Deals and discounts in the downturn

By Grace Ormsby

April 28 2020
Share

Given the current environment, should you be chasing capital growth or is it a yield play? A buyer’s agent has weighed in.

Speaking on a recent episode of nestegg’s sister publication, The Smart Property Investment Show, Simon Cohen, the co-founder and director of Cohen Handler, explained that there are plenty of good deals to be done despite COVID-19’s grind on the economy.

“Let’s be super clear: When we look at areas like Sydney especially and blue-chip areas in a lot of states – blue-chip property never really crashes – it’s not like the stock market.”

But for Mr Cohen, what he is seeing is that “the ‘sting’ has definitely come out of the marketplace”.

“Vendors [and] property owners are a lot more motivated to do deals, but there are very few properties on the market,” he added.

Mr Cohen noted that many people see no need to sell right now, saying: “The valuers aren’t knocking on your door to foreclose anymore; you’ve got three, or six or 12 months of free mortgage repayments, and interest rates are at an all-time low.”

As a result, anyone who is selling up, regardless of the reason, is motivated to do so.

“So, that’s where we’re getting the best deals. We’re seeing discounts of 10, 20 or even 30 per cent.”

For his clients who are cashed up or finance-approved, Mr Cohen said, “They can really take advantage of this environment.”

“If an opportunity knocks, from my experience, it doesn’t knock twice,” he said, highlighting that the government is putting things in place to revert the economy to normal as soon as it possibly can.

“If you see opportunity, take it and run.

“Because the second confidence comes back – and confidence comes back very quickly – you don’t want to be trying to jump in when everyone else is jumping in.

“Right now you can really pick, have your choice of what’s out there.”

And when posed the question of whether you should be chasing capital growth or yield in the present conditions, the buyer’s agent was firm: “I definitely think capital growth.

“I think yield will be good because you are going to be buying properties cheaper, but the upside by getting a killer deal is still, for me, the most exciting thing.

“You want to say you bought it for $1.5 (million) and you and I are talking in six months and you’ve just been offered $2.2 (million) – that’s what gets me excited.”

About the author

Grace Ormsby

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

About the author

Grace Ormsby

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

sections

most read

sections

most read

sections

most read

sections

most read

sections

most read

sections

most read

sections

most read

Most read

Age Pension increase prompts Australians to review their finances

Latest Podcast

Australia’s credit pivot: Mortgage enquiries hit a three‑year peak as households ...

Resources

There is $17.5 billion in lost and unclaimed super across ...

Invest