The Problem with Following the Crowd in Property

Most weeks as a mortgage broker in Palm Beach, I chat with people who are thinking about buying a home or an investment property, or perhaps looking to refinance. It’s always interesting to hear what’s on their mind, and often, a lot of what they’re thinking is influenced by what everyone else seems to be doing. There’s a natural human tendency to look around and see what the herd is up to, especially when it comes to big life decisions like property. We see our mates buying places, or hear about a family friend who just sold for a big profit, and it can be hard not to feel a bit of pressure or like we’re missing out if we’re not doing the same.

That feeling, that fear of missing out, or FOMO as the kids call it, is a powerful motivator. It can push us to make decisions we might not have considered otherwise, or to rush into something without really thinking it through. When property markets are hot, it’s even worse. The news is full of stories about record prices, bidding wars, and properties selling in a flash. It’s easy to get caught up in the excitement and assume that if everyone else is diving in, it must be the right thing to do.

But here’s the thing about following the crowd, especially in property: the crowd doesn’t know your personal situation. The crowd doesn’t know your income, your job security, your savings, your financial goals, or your risk tolerance. What might be a perfectly sensible decision for one person could be a recipe for stress and regret for another. Property isn’t a one-size-fits-all kind of deal, no matter how much the general chatter might make it seem that way.

Think about it this way: when you’re driving on the M1, and everyone speeds up to get past a bottleneck, you might speed up too. It feels like the natural thing to do to keep up. But what if speeding isn’t safe for your car, or you’re running low on fuel, or you just prefer to drive at your own pace? In property, the stakes are a whole lot higher than a traffic jam. It’s about committing to a substantial amount of debt, often for many years, and making a decision that will impact your lifestyle and financial future for a long time.

One of the biggest issues with just doing what everyone else is doing is that it often means you’re making decisions based on past performance or current hype, rather than looking ahead or considering your own specific needs. When a certain suburb or type of property becomes popular, prices usually go up. People see that growth and jump in, hoping to ride the wave. But often, by the time something is widely recognised as a hot spot, a lot of the easy gains have already been made.

This isn’t to say that popular areas don’t keep growing, or that you should always go against the grain. Not at all. It’s more about the *why* behind your decision. Are you buying because it genuinely suits your lifestyle, your budget, and your long-term plans? Or are you buying because everyone you know is talking about how great that area is, or how much money they made there, and you feel like you should be doing the same?

It’s also important to remember that not everyone who talks about their property wins is telling the whole story. We often hear about the big sales, the quick profits, or the amazing investment returns. What we don’t always hear about are the periods of stagnant growth, the unexpected repair bills, the difficult tenants, the rising interest rates, or the times when someone had to sell at a loss because their circumstances changed. People tend to share their successes more readily than their challenges, and that can skew our perception of what’s truly happening out there.

Another thing I’ve noticed is how quickly advice can spread through social circles, and how it can become almost unquestioned truth. Someone might say, ‘You absolutely *must* buy a house, apartments never grow in value,’ or ‘Only invest interstate, the Gold Coast is too expensive.’ These sweeping statements might be true for *their* situation, or they might be based on outdated information, or even just personal bias. But when you hear them enough times, they can start to feel like universal rules, rather than individual opinions.

These kinds of generalisations can be really dangerous because they ignore the incredible diversity of the property market and, more importantly, the incredible diversity of people’s lives. An apartment might be perfect for a single person who travels a lot and wants low maintenance, while a house with a big yard might be essential for a young family. Investing interstate might make sense for someone with a large portfolio, but for a first-time investor, staying local might offer more peace of mind and easier management.

The trick, I think, is to develop a bit of a filter for all the noise. When you hear about someone’s property success, it’s okay to be happy for them, but try not to immediately compare it to your own situation. Instead, use it as an opportunity to ask yourself, ‘What can I learn from this? What made that work for them? Is any of that relevant to my own goals, or am I just admiring someone else’s journey?’

It also pays to understand your own motivations. Are you looking for a family home, a stepping stone into the market, a long-term investment for retirement, or something else entirely? Having a clear idea of what you want to achieve makes it much easier to evaluate whether a particular property or strategy is actually going to help you get there, rather than just being what everyone else is doing.

Sometimes, going against the crowd can feel a bit scary or lonely. It means trusting your own research and instincts, and potentially ignoring the well-meaning but sometimes misinformed advice of friends and family. But often, it’s those who zig when others zag who find the opportunities that the crowd missed, or who make decisions that are truly aligned with their own unique circumstances.

For example, when interest rates are going up, you might hear a lot of chatter about how it’s a terrible time to buy. And for some, it might be. But for others, higher rates might mean less competition, a chance to negotiate a better price, or a chance to get into a property they wouldn’t have afforded during a boom. The crowd focuses on the negative, but an individual perspective might find the silver lining.

Conversely, when the market is booming and everyone is saying you have to get in now or you’ll miss out forever, that’s when it’s perhaps most important to pause. The fear of missing out can lead to overpaying, compromising too much on your needs, or stretching your budget to breaking point. It’s a good time to remember that property markets, like everything else, move in cycles. There are always opportunities, even if they look different at different times.

So, what’s the alternative to just following the crowd? It’s about building your own understanding, doing your own research, and most importantly, understanding yourself and your own financial position. It’s about asking thoughtful questions, not just of real estate agents or friends, but of yourself. What can you truly afford? What are you willing to compromise on? What are your non-negotiables? What does success look like *to you*?

It might involve looking at areas or types of properties that aren’t currently in the headlines. It might mean waiting a bit longer to save more, even if everyone else seems to be buying now. Or it might mean jumping in when others are hesitant, because you’ve done your homework and found a genuine opportunity that fits your plan.

Ultimately, property decisions are deeply personal. While it’s helpful to be aware of market trends and what’s happening more broadly, your decision should always come back to what makes sense for *you*. Don’t let the collective hum of the crowd drown out your own inner voice or your own sensible analysis.

If you’re finding all the conflicting advice and market chatter a bit overwhelming, or you just want to talk through your own situation with someone who understands the financial side of things without any agenda other than helping you, then that’s exactly what a mortgage broker is here for. Sometimes, just having a clear conversation can help cut through the noise and give you the confidence to make a decision that’s right for you, not just for the crowd.