The number of properties on the market is rapidly increasing. But so is the number of buyers. Of the 7 auctions we were bidding at on Saturday only one passed in after genuine bidding. All these have sold at or above market expectation.
1 St George Grove Parkville was an extremely unusual property which was custom built in the 1930’s to have a tenantable unit downstairs and a residence for the owner upstairs. Its location was unique and the opportunities were varied as to what to do with the property. It could have been tenanted out to multiple tenants, turned into an executive residence or bought by an owner occupier. With few comparables in the area, the agent struggled to really put an accurate price on the property. Under competition the property sold for $1.320M which was a little over our estimate.
We have the highest recorded stock levels for this period since 2003, according to The Age newspaper yesterday. The REIV have reported there are 600 auctions scheduled for next weekend and then 775 the week after. Although we had an increase this week of 36% in the number of reported auctions to the REIV, the clearance rate still climbed 3 % to 85%. What happens over the next couple of weeks will certainly set the stage for the spring selling season due to start in 5 weeks.
The increase in stock will hopefully continue through October because the increase in potential purchasers is huge. If we analyse the current price increases vs comparable sales over the last three months, the numbers of people bidding at auction, the clearance rates, and most importantly the total number of private sales, we can see that without the continual stock increases through spring, prices will rise very sharply. There are more potential buyers than sellers and simplistic economics tells us this will relate to a price increase.
This may well be different in new estates where developers and builders are reaping huge rewards servicing the first home buyers. Once the grants taper off, we should see a relaxing of price in these new estates. If the interest rates do rise significantly early next year, this may also scare the first home buyers off a little.
With a slow down of first home buyers, we should also see the continuing resurrection of the property investor. A property in Reservoir over the weekend had eight people bidding for a very average house on excellent developable land. Most of these people were apparently investors. Rental returns are still very good, historic capital growths now look better than stock market returns over a long period of time and interest rates are still at historic lows.
All in all we are in for a sensational spring season. At this stage the only segment of the market place that may ease off is the brand new estates in about March next year. All the well serviced, established areas of Melbourne look set to continue with their price strengthening in the foreseeable future. Interest rates will have to jump three or four times (25 basis points each) before I think it will significantly affect the established market Just remember 2007 when the rates were 3% higher than now and the market prices were still increasing. And even during a Global Economic melt down our property prices in Melbourne simply levelled out.
If you are thinking about buying property this year please feel free to give us a call to make a no obligation appointment at our office.
Ian James
Monday, August 31, 2009
Tuesday, August 25, 2009
Market Comment - Monday August 24th 2009
It has been a couple of weeks since my last market comment and not too much has changed in the market. The media is still worried about underquoting, there is still some talk in a couple of papers about the “property bubble” bursting yet the stock market is still going up very strongly.
Clearance rates are remaining over 80% even with numbers of auctions climbing and private sales are still strong; over 1200 sales of property in Melbourne last week. The talk from the agents is also quite upbeat about numbers of properties coming on the market in spring. But this will only have an effect on price if the demand slows and I doubt it will. If anything I think we will see an increase in demand and this will all but mitigate any increase in supply.
No matter whether agents underquote, or the government legislates to attempt to stop them; No matter whether a lot of property comes on the market or only a little does; the key to buying well starts with accurate property assessment.
If you want to buy a property in the current Melbourne market, spend the time going around to as many properties as you can. Take copious notes and remember as much about them as you can. You must note all their pros and cons. Then attend the auction and note the number of bidders and the final price. If you do this enough and gather enough data, you can begin to get an idea of what properties in the area are worth.
You need to take into account, land size, location relative to transport, shops, parks and gardens. You need to take into account age of the original house, style and size of the house. When the renovations were done, how much work still needs to be done to bring it up to spec.
Then you need to analyse how many people were bidding, when the property went on the market and how many bidders there were after it got to the reserve. Once you have done this consistently for about three months in all the areas you are looking, then you will start to get an idea of what the vendor will want regardless of the quote offered by the vendors agent.
It is no use spending your time preparing for an auction which you have no chance of succeeding at. Doing pest inspections, building inspections and legal checks only to find out the bidding is starting just above your limit for the property is no fun. It can also be quite expensive.
If you cannot accurately appraise a property on your own, it does not matter how good a negotiator you are. You will not know whether you have done a good deal or not. This is the key to avoiding “Buyers Remorse”
If you do not have the time or the inclination to do all this research perhaps you should think about having a chat to a Buyer’s Advocate. Feel free to give us a call and set up a no obligation first meeting.
Ian James
Clearance rates are remaining over 80% even with numbers of auctions climbing and private sales are still strong; over 1200 sales of property in Melbourne last week. The talk from the agents is also quite upbeat about numbers of properties coming on the market in spring. But this will only have an effect on price if the demand slows and I doubt it will. If anything I think we will see an increase in demand and this will all but mitigate any increase in supply.
No matter whether agents underquote, or the government legislates to attempt to stop them; No matter whether a lot of property comes on the market or only a little does; the key to buying well starts with accurate property assessment.
If you want to buy a property in the current Melbourne market, spend the time going around to as many properties as you can. Take copious notes and remember as much about them as you can. You must note all their pros and cons. Then attend the auction and note the number of bidders and the final price. If you do this enough and gather enough data, you can begin to get an idea of what properties in the area are worth.
You need to take into account, land size, location relative to transport, shops, parks and gardens. You need to take into account age of the original house, style and size of the house. When the renovations were done, how much work still needs to be done to bring it up to spec.
Then you need to analyse how many people were bidding, when the property went on the market and how many bidders there were after it got to the reserve. Once you have done this consistently for about three months in all the areas you are looking, then you will start to get an idea of what the vendor will want regardless of the quote offered by the vendors agent.
It is no use spending your time preparing for an auction which you have no chance of succeeding at. Doing pest inspections, building inspections and legal checks only to find out the bidding is starting just above your limit for the property is no fun. It can also be quite expensive.
If you cannot accurately appraise a property on your own, it does not matter how good a negotiator you are. You will not know whether you have done a good deal or not. This is the key to avoiding “Buyers Remorse”
If you do not have the time or the inclination to do all this research perhaps you should think about having a chat to a Buyer’s Advocate. Feel free to give us a call and set up a no obligation first meeting.
Ian James
Monday, August 10, 2009
Market Comment - Monday August 10th 2009
The clearance rates, interest rates, stock levels, underquoting, Vendor Advocates, the list goes on and on putting difficulties in the way of prospective purchasers.
The Reserve Bank has decided to give an unprecedented “crystal ball” style thought on interest rates. They are assuming over the next couple of years to see the cash rate climb slowly but steadily by about 2%. This will match our slow and steady economical capital growth. Whilst this may well help the share market to recoup some of it’s losses over the last 18 months, it will push property prices to new heights. As our economy strengthens so will our property prices.
We have seen the latest results from the government regarding unemployment figures. I think it is now fairly well recognised that we are not going to reach double digit unemployment anytime soon.
And this leads us again to touch on underquoting! The market price is increasing rapidly. Figures out this week show us that any losses over the past 18 months have well and truly been surpassed and that prices are quickly climbing again.
The market is moving profoundly. What might be a foreseeable price at the start of a campaign may not be accurate 6 weeks later. If a large volume of similar property came onto the market all at once then the price the agent set six weeks before auction maybe too high. If all similar properties have sold well within a few weeks the price for a particular property may go up substantially.
Selling agents are there to do everything legally in their power to maximise the sale for the vendor. That’s who is paying them. The government will never be able to legislate anything that will force the selling agent into a position that assists the prospective purchaser to do a better deal. THIS WOULD FORCE THE SELLING AGENT TO BREAK THEIR CONTRACTURAL OBLIGATION TO THE VENDOR.
If you are a prospective purchaser you need professional advice in order to save yourself time and money.
THE FACTS ARE: Selling agents work for the vendor and professional buying agents work for the purchasers. Can anyone remember the last time you were told “Don’t take a solicitor to court to represent you – SAVE SOME MONEY – DO IT YOURSELF!!!!!” There's an old courthouse adage: A person who represents himself has a fool for a client. Nothing could be more accurate in purchasing Real Estate.
We do not waste time complaining about selling agents tactics. We do not waste our time reporting on specific property transactions, unless they set precedence. Our advocates only attend auctions when we have a client to represent. We do not worry about an agents’ quote, we make our own determinations because we are professional Buying agents. We always listen to what an agent has to say, and sometimes we have to translate this from “Agent’s Speak” to English for our client, but in the most part, Selling Agents do their job and Our Advocates do ours.
If you are considering purchasing property and don’t want to throw away money and effort. If you want to make a good long term purchase and feel good about the process come in and have a chat to JPP Buyer Advocates. We don’t sell any property, nor do we do any vendor advocacy (Selling property). All we do is look after people who are purchasing property. We are the experts. It is what we do!!!!
Give JPP Buyer Advocates a call and set up a no obligation appointment with one of our professional buyer advocates.
Ian James
The Reserve Bank has decided to give an unprecedented “crystal ball” style thought on interest rates. They are assuming over the next couple of years to see the cash rate climb slowly but steadily by about 2%. This will match our slow and steady economical capital growth. Whilst this may well help the share market to recoup some of it’s losses over the last 18 months, it will push property prices to new heights. As our economy strengthens so will our property prices.
We have seen the latest results from the government regarding unemployment figures. I think it is now fairly well recognised that we are not going to reach double digit unemployment anytime soon.
And this leads us again to touch on underquoting! The market price is increasing rapidly. Figures out this week show us that any losses over the past 18 months have well and truly been surpassed and that prices are quickly climbing again.
The market is moving profoundly. What might be a foreseeable price at the start of a campaign may not be accurate 6 weeks later. If a large volume of similar property came onto the market all at once then the price the agent set six weeks before auction maybe too high. If all similar properties have sold well within a few weeks the price for a particular property may go up substantially.
Selling agents are there to do everything legally in their power to maximise the sale for the vendor. That’s who is paying them. The government will never be able to legislate anything that will force the selling agent into a position that assists the prospective purchaser to do a better deal. THIS WOULD FORCE THE SELLING AGENT TO BREAK THEIR CONTRACTURAL OBLIGATION TO THE VENDOR.
If you are a prospective purchaser you need professional advice in order to save yourself time and money.
THE FACTS ARE: Selling agents work for the vendor and professional buying agents work for the purchasers. Can anyone remember the last time you were told “Don’t take a solicitor to court to represent you – SAVE SOME MONEY – DO IT YOURSELF!!!!!” There's an old courthouse adage: A person who represents himself has a fool for a client. Nothing could be more accurate in purchasing Real Estate.
We do not waste time complaining about selling agents tactics. We do not waste our time reporting on specific property transactions, unless they set precedence. Our advocates only attend auctions when we have a client to represent. We do not worry about an agents’ quote, we make our own determinations because we are professional Buying agents. We always listen to what an agent has to say, and sometimes we have to translate this from “Agent’s Speak” to English for our client, but in the most part, Selling Agents do their job and Our Advocates do ours.
If you are considering purchasing property and don’t want to throw away money and effort. If you want to make a good long term purchase and feel good about the process come in and have a chat to JPP Buyer Advocates. We don’t sell any property, nor do we do any vendor advocacy (Selling property). All we do is look after people who are purchasing property. We are the experts. It is what we do!!!!
Give JPP Buyer Advocates a call and set up a no obligation appointment with one of our professional buyer advocates.
Ian James
Monday, August 3, 2009
Market Comment - Monday August 3rd 2009
Two weeks ago we were asked to give a comment for the Neil Mitchell radio show. We were then asked about three properties. One sold prior to auction and with an undisclosed price. The other two sold on the weekend.
Manningtree Road: Sold $1.92
We estimated between $1.9M - $2M and would have refined this after property inspection
2/156 Dean Street Moonee Ponds: Passed in VB $580K reserve $600k
We assumed this was worth mid $500’s maybe a little higher, but as the location was poor we assumed a good chance of a pass in.
Without even visiting the properties it is not difficult to know what is likely to occur.
The issues here are did the agents do the wrong thing. The answer is simple: They had no choice but to do exactly what they did.
Had Jellis Craig marketed Manningtree Road at $1.9M - $2.0M they would not have got anywhere near as many people to the auction. The bidding would not have been as strong. If the bidding had stopped the vendor would have sold at $1.48M (On the market).
How else could the agents have quoted this property? Should they have been telling people that $1.48M will buy it but we expect it to go to $1.9M?????????????.
If buyers genuinely want to be at the right auction at the right time then they should be hiring a buyers advocate. We would have told our clients, Dean Street is a very ordinary property due to its location and that its right price would be around mid to high $500's. We would have counseled to wait for the auction and hope it passes in.
Manningtree Road - We would have counseled any client to offer strongly - somewhere in high $1.8's on the Wednesday or Thursday last week. This may or may not have been accepted, but at least we would have forced Jellis Craig to adjust their quote to above our offer and hopefully, for our buyers’ sake, scared off some of the competition. Remember it is our job to work for the buyer!!
At the moment the media and the government, as well as a few agents are saying they wish to control how an agent deals with purchasers. There are already guidelines in place for this.
Would you suggest to someone to go to court without a solicitor on their side so they can save some money?????????????? Especially when they are going to be going up against a "Queens Counsel"
You will never be able to legislate that the vendor’s agent is to assist the purchaser in any way shape or form. They have a contractual duty to their vendor and the vendor is shelling out a considerable amount of money for the agents’ expertise. It's not feasible and it's not fair to the vendor.
This is an issue I believe very strongly about. In my opinion, selling agents are hired by vendors to assist them to get the best possible outcome for their property sale. A purchaser, who is going to make the biggest financial decision of their life, who doesn’t get independent professional advice, has absolutely no reason to blame anyone but themselves if they continually miss out on the good properties.
To get a loan, most people will ask a mortgage broker, their accountant, their financial planner or at least go to a bank branch and ask for some help. When a property is purchased most people will seek assistance from a solicitor for their conveyance. If the building they are buying is old many will spend money on a building inspection, but the quintessential piece of information and the most difficult questions of all: “What is this property worth and how will I secure it against all the competition” is left to asking the counsel for the seller to answer.
How can our government continue to stick its head in the sand? The REIV is a peak industry body that exists to help the well being of selling agents. The media seems to think if under-quoting becomes a legislative issue then it will be fixed.
If you wish to purchase good property, and pay a good price in a reasonable time frame then hire a professional buyer’s agent (Buyers Advocate). They will make sure you know where all the available properties in your search area are, they will be able to appraise a property with a great degree of accuracy and also be able to professionally negotiate on your behalf. Be careful that your advocate is a licensed professional, who specializes in purchasing property and doesn’t work for any vendors and that they give you a professional report showing comparable sales and their reasons for recommending a price on a given property.
Come in and have a chat or give us a call. If you are thinking of buying property it will do no harm to talk to a professional buyer of property
Ian James
Manningtree Road: Sold $1.92
We estimated between $1.9M - $2M and would have refined this after property inspection
2/156 Dean Street Moonee Ponds: Passed in VB $580K reserve $600k
We assumed this was worth mid $500’s maybe a little higher, but as the location was poor we assumed a good chance of a pass in.
Without even visiting the properties it is not difficult to know what is likely to occur.
The issues here are did the agents do the wrong thing. The answer is simple: They had no choice but to do exactly what they did.
Had Jellis Craig marketed Manningtree Road at $1.9M - $2.0M they would not have got anywhere near as many people to the auction. The bidding would not have been as strong. If the bidding had stopped the vendor would have sold at $1.48M (On the market).
How else could the agents have quoted this property? Should they have been telling people that $1.48M will buy it but we expect it to go to $1.9M?????????????.
If buyers genuinely want to be at the right auction at the right time then they should be hiring a buyers advocate. We would have told our clients, Dean Street is a very ordinary property due to its location and that its right price would be around mid to high $500's. We would have counseled to wait for the auction and hope it passes in.
Manningtree Road - We would have counseled any client to offer strongly - somewhere in high $1.8's on the Wednesday or Thursday last week. This may or may not have been accepted, but at least we would have forced Jellis Craig to adjust their quote to above our offer and hopefully, for our buyers’ sake, scared off some of the competition. Remember it is our job to work for the buyer!!
At the moment the media and the government, as well as a few agents are saying they wish to control how an agent deals with purchasers. There are already guidelines in place for this.
Would you suggest to someone to go to court without a solicitor on their side so they can save some money?????????????? Especially when they are going to be going up against a "Queens Counsel"
You will never be able to legislate that the vendor’s agent is to assist the purchaser in any way shape or form. They have a contractual duty to their vendor and the vendor is shelling out a considerable amount of money for the agents’ expertise. It's not feasible and it's not fair to the vendor.
This is an issue I believe very strongly about. In my opinion, selling agents are hired by vendors to assist them to get the best possible outcome for their property sale. A purchaser, who is going to make the biggest financial decision of their life, who doesn’t get independent professional advice, has absolutely no reason to blame anyone but themselves if they continually miss out on the good properties.
To get a loan, most people will ask a mortgage broker, their accountant, their financial planner or at least go to a bank branch and ask for some help. When a property is purchased most people will seek assistance from a solicitor for their conveyance. If the building they are buying is old many will spend money on a building inspection, but the quintessential piece of information and the most difficult questions of all: “What is this property worth and how will I secure it against all the competition” is left to asking the counsel for the seller to answer.
How can our government continue to stick its head in the sand? The REIV is a peak industry body that exists to help the well being of selling agents. The media seems to think if under-quoting becomes a legislative issue then it will be fixed.
If you wish to purchase good property, and pay a good price in a reasonable time frame then hire a professional buyer’s agent (Buyers Advocate). They will make sure you know where all the available properties in your search area are, they will be able to appraise a property with a great degree of accuracy and also be able to professionally negotiate on your behalf. Be careful that your advocate is a licensed professional, who specializes in purchasing property and doesn’t work for any vendors and that they give you a professional report showing comparable sales and their reasons for recommending a price on a given property.
Come in and have a chat or give us a call. If you are thinking of buying property it will do no harm to talk to a professional buyer of property
Ian James
Subscribe to:
Posts (Atom)