Sydney auction fatigue a risk
Sydney auction fatigue a risk
Posted on Wednesday, November 20 2013 at 3:37 PM
High clearance rates and limited stock could result in buyers suffering ‘auction fatigue’, according to one real estate agent.
Braden Walters, principal of True Property and Real Estate Institute of
New South Wales 2013 Salesperson of the Year, says sellers may start adopting other
sale methods if buyers continue to miss out at auction.
“If they miss out on five or six or seven auctions in a row, you’ll find
there’s a lot of negativity from the buyers around the auction.”
Walters says some sellers will start turning this to their advantage by
creating a marketing point of difference.
“If you start getting into an environment where buyers are shying away
from auctions because they’ve been burnt by them, then there’s an opportunity
to go against the crowd and put a price on the property.”
Sydney and Melbourne have been achieving clearance rates around 80 per
cent in 2013, and this can result in buyers becoming disillusioned with the
process.
Walters says despite this, he still considers taking your property to
bidders as the most effective method of marketing.
“Auctions work in any market.
“If the market is falling or is on a slight decline, the auction
strategy is great because it draws a line in the sand for buyers to make a
decision if they want to buy it.”
Walter says while most properties will suit the process, auctions
achieve their best outcome with uncommon real estate.
“As an agent, if you see a property that they’ve renovated really
uniquely, or its in a location were there hasn’t been any recent comparable
sales, you may find the auction strategy is much better because buyers will
come and get emotionally attached to it regardless of the price.”
John Potter, author of A Property Investor’s Guide to Negotiating, says
auctions continue to be the most effective method for achieving a sale if
there’s pressure to sell and you’re prepared to meet the market.
“Auction is the best way to go because you’ll get a result on the day,
or at the very least you’ll get an indication of where the market lies.”
Potter says it’s more important to read the property cycle and level of
demand accurately.
He says having your property ‘pass in’ can put you on the back foot.
“You can be unlucky and have a good property but, for one reason or
another, you don’t get the interest that you’d have liked, and the price it’s
passed in at has exposed what you’re going to take, so you’re open to the
vultures a bit. “That can be a bit of a disadvantage, but in most cases,
auctions work well.”
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Rental vacancies drop nationally
Rental vacancies drop nationally
Posted on Monday, November 18 2013 at 8:38 AM
Data released by SQM Research shows rental vacancy rates continue to fall across Australia.
The researcher says
during October this year, the vacancy rate fell to two per cent with a total of
57,471 vacancies nationwide.
Five of the
country’s eight capital cities saw their vacancies decline.
Hobart had the
largest percentage drop in the month with a fall of 0.3 per cent.
Adelaide had the
next largest fall recording a 0.2 per cent drop.
Other capitals to
see vacancies reduce were Sydney, Perth and Canberra.
Melbourne’s
vacancy rate held steady, while Brisbane and Darwin saw a rise of 0.1 per cent
during the month.
SQM says Hobart is likely to see some upwards sustained pressure on
rents as it’s clearly recording lower vacancies than 12 months ago.
Louis Christopher, managing director at SQM Research, says this is the
fourth straight month of a national tightening in vacancies.
Christopher notes the numbers for Sydney in particular are unusual.
“We know the sales market is very active and normally, in most
recoveries, vacancies rise as renters turn themselves into first homebuyers,
“But Sydney is now recording a very tight vacancy rate of 1.5 per cent.”
Christopher says this shows first homebuyers are remaining renters for
longer in the New South Wales capital.
“If Sydney vacancies remain this low, that will put renewed upward
pressure on rents again for next year.”
While the results are positive for landlords, SQM Research does expect
vacancies to begin to rise in the lead up to Christmas as part of the normal
yearly cycle.
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Landlords urged to prioritise repairs
Landlords urged to prioritise repairs
Posted on Friday, November 15 2013 at 11:00 AM
Landlords and real estate agents have been warned to ensure regular maintenance of their properties after a Melbourne man was awarded $300,000 for injuries sustained after a balcony collapse.
Three people were injured at the rental property when the balustrade of
a balcony collapsed causing them to fall approximately five metres.
Trang Tran, senior associate with Maurice Blackburn Lawyers, says the
balcony wasn’t property maintained or routinely inspected.
Tran represented the injured man who successfully sued his landlord.
“Our client sustained severe injuries to his arm and shoulder that
have resulted in multiple hospitalisations and surgery, including a total
shoulder replacement,” Tran says.
“He remains in constant pain and discomfort. This case highlights the
need to ensure premises are properly and adequately inspected and kept in good
repair to avoid serious injuries and even death to tenants and visitors.”
It was revealed that repair work done prior to the man’s tenancy wasn’t
adequately performed.
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More new housing and renovation investments
More new housing and renovation investments
Posted on Thursday, November 14 2013 at 11:59 AM
New dwelling commencements will improve and renovation investments will increase in 2014, according to the latest report from the Housing Industry Association (HIA).
The improvements will match the highs achieved during the post-GFC
stimulus with dwelling commencements lifting above 170,000 per year by 2016/17,
HIA senior economist Shane Garrett says.
“The improving level of dwelling commencements achieved in 2012/13 will
be consolidated this year before moving up a further leg in 2014/15,” he says.
“Growth in housing starts during 2013/14 will be concentrated in large
states like New South Wales, Queensland and Western Australia.”
Garrett says the growth in renovations will be much more broad-based
with increases occurring across most states.
In order to maintain the momentum Garrett called on state and federal
governments to look at addressing issues impeding the industry such as land
supply, infrastructure and planning approval delays.
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Average Aussie house size continues to shrink
Average Aussie house size continues to shrink
Posted on Tuesday, November 12 2013 at 11:53 AM
While new homes in Australia remain among the biggest in the world, the average floor size of dwellings built has fallen to an 11-year low.
Analysis by CommSec has found that the
McMansion trend – a massive, oversized house with more space than is reasonably
needed – looks to be coming to an end.
The shift from building bigger homes is a
profound one, CommSec says, and illustrates how Australia’s demographics and
lifestyle drivers continue to change.
“In part, generation Y are driving the
trend, but baby boomers are also in the process of downsizing, perhaps selling
their four to five-bedroom homes in preference for retirement homes or city
pads,” the CommSec analysis report says.
New houses built in 2012-13 had an average
floor area of 241 square metres, which represented a reduction of 1.6 per cent
on the previous year.
In contrast, the average floor area of new
apartments rose by 1.3 per cent to 133 square metres over the same period.
But overall, the average size of all newly
constructed dwellings fell 1.9 per cent in the past financial year, the fourth
consecutive year of space consolidation and the smallest home size recorded in
11 years.
CommSec chief economist Craig James says
the move towards smaller homes is thanks to a focus on “experiences” rather
than an aspiration for a “bigger castle”.
Travel, attending sporting events and
eating out at restaurants and cafés are more desirable to the average
Australian than a sprawling home, he believes.
“Aussies are building smaller homes and
utilising the homes more efficiently. That is, more people are occupying houses
and apartments. The new trends mean less demand for building materials while
fewer homes need to be built to accommodate the expanding population.”
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Push for Galilee Basin development
Push for Galilee Basin development
Posted on Thursday, November 07 2013 at 3:29 PM
A State Government initiative promoting fast-tracked development of the Galilee Basin in Queensland has been announced by Premier Campbell Newman.
The
Galilee Basin
Development Strategy has been released in a bid to grow the
resources sector in this region and encourage private sector investment to
facilitate this.
Newman
says the strategy will fast-track environmental approvals, improve
infrastructure such as power, water and rail, as well as support the transport
of coal to port by streamlining land acquisition and reducing red tape.
Deputy Premier Jeff Seeney
says the proposed projects for the region have a total forecast investment of
$28.4 billion and would provide more than 15,000 jobs during construction.
“Companies that are
currently investigating opening mines in the Galilee Basin are contemplating
many billions of dollars of investments,” Seeney says.
Due to the large financial
outlay required to get resource projects off the ground
and the long lead times between financial commitment and shipping the first
coal, the government will offer companies incentives, Seeney says.
“The Galilee Basin Development Strategy is designed to
encourage first movers – those proponents whom the government consider would
play a vital role in opening up the basin for their own projects and opening up
the basin for other miners as well.
“The Newman Government is
offering a ramp-up-to-royalty initiative whereby the government will consider
offering reduced royalties for an initial period of time,” he says.
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Cash splash for first-time new homebuyers in Tasmania
Posted on Friday, November 08 2013 at 4:10 PM
First homebuyers in Tasmania who buy or build a new home will now get double the government grant to do so.
Premier Lara Giddings today announced a
“supercharging” of the First Home Builder Boost to $30,000, in a bid to
stimulate activity in the construction industry.
That’s an immediate increase from the
$15,000 cash splash, which was boosted last year from the previous $7000
incentive.
Back then, it was hoped the extra
generosity would spark a slew of first-time buyers, but take-up was slower than
expected.
“It was always expected the applications
would accelerate over time, but we recognise the need to create jobs right
now,” Giddings says.
“Builders have told us there has been a lot
of interest from people wanting to build their first home, but they needed more
time to accumulate a deposit. This is why we’ve taken the decision to
turbo-charge the incentive.”
Based on the average cost of building a new
home, the grant should cover most of the deposit required, Giddings believes.
The grant is now the most generous in
Australia. The boosted scheme will run until December 2014.
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Melbourne Cup day rate hold was always a safe bet
Posted on Tuesday, November 05 2013 at 2:52 PM
While the Melbourne Cup captivated millions of Australians, the RBA Board held its monthly meeting and reaffirmed its stance that interest rates should hold steady.
RP Data research director Tim Lawless says
the move came as no surprise and, from a housing market perspective, the
current rate setting is sufficient.
“(It’s) clearly having the intended effect
of encouraging more buyers into the housing market, stimulating new housing
construction,” Lawless says.
Home sale transaction numbers are about 20
per cent higher than they were this time last year, while dwelling values
across the combined capital cities have risen by 7.9 per cent in the past 12
months, he says.
“The RBA has on several occasions now
stated that they’re comfortable with the level of capital gains in the housing
market.
“In fact, the current rate of growth is
well below the highs achieved over previous growth cycles and dwelling values
(in) every capital city apart from Sydney remain below their previous peaks.”
Recent inflation, unemployment and economic
growth data also likely contributed to the decision to leave the cash rate on
hold.
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Sydney leads the property value charge
Sydney leads the property value charge
Posted on Monday, November 04 2013 at 3:51 PM
Numbers released by the Australian Bureau of Statistics (ABS) confirm Sydney as the number one capital city for property value growth across the nation.
According to the ABS, the established house price index for Sydney
rose 3.6 per cent, the largest for any capital in the September 2013 quarter.
Melbourne took second spot with a gain of 1.9 per cent
for the quarter, while Brisbane saw a 1.2 per cent rise to round out the top
three spots.
The eight capital city weighted average increased 1.9
per cent in the quarter, for a total rise of 7.6 per cent over the past year.
“This is the first time
since 2010 that the capital city average has shown four consecutive quarters of
growth year on year,” says Robin Ashburn, spokesperson for the ABS.
“Sydney’s rises were
broad based in the September quarter, with most areas going up, but prices were
mixed in Melbourne, with some areas showing rises and others falls.”
The dark horse was Hobart, which came in fourth for quarterly
capital growth with a 1.4 per cent gain.
This presents good news for the Tasmanian capital as it
continues to look forward to coming off its low base.
Adrian Kelly, president of the Real Estate Institute
of Tasmania, says the good result is being reflected in their numbers too.
“I’m not surprised… our own quarterly figures came out
and they show a little bit larger increase than that. That was pretty much the
same (result) right around the state.
“The other thing we’ve recorded is the volume of sales
being transacted is 17 per cent greater than the same time last year, so the
number of sales is being correlated with property values.
“Everyone’s saying that this calendar year is the best
we’ve had in the last five or six years.”
Other capital city price movements include Perth and
Darwin, up 0.2 per cent and 1.4 per cent respectively.
The two cities to fall in value were Canberra,
which dropped 1.2 per cent, and Adelaide down 0.6 per cent for the three
months.
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House prices continue to rise
House prices continue to rise
Posted on Friday, November 01 2013 at 12:22 PM
Capital city dwelling values increased by 1.3 per cent over the month of October, driven largely by the strong-performing Sydney market.
Data released today by RP Data and Rismark
international shows a continued growth across many markets, with the rolling 12
month combined capital city index recording its fastest pace in three years.
Across all the capitals, home values are
now up 7.9 per cent over the past 12 months and 8.2 per cent over the year to
date.
RP Data senior research analyst Cameron
Kusher says Sydney and Melbourne are continuing to have a strong influence on
the national result.
“Sydney home values increased by 2.4 per
cent in October and have increased by 5.5 per cent over the past three months,”
Kusher says.
“In Melbourne, home values increased by 1.2
per cent in October and recorded an increase of 3.8 per cent over the past
three months.
“For the first 10 months of this year,
Sydney and Melbourne home values have performed very strongly, achieving growth
of 13.4 per cent and 8.7 per cent respectively.”
After several somewhat sluggish months,
Brisbane home values posted a 1.4 per cent increase in October, however median
prices in the Queensland capital remain some 8.4 per cent below the previous
peak.
Ben Skilbeck, chief executive officer of
Rismark international, says there are signs of growing confidence in Brisbane.
“While Brisbane auction clearance rates are
typically low in comparison to Sydney and Melbourne, due to differences in the
preferred sale mechanism, Brisbane clearance rates are approaching the 50 per
cent mark.
“That was last consistently observed in
2009 when values increased by 7.1 per cent over the year.”
Elsewhere, the October index results confirmed
that dwelling values also rose in Adelaide by 0.3 per cent and Darwin by 1.6
per cent.
It was a different story in other centres
where dips were recorded, with a 0.2 per cent slip in Perth, a 2.3 per cent
decline in Hobart and a 1.5 per cent fall in Canberra.
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