News

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


Richard Branson’s beach house!

RichardBransonEver wanted to live like the rich and famous?

Well for a cool US$47,000 per night you can hire out Richard Branson's own private island for you and your entourage!

The island has 31 staff on hand to attend to every one of your requests, choose either helicopter or speedboat to travel to nearby islands. Recently the island was where one of the owners of Google had his wedding, frequent quests also include Tony Blair, Mick Jagger and the royal family.

Normally the entire Island is hired privately by an individual or group, but during Celebration Weeks, held on selected weeks throughout the year, couples or singles can book one of 14 rooms individually and share the Island with others. This would have to be an experience to remember!

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Auction negotiation tip

doorWith a recent interest rate rise as well as potentially a few more expected we could see a few more auctions passing in, this means you’re going to have to polish up your after auction negotiation skills if attempting the buying process alone.

Here's one highly recommended tip: If the property is passed in to you meaning that your the highest bidder and the selling agent asks you to come inside which is often the case, thank them for the offer however advise them that you would prefer to wait outside while they get the reserve price from the vendor for you to consider.

Physiologically it changes the whole negotiation process when being inside the house after a passed in auction, the pressure is magnified and well and truly on the potential buyer which is you. It also makes it incredibility difficult to find out if any other buyers are interested in the property if you cannot see the streetscape. 

You may be the highest bidder and believe no one else will pay more than you for the property however many people hang back at auctions so this cannot be presumed, however being aware of your surroundings and gauging body language from being outside through the negotiation will certainly give you a lot more power throughout the process.

Beware of inside!

 

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Vendor Advocate?

A lot of people have asked me what is a Vendor advocate and their role during the sale of a property.

A Vendor Advocate has an important role in helping the vendor who is selling a property obtain the best possible outcome including sale price, terms and relieving much of the stress placed on home sellers. This is done by having usually someone who has been a real estate agent before make the selection process on the right real estate agent to look after the sale of the vendor’s property.

Once the Vendor advocate has advised the vendor on the suitable candidate and the real estate agent has been appointed then the vendor advocate has a role to monitor the entire selling process. This would include being in constant touch with the selling agent, helping the Vendor with strategy and any hiccups, attending Auction day and being by the Vendor throughout any negotiation and bidding and helping the Vendor to establish a reserve price. The most important part of the process is that the Vendor advocate ensures the well being and best interests of the vendor are upheld during the entire selling process of ones property.

Often when a vendor is selling a property this can be their biggest asset and it's no surprise that more and more people are turning towards using a vendor advocate to assist them throughout the sale process.

If its your first time selling, you are not quite confident or simply do not want to deal with selling agents then a Vendor advocate could be ideal for your situation.
For more information visit our Sellers Service in our property services section for any additional Vendor advocate information!

 

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Adelaide ‘Backwater’?

adelaidebyair Interstate rivalry well and truly heated up last week when Victorian premier described Adelaide as 'backwater' when it comes to current times. During the week I asked myself what are the prospects like for Adelaide's property market moving forward?

Adelaide to me offers enormous opportunity not seen anywhere in Australia right now. Currently the cheapest city on the mainland, Adelaide’s median house price was recorded at $359,581 last September even after a blistering year for the city in which housing prices roared (2007) up 25.17% according to the financial review.

Manufacturing always a dominant industry in Adelaide is starting to fade with focus moving to the strong Mining sector such as the multibillion dollar expansion of the Olympic Dam uranium site, with Mitsubishi closing during the week and similar trends expected to occur these new emerging industries are happening at just the right time for Adelaide.

Now here's a coupe of quick stats to keep in mind about the strong prospects for Adelaide:

  • Adelaide's highest priced suburb (Unley) has a median sale price of $760,000 which is ranked 102 in the most expensive suburbs nationally, compare this to Toorak Melbourne which has a median of $2,900,000
  • International migration climbed to 13,200 fin 2007, in 2002 the number was only 2,500
  • The government is quickly re zoning land around the city to keep up with expansion
  • Some of Australia's biggest developers such as Devine, Multiplex, Lend Lease and Stockland are making massive acquisitions in Adelaide. Billionaire Lang Walker has recently announced plans to create a $2 Billion satellite city just North of Adelaide

Feel free to contact us should you have any interest in purchasing a property in Adelaide, like all opportunities they disappear quite quickly!

 

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Government not happy

The Government this morning has conveyed its disappointment with the Commonwealth's bank decision to raise interest rates more than the increase set by the reserve bank of Australia and has warned other lenders looking at doing the same thing.

They have also indicated they are looking at increasing the competition in the home loan market by allowing people to change lenders throughout a loan period more easily and forcing the lenders to charge lower fees for doing so.

This would be a great move and one which should be applauded, the new government is under great pressure from the public about this issue as it was of course such a hot issue in the recent election.

 

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Which bank lifted interest rates by more that 0.25%? The Commonwealth Bank

As the Reserve Bank of Australia lifted rates by the 0.25% on Tuesday, Commonwealth Bank adjusted their rates by an additional 0.05% to make the total move a 0.30% increase for their customers.

In an interesting move Commonwealth Bank blamed the USA Sub prime disaster as to one of the core reasons why this adjustment had to take place. I would have thought that any exposure the Bank had created for itself by getting tangled up in the mess should be carried by itself rather than the customer.

What can you do if you have an existing home loan with Commonwealth Bank? Customers can vote with their feet and look at re financing with another burrower or swap over their general banking, I think then the bank will take a closer look at the whole situation!

 

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Is Perth still the boom town?

perthIt would be fair to say that no where else in Australia has a city prospered as much as Perth when it comes to housing prices over the past 5 year.

Western Australia's abundance of natural resources is the premier reason for the startling growth in Perth however recently the market has cooled some what with only small gains in the median housing prices over the past 12 months. Currently it's one of the highest in the country with a median price of $466,000.

Many experts predicted a 'boom and bust' scenario for the Perth market however a lot of data points more towards a stable market with steady house prices letting the market 'catch up'.

The very noticeable factor with the Perth market is the amount of local investors purchasing in other capital cities across Australia. I remember when I was selling property and the amount of calls I used to field from Perth investors was amazing and out numbered any other parts of Australia for enquiries on properties.

The main reason in my opinion is that Perth has the lowest rental yield out of all capital cities in Australia.  The city is starting to catch up though as rents rose 23% in 2007. With Perth's vacancy rate dropping to 1.9% it is expected rents should raise further prompting better returns for investors.

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Interest rate alert

For the 3rd time in 6 months the Reserve Bank of Australia has raised official interest rates by a quarter of a percentage point to 7.0%.

Inflation has been blamed for the latest increase which was above the RBA's 2-3% threshold. On an average mortgage of $250,000 this is expected to add approx $52 per month to the loan repayment, while the outer city is not totally immune it should adapt to the new change.

For outer districts of Melbourne this is where the latest rate rise will more than likely hurt.

 

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Why won’t they contact me?

Often in hot property markets it can be frustrating getting in contact with a real estate agent s about a desired property. The reason is simple, when the property market is hot, properties sell themselves.

The main focus of a real estate agent can often be getting the next listing for sale, that’s why often people who are selling a property can expect a call almost everyday while a buyer can leave many messages without ever getting a follow up call back!

Good real estate agents will always follow up with purchasers as they should however it is easy to get complacent in these strong times. If the market does turn then who knows we may see the Real Estate bore in action!


American interest rates

americanflag1Overnight the American Fed has cut interest rates for the 2nd time in 9 days. The .5% cut has now reduced the short term rate to just 3% with many experts believing the Fed will cut rates by a further .25% in March.

With America on the verge of a recession and it's housing prices in retreat it is often discussed how this affects Australia's future and its housing market.
America slowed to 0.6% annual growth in the last quarter of 2007 which is completely different to where the Australian economy has been heading, the OECD forecasts the Australian economy to grow by 3.3% in 2008.

While not immune to the sub prime disaster that's happening in the USA at the moment, Australia has not got it self into the same mess. If you are looking for a sign at the moment then look at all the credit card companies pitching ads with very low rates for credit card debt transfers!

In fact because of our strength not through lack of it we may see a further interest rate rise shortly, this is sure to test the outer suburbs of capital cities but I feel will leave the inner city area's largely unaffected with strong house growth predicted again this year.

Australia has a diversified group of trading partners; Australia has been ranked the most resilient economy in the world for 5 of the past 6 years (IMDWCY2007) in part because of that.
Asia forms the majority of who we trade with and has a large affect on the strength of our economy, currently this is strong and is predicted to keep growing and quickly!

While no country is immune to changing economic conditions, Australia's future and property market look strong for the outlook ahead while home owners in America should brace themselves for some tough times still ahead!

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