Avogate Reeks Havoc Among Millennials

Source:REIV

Melbourne Market Wrap October 23rd, 2016

A clearance rate of 81 per cent was recorded this weekend compared to 77 per cent last weekend and 69 per cent this weekend last year. There were 1114 auctions reported to the REIV, with 907 selling and 207 being passed in, 86 of those on a vendor bid. Auction sales have reached a six-month peak in the past fortnight – boosted by strong buyer interest in Melbourne’s northern suburbs.

Boom time conditions are appearing to surface in some parts of Melbourne. Pent up demand from buyers and a lack of supply is keeping clearance rates and prices high.

The 26th of November and 5th of December are already shaping up as very busy auction weekends. Some real estate agents are expecting to see a very late run in December as would be vendors scramble to sell before Christmas.

Source: Flick Kathryn Lym

Avogate Reeks Havoc Among Millennials

Unless you are a diehard passionate property market buff like myself, the continual market rhetoric can get on the nose after a while and become somewhat boring. After all, there’s usually a limit to the number of median house price growth stories most readers can take.  

So when well respected demographer Bernard Salt wrote a column last week about millennials more concerned about eating smashed avo brunch than saving for a home, a storm erupted.

Basically, Mr Salt was highlighting how frequenting hipster coffee houses, eating smashed avocado brunches at $22 a pop and drinking craft beers could impact saving for a deposit. So rather than whining about baby boomers rolling in cash and property assets, perhaps millennials should reevaluate their lifestyle and consider curbing their spending habits if buying a property is a priority. To say the least the response to Mr Salt’s tongue in cheek article was met with vitriol and condemnation.

It so happens “Avogate” as it was known had one last sting in its tale. For those of you who remember, last Friday was a miserable day, absolutely pelting down with rain. Just as well I arrived a little early at a hipster cafe for a client meeting, because it was jam-packed. The waitress informed me that I was fourth in line on the waiting list for a table, to which I responded “doesn’t anyone work anymore” ?

I couldn’t believe there were so many millennials converging in one place at 11.30am on a Friday. She politely informed that Friday’s were one of the busiest days of the week, go figure, must be that smashed avo!

The latest unemployment figures also released last week support the notion that full time employment is falling while part time is increasing, maybe that explains the cafe queue? However economists suggest this “underemployment phenomenon” means the power of our spending is reduced in line with current poor retail figures. These figures must be excluding hipster coffee houses, surely!

Here’s a thought, if property prices keep rising, enough equity will be created for the Bank of Mum and Dad to help millennials purchase their property. And prove once and for all that you can have your smashed avo and house too!

Rain, Hail or Shine in a Booming Market

Over the weekend I witnessed firsthand the strength of the current property market, particularly in the sub $600,000 price range. First time buyers seem to be out in full force for anything near the inner city with some land.

My latest client and I were conducting due diligence on a property being quoted $420 – $460,000 in Brunswick. It was a two bedroom villa unit which had some updates done for the sale. During the process we found a number of issues, discrepancies with the land boundaries, common land in the rear and front yard and a number of maintenance concerns in the kitchen, bathroom and gutters.

We know every property has its own set of challenges, which is why this process is so important. Our aim when buying a home is to mitigate risk and make the buyer aware of any potential issues which could impact the property’s value and the client’s livability. At the end of the day we thought this property had too many challenges and was a potential risk for our client so decided to pass.

Despite this and the terrible weather on Saturday over 80 groups thought otherwise and turned out to observe/bid at the auction. My gut feeling based on the feedback and number of buyer inspections thus far was that the property would sell in the low to mid $500,000 range. Even this optimistic figure was surpassed when five bidders eager to secure the property pushed the price all the way to a staggering $585,000. 

My observation on the result was that it was more a case of lack of supply and a “buy at all cost” from desperate buyers rather than a common sense approach. Panic buying for certain property types in select suburbs seems to be setting in as Christmas nears.

Street Advocate Client Reviews

Peter,

Just a short note to thank you once again for your help in selling the property.

Dealing with you Peter was a pleasant experience, you were very professional with all aspects of the sale including:

·         Your knowledge of the real estate industry

·         Negotiating down the agents fee.

·         You understanding what marketing campaign was needed and directed the agent accordingly

·         Keeping me up to date by communicating via phone, text , email and weekly meetings

Not only will I use you in the future but I would have no problem recommending other vendors to you.

Thanks once again, Arnie Nuzzo

6 Highett Rd, Hampton

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