The Weekend’s Election Result Could See House Price Rises

Source:REIV

Weekend’s Election Result Could Mean House Price Rises

Voting over the weekend meant auction numbers were low with 197 reported by Domain and 181 reported by the REIV.  My question is, who in their right mind would be selling on election day with so much uncertainty? But real estate agent Sven Fischer from Biggin Scott Elsternwick said his office was holding two auctions on Saturday and expected good results.

It seems there was a method to the madness as clearance rates were again solid, 74% (Domain) of properties selling under the hammer on Saturday.

We also saw  a positive response with our two vendor advocacy opens over the weekend in very different areas, Croydon and Balaclava. Both performed well with nearly 10 groups attending each open and multiple buyers showing very good interest.

We also listed a significant development site (combined two residential properties) in Box Hill’s growth zone for over $7.5 million as an off market at the moment. Interest from developers has been exceptionally strong and we expect multiple offers over the coming weeks.

The Reserve Bank is expected to meet on Tuesday to discuss the fate of our interest rates. Experts predict rates will remain on hold until August where a further rate cut is expected.

A grade property continues to be tighlty held in quality areas and clearance rates have been strong. July for many of the affluent is a very quiet period for selling, as families head off on their half yearly holidays. I’m expecting listings to remain low through to August then expect a significant increase in the supply of property after the AFL Grand Finals.

We continue to encourage any potential vendors to bring their plans forward and consider an August sales campaign in order to capitalise on the current market strength. Feel free to call or email me with any questions regarding this at [email protected].

A combination of tightening on investor lending, a slowing economy, falling interest from foreign buyers and increased stock levels all adds up to a softer Spring market. I’m expecting a clearer direction on property once we hit August and once we get further clarity on government.

Source: Shuttesrstock

Did We Dodge the Brexit bullet?

Although it may be a little early to call, it looks like Australia and the rest of the world dodged a bullet from the Britain’s exit from the Eurozone (Brexit). Or is it too early to tell?

Despite enormous falls on global stock markets since the announcement last week, most of the share losses in the Australian sharemarket have regained surprisingly. However whether local and global markets continue to remain stable is another question as many hurdles need to pass to enable the split from the Eurozone.

Over the weekend Australians had the opportunity to re-elect their new prime minister. Malcom Turnbull was favourite to win the top job but this did not prevail. Instead of strengthening his position in parliament Malcolm’s leadership has been dealt a blow with the option of a hung parliament looming and governing through deals with the independents becoming a reality.

What this means for the economy and real estate going forward is more of the same unfortunately. No clear mandate to lead the country by either of the major parties. Government hamstrung without the majority to pass Bills through parliament, leading to confusion, more in-house fighting and uncertainty.

 Should Malcolm Turnbull be returned as Prime Minister, real estate going forward appears to have more certainty. Future property investors won’t experience any changes in capital gains tax or negative gearing for established properties in the short term. Experts like Domain’s Dr Andrew Wilson are even predicting more house price rises.

Core Logic’s Pain and Gain Report

CoreLogic last week released its latest Pain and Gain Property Report (www.corelogic.com.au/pain-gain) which measures the profits and losses of sellers by comparing the most recent sale price to the previous sale price; it shows where profits were earned and losses were made.



A key highlight emanating from the report is that around one third (31.9%) of homes resold for more than double their previous purchase price.

Here are just some of the findings:

March 2016 quarter highlights

•   9.2% of homes resold recorded a gross loss on previous purchase price, up from 8.3% at the end of 2015 and also higher than the 8.8% recorded 12 months ago;

•   Total value of dwellings which resold at a loss over quarter was $362 million with an average loss of $66,073;

•   One third (31.9%) of homes resold for more than double their previous purchase price;

•   Total value of homes which resold at a profit, was recorded at $12.9 billion with the average gross profit recorded at $239,855;

•   6.9% of capital city properties resold at a loss compared to 13.1% of regional properties;

•   5.8% of capital city house resales and 9.4% of unit resales were at a price lower than the previous purchase price;

•   11.2% of combined regional market houses and 19.2% of units resold for less than their previous purchase price;

Proportion of loss-making resales over March 2016 quarter across each capital city was recorded at: 2.1% in Sydney, 5.5% in Melbourne, 7.7% in Brisbane, 9.3% in Adelaide, 16.3% in Perth, 10.2% in Hobart, 21.1% in Darwin and 9.8% in Canberra.

In general, houses recorded less losses than units. Properties resold in regional towns (13.1%) were twice as likely to sell at a loss than capital city properties (6.1%).

Sydney (2.1%) and Melbourne (5.5%) recorded the lowest proportion of loss making resales over the March 2016 quarter.

What our Clients Are Saying?

We would like to thank you for all your hard work, your advice and your attention helping us to secure an excellent investment property.  Being first time investors, you were happy to spend time with us explaining how it all works and always happy to answer our many questions. You sorted through lots of properties according to our brief to finally secure a fantastic place in a great location and at an excellent price. You made negotiating with the vendor’s agent a breeze and your knowledge of the industry and players was a huge advantage.  All in all, we are so glad we had you as our advocate for this purchase and we hope that we can work with you again in the future. Peter and Jenny.

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.