out what we want change, obviously for the rental market, it's being impacted by fewer students foreign students living in those one bitters, which are, you know, have a high concentration in those CBD areas. So I think, you know, we could eventually see that have that flow on effect. I think for the sales market,

Chris Bates: The unit markets are definitely struggling because, you know, typically investors that bought them because, you know, a home buyers at only certain you know, fits a certain demographic, you know, whether they're singles or divorcees or et cetera. So, you know, maybe 80 or 90% of one bedroom apartments are investors and the investors are buying and you know, and they're selling because they're more likely to sell when times get tough rather than a home buyer, because you know, the home buyer still needs to live somewhere. Right. So it's going to be a thing to see what plays out there. Have you got a property Dumbo for us?

Nicola Powell: I certainly do. So this is somebody that I know very well, so they may hate me for telling this story, no names, no names, but so they purchased a property. And the property, a warning flag for me is if a property has been transacted a lot of times in a really short space of time fitted into that category. Now the open homes were only at nighttime in the evening, you know, when they down and they thought this was their first home and they thought nothing of it, and they obviously fell in love with the home until they moved into it. And they realized that the home had no natural light, which is very important. So that was the reason why it had been transacted lots of times. And that was the reason why that they only had open homes in the evening. And they, they then went on to sell it pretty quick too.

Chris Bates: Oh, go ahead. Financially. Kind of get away with it. Not too bad in terms of a similar sour price.

Nicola Powell: No, they, they came out lower. But I think for them, they just couldn't live there anymore because you know of the lack of light coming into them.

Chris Bates: Yeah. You don't think about it cause you fall in love with a home and you go at two o'clock and that's when just the sun hits the back deck and yeah. And you think that it's always going to be like that. I just, yeah, it's such a funny thing, isn't it? And then even when you're trying to book a private inspection, the agents are very careful. I imagine Veronica, you see that direct you, Oh, sorry. I can't do 9:00 AM. We'll have to do two o'clock. And it's like, well, that's the same time as I started last. I think that happens as well.

Nicola Powell: Yeah. It's so important to view at different times of the day. You know, I think, you know, you forget you, if you live in, say really need to a school, you forget how busy school drop off from pickups. It's crazy. And I'm not sure I'd want to live that close, you know, within a school drop off zone because he is a very crazy period. I'm in it every day, dropping my own kids off. I wouldn't want to live near a school drop off zone. Oh, driving stuck in traffic every day, trying to get an in and out of your own driveway, you know, Jovi, absolutely bonkers. And another one is beach suburbs. You know, a lot of 'em in summers is massive influx of people and you can never get a parking spot anywhere. You can't even run up the road, get some milk because you can't, you can't park. And you know, so everyone says, Oh, I want to live close to the beach. And it's like, that's cool. Just make sure you got a double garage and make sure that you don't have friends over in summer.

Chris Bates: Yeah. It's funny. Cause then all the rat runs happen as well at certain times. So, Oh, it's a beautiful quiet street. You know, there's never usually traffic. Anyone goes down the main road and then I'm like go to the back road, the local roads, which are around and you run up and down main happen a lot. Right. They all cut through those, the few streets everyone drives down. So yeah, it's a, it's a very good Dumbo to be honest because you know, there's lots of learnings there. I think the transacting of the same property, lots, and that data's easy to find, like you can just one search and you can see that it's sold four times in the last five years. And I, I probably a tip. I think you do, Veronica, I imagine with, with clients is you'll probably then call those agents that sold it over that last four years in. Cause if they're not selling it again sometimes they, you know, want to do the, say the dirty things on their other agent's listings. Right. And so you know, I've done that before and you know, real estate agents told me about properties that might have building issues or, you know, there's problems with selling that property because of X, Y, Z reasons. So, yeah.

Veronica Morgan: And when you've had one of those properties is really tough to sell. You don't want it back. And when we'd sold it to somebody like that, you go, Oh my God, I hope they don't come back to me when they want to sell it, because you'd know how bloody soul destroying it is selling it. And this is the thing that I remind people, agents are very good at getting commitment from buyers and agents don't have care. It's not their job to worry whether it's the right property for you. They've just got a job to do. And that is just sell that thing for the people that made the mistake before you,

Chris Bates: And I'll be data or, you know, whatever source you want to use can actually show you how long was on the market back in 2012. And you know, it was on the market for 162 days. Like that's already showing you a big warning, right. It took a long time to sell and it sold four times the last five years. It's not a hot property, right. So I think it's very good to look at those kind of past sales in a bit of detail when you properly, thank you.

Veronica Morgan: You so much for joining us Nicola. We'll we'll put the link in the show notes for that price at its most recent article anyway, and, and you know, and the insights into the sorts of data you've got, what you're looking at doing with it. I think we'll all be watching to see some of these post COVID and remembering that we're not post COVID at the moment, but you know, you're looking at the world post COVID. That will be very interesting to see. So we will look forward to reading all about that. It's been a pleasure. Thanks so much for having me on

Chris Bates: Thank you, Nicola. Really appreciate it. We want to make you a bit of elephant rider and this week's elephant rider training is

Veronica Morgan: I just want to share with you a little hack actually, that we use an hour. Why should we don't use it now business because we have access to databases, but we recommend people in home buyer Academy actually do this because you can access sold data and sold property prices quite easily in both domain online and also on real estate.com that a, you, both of them have sold tabs. So when you search to buy a lot of people, when they're researching a market, they just go and look at what's on the market for sale. They don't actually think to look at what has sold and what does it sell for now, obviously when you got a lot of price not disclosed in there, which does happen, certainly when the market's a bit transitional you know, you won't know for sure you might have to pick up the phone or go out there to open houses and just get chatting with agents to pick up that data.

Veronica Morgan: But there's a lot of information that you can gather and you can look at floor plans and photos you can do drive-bys past those properties really to get a sense of what's happening with prices in that area. So certainly Nicola, she gave some great tips for the important things that she looked at when she was looking at buying. And I think that they're really valuable because looking at the micro market is so important, but I'm looking at that sold section. So many people have never, ever dabbled in there, never played in there. So if you haven't take your time to have a look,

Chris Bates: Oh, I agree. But I also think that it's a little bit just saving. I mean, I had a client, a new client yesterday, they're buying in Melbourne. They want to start to do some research prior to the lockdown finishes. Then they can actually have a bit more knowledge of the market. And the problem with this sole time, yes, you can look at the full plan and that helps, but it's nowhere near as good as actually going through the property and you know, experiencing it because I think the looking at the photos of the property, they always show their best lights. They don't hide the imperfections and the things that you don't don't know about the property. So just be a little bit careful kind of doing your price research on the sold tab, just because yeah, you might, yeah. Either under quote, what you actually think the property is worth because you know, a similar property, there's nowhere near as good as selling for you know, a smaller price. So just be careful with it. But I agree a hundred percent don't look at the bites app. If you want to know what's happening in the market, look at the soul tab because it's a much better realistic understanding of the prices

Veronica Morgan: Actually, when it comes to price research we've got a free mini course on home buyer Academy, which is a home bar academy.com forward slash free course. Cause it does take you through that whole process and absolutely agree that as a starting point, look at that sold data, because that also will give you an indication of whether you can get, whether you can afford to get what you think you're going to get in the area. Whereas what happens, the buyers look at what's on the market. If it's in an auction area, it's being quoted a bit less than they're expecting, and you sort of, you rush out there with wishful thinking. So it's good for a reality check, but you will actually start by inspecting properties. You will actually start gathering up that knowledge. So it's really good resource. For those properties you haven't inspected. But but yeah, they're nothing beats actually getting, putting together and the ease of spreadsheet actually in that in that mini course as well that you can use to actually start collating all the data. And I absolutely agree that you should get out there and look at as many properties as possible before you actually buy.

Chris Bates: I agree around the price at a client yesterday as well. And you know, the budgets are super tight because of the savings that the person's got. And so, and then what they want to achieve is in these areas. And I did a quick search and looked on the soul type and there was nothing selling anywhere near the price that he had to spend in those areas. And so it was very quickly that sold tab just said, look, it's not going to happen. Right. you know, and that saves potentially three months, whereas you hope that the listing is actually there was actually listings in his budget. And so you know, and cause it was so tight on budget, there was no flex there, you know, just could say three, six months going to these listings and then keep shooting over his budget.

Veronica Morgan: Well, and also the cost of building and pest inspections or Strada reports and getting the contract reviewed. And this is where a lot of buyers get so frustrated with the whole process and they've got to take their part in, they've got to take responsibility for their bit. And that is researching

Chris Bates: Yeah. Opportunity, cost the prices. But even that, you know, I've had clients who have just given up on the whole bioprocess, it's just all too difficult. And you know, things change. Sometimes I go, you know, a client unfortunately sent me an email yesterday and his wife's lost a job and you know, there've been very active buyers. But now that she's lost a job, they can't buy and till she gets another job and the time you've got to sometimes not take it for granted that you can always just buy and just keep waiting because you know, they had missed out on a few properties and now they are out of the market and it's just, yes, she could get another job tomorrow or like, Hey, but it's who knows. And so you've just always got to be, just be careful that you're not wasting time. Yeah. That's horrible.