We need to go all the way back to the first reporting week in February before we find reported sales to the REIV dipping below 1000 (with the exception of public holiday weekends, Labour Day, Easter and Anzac Day). Even the number of auctions is on the rise with 475 reported to the REIV this week. A clearance rate of 81% is neither here nor there, it is the fact that we can assume that in excess of 1000 properties a week are being reported as being sold (there will be a lot more that go unreported).
What we need to look at, however, is the quality of what is on the market. We successfully secured 3 properties on the weekend and were out bid at another 3. Every property had multiple bidding after the each was declared on the market. Only one property sold lower than we expected. All other sold for ranges with 2-3% of expectation.
If we digest the above information, we can assume there is plenty of property and that it is easy to buy. This is incorrect. Most property currently on the market is what I would call – average or below average. Locations that are not fantastic, properties that are not finished and or need a substantial amount of work, or the vendors are not being realistic. The smaller amounts of great property that are on the market are the ones attracting huge prices above reserve.
The other key indicator that we have a fickle market is the fact that none of the quote ranges are similar. At the moment, $550k - $600k can mean the agent is after low $500’s, Low $600’s or has a reserve of $700k. If you are currently attempting to purchase property you need to choose wisely. Once you have chosen a property you need to assess it accurately. If you base your bidding or offer on the quote range you could easily be $100k out from what the property is actually worth. This is not as much of an issue if you are short of the final bid. That just means you wasted your time in going after the property. What would be many times worse is if you overpaid by $100k.
Just remember if you have a pre approval from your bank this is always subject to a valuation by the bank. If you have overpaid and the property is valued far less than you purchased it for, the bank may not give you finance. Alternatively, you could be up for tens of thousands of dollars in Lenders Mortgage Insurance.
Before you purchase any property give us a call. We offer a free no obligation first meeting. Whether you decide to use a professional Buyers Advocate or not, that meeting may save you many thousands of dollars alone.
Ian James
Monday, May 25, 2009
Monday, May 18, 2009
Market Comment - Monday May 18th 2009
The weekend clearance rate exceeded 80% for only the second time this year. Whilst overall stock levels remain lower than this time last year, the official clearance rate is reported at a strong 82% of 434 properties that went up for auction. In addition, there were 762 private sales, taking the total number of properties sold for the week to well over 1000 yet again.
With news that the First Home Owner Grant will continue and the First Home Owner Boost will be phased out rather than stopped immediately, there is continued strong demand in the first home buyer market. And not surprisingly, the better properties regardless of the price tag are more often than not exceeding vendor expectations and their reserve with multiple bidding to try and secure the property.
As always, good, well positioned established property located within 20km of the CBD continues to do well and will continue to do so. Let's not forget that the population in Melbourne continues to grow and we have very low interest rates - two significant factors that impact on the market.
If you are thinking of buying or have found a property you are wanting to purchase, give us a call or send us an email and we would be happy to have a chat.
Antony Bucello
With news that the First Home Owner Grant will continue and the First Home Owner Boost will be phased out rather than stopped immediately, there is continued strong demand in the first home buyer market. And not surprisingly, the better properties regardless of the price tag are more often than not exceeding vendor expectations and their reserve with multiple bidding to try and secure the property.
As always, good, well positioned established property located within 20km of the CBD continues to do well and will continue to do so. Let's not forget that the population in Melbourne continues to grow and we have very low interest rates - two significant factors that impact on the market.
If you are thinking of buying or have found a property you are wanting to purchase, give us a call or send us an email and we would be happy to have a chat.
Antony Bucello
Monday, May 11, 2009
Market Comment - Monday May 11th 2009
This weekend saw what has become the typical clearance rate: 76% on around 440 homes that were set for auction. Of course, as we have been talking about for the last three months, there was again a very healthy private sale volume for the week. There were only 14 occurrences last year where the REIV reported that total sales exceeded 1000 properties in a week. We have already had 9 occurrences this year.
Whilst we wait to see what will happen with tomorrow’s federal budget, the market continued to move full steam ahead. Of the auctions we attended on Saturday, all sold under the hammer after spirited multiple bidding well in excess of the reserves. The auctions covered the ranges from $500k to well over $1M and all were hotly contested. Even the market over $2M seems to be picking up interest from many more people than most commentators believed would be the case.
We can see from the figures that are currently being reported that Private Sale negotiation is quickly becoming the most common method of sale, either because the property has passed in or the agents have decided that it is the preferred method of sale. Either way, anyone wanting to purchase a home over the next six months had better get some good advice or be ready to take on some very professional negotiators.
If you are thinking of purchasing or have already started looking please feel free to call and have a chat.
Ian James
Whilst we wait to see what will happen with tomorrow’s federal budget, the market continued to move full steam ahead. Of the auctions we attended on Saturday, all sold under the hammer after spirited multiple bidding well in excess of the reserves. The auctions covered the ranges from $500k to well over $1M and all were hotly contested. Even the market over $2M seems to be picking up interest from many more people than most commentators believed would be the case.
We can see from the figures that are currently being reported that Private Sale negotiation is quickly becoming the most common method of sale, either because the property has passed in or the agents have decided that it is the preferred method of sale. Either way, anyone wanting to purchase a home over the next six months had better get some good advice or be ready to take on some very professional negotiators.
If you are thinking of purchasing or have already started looking please feel free to call and have a chat.
Ian James
Monday, May 4, 2009
Market Comment - Monday May 4th 2009
With a 77% clearance rate and over 1000 private sales last week we are certainly not in the doldrums as most commentators would have us believe. In fact we are moving along reminiscent of the pre GFC times during February and March 2008.
Wasn’t it fantastic to find out that our property market had fallen by 15%? Isn’t it great that you can now buy property $75,000 cheaper than you could before? What the Herald Sun’s headline on Saturday says is very true. In the December quarter of 2007 at the absolute peak of the market, in one quarter our median jumped by 12.8% to $485,000. It had been $430,000 the previous quarter. This was an abnormal jump and if you use this as the benchmark instead of an anomaly then it looks like Melbourne property is in freefall.
Nothing could be further from the truth. In fact if we look at September 2007 until now the fall has been only 4.6% according to the REIV figures. And these figures are very different from RP Data’s figures. RP data is used by the Australian Stock Exchange and their figures indicated a rise last quarter to $426,423 which would equate to a rise of 2.4%.
Last week there were 1000 private sales. Looking back through REIV data, there has not been this many private sales in one week in either 2008 or 2009. There were 1298 total sales last week and you would need to go back to March 2008 to see that many sales in one week. Even the total turnover of $572M is reminiscent of the heady days of 2007.
When the market turns south as it has throughout the world, people tend to sell off anything they do not hold near and dear. This means properties that are average or below average tend to be sold off earlier than those seen as above average. This will reflect in the total figures put out by any research institution. Good properties will always return good prices; “less good” properties will always return “less good” prices. If there are more “less good” properties on the market then the statistics will show a lower median price.
In an upturned market everything sells well. People will pay over the odds for all property whether it is good or “less good”. It is now those who payed over the odds for a “less good” property will feel the pinch. It is these people that may find themselves in a negative equity position. It is these people that will struggle to sell their properties for even what they paid.
If you are in the market for a property, now is a fantastic time to buy good property. So was yesterday and so was last year. Good property will always lease out well, it will always sell well and will usually show a better capital growth than a “less good” property.
You must identify good property from “less good”, work out what the right amount to pay is, and then secure the property before someone else does. This is what JPP Buyer Advocates does for our clients. We do not work with vendors, we are not paid by any real estate agents; all we do is assist people to purchase good property.
Please feel free to contact us for a no obligation meeting if you are considering buying any property throughout Melbourne metropolitan area or Greater Geelong.
Wasn’t it fantastic to find out that our property market had fallen by 15%? Isn’t it great that you can now buy property $75,000 cheaper than you could before? What the Herald Sun’s headline on Saturday says is very true. In the December quarter of 2007 at the absolute peak of the market, in one quarter our median jumped by 12.8% to $485,000. It had been $430,000 the previous quarter. This was an abnormal jump and if you use this as the benchmark instead of an anomaly then it looks like Melbourne property is in freefall.
Nothing could be further from the truth. In fact if we look at September 2007 until now the fall has been only 4.6% according to the REIV figures. And these figures are very different from RP Data’s figures. RP data is used by the Australian Stock Exchange and their figures indicated a rise last quarter to $426,423 which would equate to a rise of 2.4%.
Last week there were 1000 private sales. Looking back through REIV data, there has not been this many private sales in one week in either 2008 or 2009. There were 1298 total sales last week and you would need to go back to March 2008 to see that many sales in one week. Even the total turnover of $572M is reminiscent of the heady days of 2007.
When the market turns south as it has throughout the world, people tend to sell off anything they do not hold near and dear. This means properties that are average or below average tend to be sold off earlier than those seen as above average. This will reflect in the total figures put out by any research institution. Good properties will always return good prices; “less good” properties will always return “less good” prices. If there are more “less good” properties on the market then the statistics will show a lower median price.
In an upturned market everything sells well. People will pay over the odds for all property whether it is good or “less good”. It is now those who payed over the odds for a “less good” property will feel the pinch. It is these people that may find themselves in a negative equity position. It is these people that will struggle to sell their properties for even what they paid.
If you are in the market for a property, now is a fantastic time to buy good property. So was yesterday and so was last year. Good property will always lease out well, it will always sell well and will usually show a better capital growth than a “less good” property.
You must identify good property from “less good”, work out what the right amount to pay is, and then secure the property before someone else does. This is what JPP Buyer Advocates does for our clients. We do not work with vendors, we are not paid by any real estate agents; all we do is assist people to purchase good property.
Please feel free to contact us for a no obligation meeting if you are considering buying any property throughout Melbourne metropolitan area or Greater Geelong.
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