How To Research Your Next Great Property Purchase

Melbourne Auction Results 21st of August 2016
75% Clearance Rate 646 Reported Auctions	Sold at Auction:	487
	Passed in:	159
	Sold Before:	50
	Sold After:	2

Source:REIV

 

Market Wrap

A clearance rate of 75 per cent was recorded this weekend compared to 79 per cent last weekend and 74 per cent this weekend last year. There were 646 auctions reported to the REIV, with 487 selling and 159 being passed in, 66 of those on a vendor bid. Last week saw the highest clearance rate of the year – 79 per cent – from 544 auctions held.

I still see this as a very tricky market which is already throwing up surprises to the uneducated vendor. A good example was the sale we made for our client’s property in Richmond last week prior to auction.

Closely working with the agent and  monitoring our competition and market we brought forward an offer and acceptable sale. This was in contrast to two other competing properties, both failing to sell on Saturday.

Yes, our newly married couple Josh and Teresa were thrilled and the result!

 

Source: Census

How To Research Your Next Property Purchase

The past few weeks I have been giving away some tips to our loyal readers. Hopefully some of you have given some further thoughts and conducted your own research as to where the best property buys will be next.

My first purchase of a two bedroom flat in a block of eight back in 1997 was one of my best. The main reason why it increased fivefold over fifteen years came down to position, buying well and holding.

Why did I buy this property in the first place? Affordability and i was renting a one bedroom in the same block! I grew up in the same area, went to school and so I had a fair idea of price and how the market reacted in a downturn.

However when I began investing more seriously I turned to statistics and trends. The first port of call for most property investors are the major real estate portals, but unfortunately they won’t give much away in terms of predicting trends.

A document known as “Melbourne 2030” which discussed the working hubs, satellite cities, proposed population growth and infrastructure projects became my reference and bible for some time. Highlighted within the document were key suburbs which have now boomed, Ringwood, Box Hill and Sunshine to name a few. Too conservative to go into areas unknown I focused on the growing trend of single household residences and invested accordingly.

The Victorian Government released a newer Plan Melbourne in 2014 now due for an update and a rerelease later this year after community and stakeholder consultation.

The plan will reflect a long‐term vision for housing, increasing jobs and liveability, integrating public transport and infrastructure and addressing climate change.

The current 2014 and proposed 2016 Plan will give investors and property buyers alike a snapshot into what Melbourne as a city will look like and will serve as good property guide. 

For those of you interested in growing your property portfolio this document should serve as an invaluable guide for the future see link below.

Plan Melbourne

 

How Will Census Help Property?

A couple of weeks ago we were encouraged by Government to participate in the Census survey which will help shape how we plan for the future and help Melbourne continue to hold the mantel as the Most Liveable City in the world. Findings from this data will again point to current and future trends for property prices.

Property expert Louis Christopher of SQM Research explains, “The data collected has been extraordinarily useful in working out demographic trends that affect the housing market.” Census helps to identify trends, to accurately measure population growth and infrastructure spending, analyse our workforce and national demographics, and, of particular interest to us – the survey assists in illustrating shifts in home ownership.

Michael Matusik of Matusik Property Insights analyses the trends expected to emerge and what they will mean for the housing sector.

What are the projected take always from this year’s Census?

1. The downward shift in home ownership will result in a need for less new houses.

2. Current homes will need to accommodate for sharing – eg. by tenants or blended families.

3. Convenient location is regarded as the highest consideration.

4. Many residents will be forced to compromise on housing choice.

5. Property and rental fees will settle, if not fall.

6. Tenants will increase, but with limited money available for rent.

7. Increase in multi-property investors dominating the market.

8. Increase in redevelopment for residential returns.

 

Street Advocate: Agents Underquoting in Richmond

I’m not sure whether its me or whether there is something very wrong with the way real estate is done at the moment.

As i mentioned earlier we successfully sold a property prior to auction last week while my clients were on their honeymoon. Most of you would be thinking what’s the big deal Peter? Well the big deal was there were two other comparable properties being marketed with an extra bedroom in the same suburb which didn’t sell on Saturday, one quoted well below the vendor’s reserve price.

What annoyed me is the rampant underquoting in the area. On the one hand Consumer Affairs and the REIV were promoting their new regulations aimed at abolishing underquoting by the end of this year.  At the same time, our vendors were competing against these two townhouses in Richmond one quoted over $850,000 which on Saturday was passed in for $975,000 with a vendor reserve of $1.10mil (published in Sunday’s Age, 21^st Aug). How does this happen, what a farce!

I mean this is in the same suburb – Richmond, where Hocking Stuart were caught and prosecuted by Consumer Affairs for underquoting so you would think agents would be more cautious? Obviously not! I can only assume one of two things from this type of action, either agents are so desperate for business they will risk their livelihood for a sale or they don’t believe the penalties being dished out are heavy enough to justify change or both.

When agents are getting $15,000 plus in commission per sale and the imposed fines are just over $30,000 or two deals, you begin to understand why the proposed penalties for underquoting won’t eradicate this practice.

My suggestion to Consumer Affairs and the REIV is to enforce the type of penalties being used when breaching a Real Estate Agent’s Trust Account. This includes big fines, loss of license and jail time for those caught.

I have seen two instances of late where companies have been caught doing the wrong thing and yet are still trading. The real estate industry including my industry – advocacy, which I call the New Wild West, is poorly regulated and needs an overhaul. No wonder so many consumers rate real estate as one of the least trusted professions, how sad.

So if you are thinking of hiring a buyer advocate makes sure they offer a no obligation release from their authority and 100% refund on their fee if you are unhappy. We do!!

 

What our Clients Are Saying?

We found Peter Sarmas from Street Advocate took the hassle out of finding the right agent to sell our property and ensured a maximum result. By using Peter and his company we avoided the need to come up to speed on the most effective way to sell our property, as Peter has many years of experience to leverage on.

Not only did Peter find the best agent and negotiate a great commission rate for us, his fee was included in this negotiated fee! He kept up to date weekly with all the details, allowing us to focus on other things. We got a fantastic outcome, $130k above the reserve price. For us using Peter again would be a no-brainer.

Karl and Henty Punt, 118 Bridge St, Eltham

Thinking of buying or selling a home?

Visit our Street Advocate website or send an enquiry below or just call

Peter Sarmas on 0418 740 606.