If anyone in the market place believes that First Home Owners will again be a market force because of stamp duty savings the Victorian State Government is offering, they are seriously deluding themselves.
Firstly, the stamp duty savings will count for anyone that has already purchased and settles after 1st July this year. Therefore there would have been a rush now! Average settlement is 60 days putting us past 1st July.
Secondly, the savings on a $565k (median house price in Melbourne) home will be just over $5700. As this is a reduction in Stamp Duty and not money that would be seen as a deposit, the banks will most likely not leverage this money which they did with the First Home Owners Grants. When $30,000 was being given to First Home Buyers, the banks looked at this as the equivalent of a deposit and lent accordingly. If you were borrowing 90% loan to value ratio, then with an extra $30k, if you could afford the repayments, the bank would lend you up to an extra $300k. This would not be the same with a reduction to a fee.
As far as waiting for further cuts through for the next 3 years in order to reach the full savings of nearly $14,500, the market will have most likely moved further than this. The best time for first home buyers, or anyone else for that matter, is as soon as they can reasonably afford to. Buying property is long term: 5 – 10 years.
As a first home buyer, if you cannot afford to purchase where you want to live, consider renting where you want to live and buy an investment property where the tenant will assist you to pay off the mortgage. Or, and this is the scary line for all you mums and dads, stay at home longer, and buy an investment property. Why don’t you join forces with your parents and buy a property together.
The sooner you get into the property market and the longer you are in the property market, the more money you will make.
If you are considering a purchase why don’t you drop in for a no obligation chat.
Regards
Ian James
Tuesday, May 10, 2011
Monday, May 9, 2011
Market Wrap - Monday 9th May 2011
Market Wrap
We’re currently in what I’d term an ‘opportunistic’ market. An agent today quoted another phrase which I thought summed it up well – an ‘honest market’
We witnessed five auctions this weekend with only one property selling ‘under the hammer’ All were quoted ‘conservatively - all had multiple bidders; however the only one to sell without negotiation was a property that reached its reserve within the quoted range. A percentage were successfully negotiated after sale, however it’s clear vendors still have their sights set too high and price quotes aren’t reflecting true vendor expectation.
Therefore the fight between buyer and seller continues, resulting in a perfect negotiators playing field. Despite sentiment being cautious, there were good numbers at all the auctions we attended this weekend and the majority had multiple bidders competing. The press is reporting bumper stock; however the figures don’t match the online data and are dubious at best. A suburb by suburb breakdown shows most of this stock is located in the outer suburban areas where demand is naturally low, or in newly developed high rise apartments which are un-appealing to owner occupiers. Quality listings will always attract competition, however in a flat market, we/re able to take advantage of some great opportunities.
23 Vunabere Ave Bentleigh is a classic 3 bedroom clinker brick house on 754 sqm of land. Quoting 790-870K the auction was fairly well attended with a lively atmosphere. Opening on a genuine bid of 650K – (a good way from the quoted range) – the agent ‘cut to the chase’ with a vendor bid of 770K. With four bidders competing, it was a fairly swift auction. At 855K bidding slowed, and the agent went inside for a ‘not so brief’ half time break. I can only postulate he was trying to persuade the vendor to put the property on the market, because after what seemed like a good 7 minutes, he eventually returned and gave no indication we were even close to reserve. The auction pushed up a little further before passing in at 892K. Failing to get any further movement from the buyer via negotiation, the vendor finally agreed to sell at the passed in price of 892K
44 Holloway St Ormond is a large corner block of land with an older style 2 bedroom property, and a vendor who was prepared to ‘meet the market’ The quoted range was 790-840K. Without even asking for an opening bid, the agent took the lead placing an immediate vendor bid of 790K. Asking for rises of 10K someone finally offered 800K. With seemingly no more interest the agent took his break to meet with the vendor. A few moments later he returned to announce the property ‘on market’. This revived things somewhat and going up in 1K moves, three other bidders decided to get involved. The price didn’t get far before the property sold under the hammer for 805K
36 Mortimore Bentleigh was another property that had been quoted conservatively but certainly didn’t have a reserve to match. A smart, modern, 5 bedroom family home, attracted a large crowd and 3 active bidders. Quoting 1.05-1.15Mil the auction opened on a vendor bid of 1.05Mil. When there was seemingly no movement from the crowd, the agent had to place another vendor bid of 1.1Mil before the action started. With healthy competition the price gradually pushed passed the quoted range. One buyer asked 3 times if the property was ‘on market’, however even though he had a pre-set reserve, the agent gave no indication market level was even close. At 1.23Mil the buyers dug in their heels and it passed in later to be negotiated for 1.3Mil
2B Evelyn St, Bentleigh is a small 2 bedroom unit the McKinnon. Quoted at 500-550K the agent struggled to get the ball rolling before finally placing a vendor bid of 500K. Only 1 bidder was prepared to show their hand by offering a bid of 510K. However with no competition the property was passed in to later be negotiated and sold for $535,000.
13 Maskell Street in Brighton – a luxury 4 bedroom town house quoting 1.7Mil + – presented the auctioneer with the unfortunate task of conducting proceedings next to a frequently traversed train line. Despite the noisy location, the auction was well attended with 3 bidders willing to take a role. Opening on a vendor bid of 1.7M the pace was painfully slow. The auctioneer had to place another vendor bid of 1.75Mil before the buyers got serious and the price struggled to 1.825Mil. Passing in at this level the property was later negotiated successfully to be sold at 1.875Mil
Catherine Cashmore
We’re currently in what I’d term an ‘opportunistic’ market. An agent today quoted another phrase which I thought summed it up well – an ‘honest market’
We witnessed five auctions this weekend with only one property selling ‘under the hammer’ All were quoted ‘conservatively - all had multiple bidders; however the only one to sell without negotiation was a property that reached its reserve within the quoted range. A percentage were successfully negotiated after sale, however it’s clear vendors still have their sights set too high and price quotes aren’t reflecting true vendor expectation.
Therefore the fight between buyer and seller continues, resulting in a perfect negotiators playing field. Despite sentiment being cautious, there were good numbers at all the auctions we attended this weekend and the majority had multiple bidders competing. The press is reporting bumper stock; however the figures don’t match the online data and are dubious at best. A suburb by suburb breakdown shows most of this stock is located in the outer suburban areas where demand is naturally low, or in newly developed high rise apartments which are un-appealing to owner occupiers. Quality listings will always attract competition, however in a flat market, we/re able to take advantage of some great opportunities.
23 Vunabere Ave Bentleigh is a classic 3 bedroom clinker brick house on 754 sqm of land. Quoting 790-870K the auction was fairly well attended with a lively atmosphere. Opening on a genuine bid of 650K – (a good way from the quoted range) – the agent ‘cut to the chase’ with a vendor bid of 770K. With four bidders competing, it was a fairly swift auction. At 855K bidding slowed, and the agent went inside for a ‘not so brief’ half time break. I can only postulate he was trying to persuade the vendor to put the property on the market, because after what seemed like a good 7 minutes, he eventually returned and gave no indication we were even close to reserve. The auction pushed up a little further before passing in at 892K. Failing to get any further movement from the buyer via negotiation, the vendor finally agreed to sell at the passed in price of 892K
44 Holloway St Ormond is a large corner block of land with an older style 2 bedroom property, and a vendor who was prepared to ‘meet the market’ The quoted range was 790-840K. Without even asking for an opening bid, the agent took the lead placing an immediate vendor bid of 790K. Asking for rises of 10K someone finally offered 800K. With seemingly no more interest the agent took his break to meet with the vendor. A few moments later he returned to announce the property ‘on market’. This revived things somewhat and going up in 1K moves, three other bidders decided to get involved. The price didn’t get far before the property sold under the hammer for 805K
36 Mortimore Bentleigh was another property that had been quoted conservatively but certainly didn’t have a reserve to match. A smart, modern, 5 bedroom family home, attracted a large crowd and 3 active bidders. Quoting 1.05-1.15Mil the auction opened on a vendor bid of 1.05Mil. When there was seemingly no movement from the crowd, the agent had to place another vendor bid of 1.1Mil before the action started. With healthy competition the price gradually pushed passed the quoted range. One buyer asked 3 times if the property was ‘on market’, however even though he had a pre-set reserve, the agent gave no indication market level was even close. At 1.23Mil the buyers dug in their heels and it passed in later to be negotiated for 1.3Mil
2B Evelyn St, Bentleigh is a small 2 bedroom unit the McKinnon. Quoted at 500-550K the agent struggled to get the ball rolling before finally placing a vendor bid of 500K. Only 1 bidder was prepared to show their hand by offering a bid of 510K. However with no competition the property was passed in to later be negotiated and sold for $535,000.
13 Maskell Street in Brighton – a luxury 4 bedroom town house quoting 1.7Mil + – presented the auctioneer with the unfortunate task of conducting proceedings next to a frequently traversed train line. Despite the noisy location, the auction was well attended with 3 bidders willing to take a role. Opening on a vendor bid of 1.7M the pace was painfully slow. The auctioneer had to place another vendor bid of 1.75Mil before the buyers got serious and the price struggled to 1.825Mil. Passing in at this level the property was later negotiated successfully to be sold at 1.875Mil
Catherine Cashmore
Tuesday, May 3, 2011
Market Comment - Tuesday May 3rd 2011
The market is changing again. The upper end over $2M is remaining skittish. Good properties will sell but the competition is much less than it has been for the past twelve months. It is truly at negotiators market at this level. This is not a market for the feint hearted. However, it is not a market to say “no” to everything the vendor offers. The trick with negotiation is to work out when to say “yes”
Negotiation in its purest form is RISK vs REWARD. Knowing when to make an offer and when to do nothing can mean the difference between securing the property for $1.95M and paying over $2M. It can also be the difference between securing the property and missing out.
Before making any offers at all, you need to set your game plan. This is more about setting goals and objectives in certain time frames rather than a dollar amount. We may decide that the asking price is well above what we are happy to pay, however we still like the property enough to purchase it. This means we need to take a long term, higher risk strategy, rather than continually increasing our offer in order to meet the expectations of the vendor. Unfortunately this can mean missing out to someone who offers only slightly more than you do.
Alternatively, you may be happy to pay a price that the vendor is happy with but the property is going to auction. You need to use a strategy that will secure the property quickly, rather than trying to save money.
You need to take into account the level of experience the selling agent has, the time the property has been on the market, the market itself and even the method of sale the vendor is using. Weighing all these factors will assist you to making good decisions.
Negotiation directly with experienced real estate agents is not for everyone, however a well thought out plan will give you a much better chance of success.
If you need help purchasing a property please feel free to contact us.
Ian James
Negotiation in its purest form is RISK vs REWARD. Knowing when to make an offer and when to do nothing can mean the difference between securing the property for $1.95M and paying over $2M. It can also be the difference between securing the property and missing out.
Before making any offers at all, you need to set your game plan. This is more about setting goals and objectives in certain time frames rather than a dollar amount. We may decide that the asking price is well above what we are happy to pay, however we still like the property enough to purchase it. This means we need to take a long term, higher risk strategy, rather than continually increasing our offer in order to meet the expectations of the vendor. Unfortunately this can mean missing out to someone who offers only slightly more than you do.
Alternatively, you may be happy to pay a price that the vendor is happy with but the property is going to auction. You need to use a strategy that will secure the property quickly, rather than trying to save money.
You need to take into account the level of experience the selling agent has, the time the property has been on the market, the market itself and even the method of sale the vendor is using. Weighing all these factors will assist you to making good decisions.
Negotiation directly with experienced real estate agents is not for everyone, however a well thought out plan will give you a much better chance of success.
If you need help purchasing a property please feel free to contact us.
Ian James
Monday, May 2, 2011
Market Wrap - Monday 2nd May 2011
Market Wrap
We have now segregated our market wrap from our market comments.
From now on each Monday morning you will see the statistics that are available and some of the auctions and properties we have attended over the weekend.
On Tuesday we will now write a more comprehensive market comment based on emerging trends and issues fundamental to buyers (and sellers) of real estate in Melbourne
SOLD under the hammer
4/13 Hawksburn Rd, South Yarra – a well located 2 bedroom apartment quoted at $430-$480K. This auction attracted a lot of interest with 5 bidders in all willing to show their hand. The agent didn’t have to work too hard to get the ball rolling - opening on a genuine bid of $430K, the bidding progressed confidently in 5K increments until it was announced on the market at $480K. At $522K - just as it seemed the steam had gone out of the bidding and all interest had been exhausted, the initial bidder who opened the auction at 430K came back into the game jumping to 525K. With a final squeeze of the remaining participants budget, the property sold under the hammer for $532,500.
At the other end of the market 9 Marlborough St, in Caulfield also attracted a good degree of interest. An un-renovated single fronted 3 bedroom Edwardian with plenty of room to add value, was a perfect acquisition for someone trying to get a ‘comparatively’ affordable foothold into this $1.350M median location. Opening on a vendor bid of $730K 3 bidders took the challenge – albeit tentatively – pushing upwards in increasingly small increments of 10K, then 5K, until it was announced on the market at a pre-arranged reserve of $810K. With 2 bidders still in the game, the house sold under the hammer for $827,500.
8/94 Lewisham Rd North in Prahran was perfect suited for first home buyers and investors alike. A one bedroom renovated apartment quoted at 350-380K attracted a crowd of around 50 onlookers, and surprisingly 5 bidders. Opening on a vendor bid of $350K, the price shifted slowly upwards in 5k increments which were gradually broken down until it was announced on the market at $384,000. It sold under the hammer for $401K – a good property gets a good result for both buyer and seller.
Passed in Vendor Bid
49 Jupiter St in Caulfield South is a 2 bedroom renovated art deco located in a street littered with million dollar plus sales. Judging by the size of the crowd attending, and the number streaming through the open prior to the auction, there seemed to be plenty of genuine interest. However after a relatively long pre-amble the agent failed to inspire anyone to raise a hand. Quoting $660-730K, the auction opened on a vendor bid of $660K and after much effort, ended up passing it in at this level.
8 Loller St, in Brighton also failed to attract a bid despite a large crowd attending. However the auctioneer valiantly worked hard for about 20 mins encouraging buyers to show their hand, before admitting defeat and passing the property in. Quoting 1.150,000 – 1,300,000, he opened on a vendor bid of $1.2 Mil. He followed this with another vendor bid of $1.250 before passing the property in.
Sold via negotiation
63 Grosvenor St, Balaclava is always a location that attracts a lot of attention. Considered one of the best streets in Balaclava the auction was extremely well attended. Despite the beautiful weather, the agent chose to conduct the auction inside which only heightened the stress for those preparing to bid. An unusual architect designed 3 bedroom townhouse stood this property out from the crowd and 3 bidders were subsequently inspired to raise a hand. After announcing the quoted range was 950K+ he opened on a vendor bid on this number. After a little effort he finally encouraged all interested parties to raise a hand. Going up in increments of 10K however obviously wasn’t fast enough, or close enough to the reserve for this auctioneer. After only two bids, he decided to place another vendor bid at 1Mil (even though it looked as if the bidding would get to this level on its own.) At 1.050 Mil – 100K above the price he quoted initially - and on not yet on the market - he went to have a chat to the vendor, later returning to proudly announce that the reserve had ‘plummeted!’ and we were now ‘very’ close to going on the market!! However another 15K obviously wasn’t good enough for the newly reduced reserve (!) and the property passed in at 1.065Mil to later be negotiated with the winning bidder at 1.1Mil.
Ian James and Catherine Cashmore
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