News

The latest happenings in the Melbourne property market. For our Essays and The Secret Agent Report, see our Research page.


Category Archives For: Economy

Improving transparency

Over the past week I attended the Inman Connect conference in San Francisco. This is where innovation and Real Estate meet. What I see coming to our property market shortly is stronger transparency. Sites such as yelp.com give consumers a megaphone by rating those professionals who do the right thing, as well as those who don't perform up to the standard.

Already I'm noticing that people are reviewing Real Estate business's on their performance through Google etc. Many companies that have performed poorly over previous years will not have the same luxury moving forward.

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Back from the US

I just got back from America yesterday where I attended a conference in San Francisco. Amazing technology advances to come to Real Estate here soon. More shortly…

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Melbourne set to get even bigger

The Melbourne metropolitan area is set to grow by another 41,000 hectares to accommodate an extra 415,000 people, under a 20 year growth and transport plan released by the Brumby Government.

The main expansion, that will run along the Hume Freeway and past Caroline Springs will add new housing estates, to what is already known as one of the fasting growing metropolitan areas.

It seems these developments will be quickly receipted, due to the states huge population boom, with over 2000 people entering Victoria each week. The Housing Industry Association and the Property Council both welcomed the expansion of the urban growth boundary, but expressed disappointed it was being linked to growth areas taxes, where the government is anticipated to collect $2 billion over the next 20 years.

Not everyone is to be happy with the Government plan. Planning experts and green groups have strongly criticised the plans, accusing the Government of abandoning its policy of urban containment and of turning over environmentally sensitive land to developers.

It will be of interest to watch how this development plays out over the next few years.

Source; The Age Online

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Increase in affordibility

Throughout the March quarter this year Australian's have experienced the highest level of affordability in house prices in almost six years!

The most significant improvement in affordability is seen in Victoria, where the proportion of family income required to meet loan repayments decreased by 4.45% since the last quarter. Rental affordability in Victoria remained stable throughout the March quarter, securing Victoria’s position as the second most affordable state in which to rent a property.

At the end of the March quarter, there were 44,487 first home buyers in the Australian property market; this is compared to 36,098 in the December quarter 2008.

Through these statistics, provided by the Real Estate Institute of Victoria it becomes clear that the continuing cuts to interest rates and the financial assistance to first home buyers have featured as the most important factors in driving the Melbourne property market.

It will be interesting to see how the market moves from here on.

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Coastal activity

An interesting surge has happened with some coastal property of late. Especially the $1 Million market.

It will be interesting to see how this will trend over the coming months of Winter.

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Unemployment drops?

Unemployment is an important indication to consider when looking at house prices.

News is that unemployment has actually fallen to 5.4% from 5.7%. This has set markets abuzz today.

Without being a pessimist, I don't think that something is right with those figures. The next couple of months will surely see another rise. These figures are seasonally adjusted.

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Melbourne’s population is set to be 4 Million by the end of the year.

According to the bureau of statistics, Melbourne's population increased by a whopping 2% or approx: 150,000, people over a year period.

With all the negative press about at the moment, I think we also have to look at were we sit. Melbourne is very much a growth city, people want to live here and that will put more and more pressure on house prices to rise.

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London on tough times

A place were conditions are 'really tough' is the London property
market at the moment.

Many traditional estate agency's have gone broke or have shut down
operations. Sales prices have come back to 2004/2005 levels which is
interesting.

What is also concerning, is that rents have dropped too. Many vendors
who couldn't sell their property, decided instead to get a tenant in
to help pay the mortgage.

With a heap of new property coming on the market for rent, the market
has become saturated and rents have also dropped back sharply.

London has always had an incredibly high proportion of its population
that are renters compared to say Melbourne.

So is this going to happen here?

It's highly unlikely.Vacancy rates have dropped again to now below 1%
in many parts of Melbourne. This is incredible, and working in London
before: I know they always tended to be well supplied with rental
properties.

We have a problem that is in fact, the other way around. We simply do
not have enough housing.

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A thought on Private Sales

Melbourne is the auction capital of the world.

Buyers expect property to be auctioned in our inner city areas, so when a 'private sale' is listed, a property buyer's normal response is 'was the property passed in at auction?'

The rate of vendors selling by 'private sale' has increased substantially over the past 12 months.

Many owners see a 'private sale' as a less risky alternative considering most properties marketed by this method don't have the same advertising expenditure for the owner. If a vendor doesn't sell, then there's less to cough up in terms of advertising money.

Many people ask me 'is a private sale an effective way to sell?'. The answer is yes, providing the property is priced right.

Often when a property is first fresh on the market it has it's best chance of selling well. Price the property too high from the start and a vendor can easily end up worse off as a result. The market comes through and they don't come back unless they see a discounted house.

A property buyer can do well by targeting a 'private sale' that has been sitting on the market for some time. As the price drops and the motivation of the vendor increases, a good purchase can be had.

Buyers can procrastinate when buying a property under 'private sale' conditions as well. The pressure is 'seen' as eased as no deadline looms like an auction date. However, if it's well priced and what you want. Don't wait act! Speed of making a decision to offer and purchase is paramount with Private sales.

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Population surge

Melbourne will need to accommodate an additional 1.8 Million people by 2036 according to a serious of reports. A very interesting article can be found here.

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