29-Nov-2010
The metropolitan rental market continues to be in a state of imbalance, with vacancies more than outweighed by renters.
The rental vacancy rate for Melbourne in September was 1.4 per cent, a minor reduction compared to June when it was 1.5 per cent.
In the inner city the vacancy rate improved from 1.1 to 1.4 per cent; in the middle suburbs it reduced from two per cent to 1.8 per cent; and the outer suburbs retained the tightest rental market, with a 0.7 per cent rental vacancy rate compared to 0.8 per cent in June.
The lack of available rental homes continues to drive increases in rents. According to the Office of Housing, the rent for a three-bedroom home has, depending on the location, increased by between 3.9 and 11 per cent over the last year. The comparative figure for a two-bedroom unit or apartment is a rise of between 3.1 and 8.3 per cent.
There continues to be no improvement possible in the short- to medium-term.
Conditions in the regional Victoria rental market was very similar to the metropolitan one, with a rental vacancy rate of 0.7 per cent in September compared to one per cent in June.
The Bendigo region continues to have the lowest level of available rental homes, with a vacancy rate of 0.2 per cent compared to 0.4 in June. In the Geelong region it dropped from 1.3 per cent in June to 0.9 per cent in September and in the Ballarat region there was a small improvement from one to 1.2 per cent.
Sunday, November 28, 2010
Tuesday, November 23, 2010
Weekly Market Comment, November 22nd 2010
November 22nd
According to the REIV we are at the start of the busiest 4 week period in Melbourne Residential auction history. Whilst there were over 1000 auctions gazetted for the weekend, as is becoming normal, many were not reported. 893 auctions were reported and we saw an average result of 59%. As an overall clearance rate for the week, this estimate will be close but probably revised down possibly 1 or 2 percentage points. Total sales were also fairly low at only 1047 reported for the week.
There are another three weeks of auctions meant to be in excess of 1000. Add this to the usual private sales for the week and we should see total sales of around 1400 per week. I would hazard a guess it may end up being closer to 1200 per week. It is definitely a buyers’ market at the moment.
However, good property still sells very well. The auction of a 3 level warehouse apartment located in Ascot Vale and was quoted at $550,000 - $595,000. Warehouse apartments have become hugely popular, and seem to sell well in all types of markets. This property in particular had a great floor plan and had some ‘wow’ factor about it. The auction was opened on a genuine bid of $500,000 and announce on the market at $605,000. There were five bidders in total, which for this market is strong competition. The comparable were showing that the property was worth low $600,000’s, the property sold at $656,000.
I notice the media are still talking about low quotes. One of the reporters even saying “if you want a fair idea of what the house you want to buy at auction is worth, add up to 15% on the advertised price and you might be somewhere near the final result”. That is absolutely ridiculous. You could end up paying 20% more than a property is worth. They still have not got it yet! The media and even government departments like Consumer Affairs still want to have a say in how a property is priced. For some reason they just don’t get it. The vendors’ agent is contractually obligated to assist only the vendor. No legislation will ever stand up to scrutiny that weakens the position of the party who is paying for assistance over the party that is not.
Furthermore the media are not really looking at one of the more important changes to legislation. Section 55 of the Estate Agents Act is being changed. The rules previously required a Real Estate agent, his relatives, or employees, to undergo a full independent assessment by the director of CAV with supporting documentation involving a written valuation by an independent Valuer if they wanted to purchase any piece of real estate their agency’s selling. The process is long winded and penalties for breach are serious.
Now the safeguards that were in place have been hand balled to the vendors solicitor or conveyancer. Most people in this profession would have absolutely no idea of what is a fair price or not. I wonder if these professions even have professional indemnity insurance to appraise the value of a home. It is bizarre that the Minister for Consumer Affairs is more worried about cutting down on paperwork than safeguarding vulnerable consumers.
Next weekend we have the State Election. Whilst the outcome may change a few things, the uncertainty may play heavily on the market. If we have anything close to a hung parliament like our Federal politicians are currently enduring then we are in for some interesting times between now and Christmas.
Article courtesy of JPP Buyers advocates www.jpp.com.au
According to the REIV we are at the start of the busiest 4 week period in Melbourne Residential auction history. Whilst there were over 1000 auctions gazetted for the weekend, as is becoming normal, many were not reported. 893 auctions were reported and we saw an average result of 59%. As an overall clearance rate for the week, this estimate will be close but probably revised down possibly 1 or 2 percentage points. Total sales were also fairly low at only 1047 reported for the week.
There are another three weeks of auctions meant to be in excess of 1000. Add this to the usual private sales for the week and we should see total sales of around 1400 per week. I would hazard a guess it may end up being closer to 1200 per week. It is definitely a buyers’ market at the moment.
However, good property still sells very well. The auction of a 3 level warehouse apartment located in Ascot Vale and was quoted at $550,000 - $595,000. Warehouse apartments have become hugely popular, and seem to sell well in all types of markets. This property in particular had a great floor plan and had some ‘wow’ factor about it. The auction was opened on a genuine bid of $500,000 and announce on the market at $605,000. There were five bidders in total, which for this market is strong competition. The comparable were showing that the property was worth low $600,000’s, the property sold at $656,000.
I notice the media are still talking about low quotes. One of the reporters even saying “if you want a fair idea of what the house you want to buy at auction is worth, add up to 15% on the advertised price and you might be somewhere near the final result”. That is absolutely ridiculous. You could end up paying 20% more than a property is worth. They still have not got it yet! The media and even government departments like Consumer Affairs still want to have a say in how a property is priced. For some reason they just don’t get it. The vendors’ agent is contractually obligated to assist only the vendor. No legislation will ever stand up to scrutiny that weakens the position of the party who is paying for assistance over the party that is not.
Furthermore the media are not really looking at one of the more important changes to legislation. Section 55 of the Estate Agents Act is being changed. The rules previously required a Real Estate agent, his relatives, or employees, to undergo a full independent assessment by the director of CAV with supporting documentation involving a written valuation by an independent Valuer if they wanted to purchase any piece of real estate their agency’s selling. The process is long winded and penalties for breach are serious.
Now the safeguards that were in place have been hand balled to the vendors solicitor or conveyancer. Most people in this profession would have absolutely no idea of what is a fair price or not. I wonder if these professions even have professional indemnity insurance to appraise the value of a home. It is bizarre that the Minister for Consumer Affairs is more worried about cutting down on paperwork than safeguarding vulnerable consumers.
Next weekend we have the State Election. Whilst the outcome may change a few things, the uncertainty may play heavily on the market. If we have anything close to a hung parliament like our Federal politicians are currently enduring then we are in for some interesting times between now and Christmas.
Article courtesy of JPP Buyers advocates www.jpp.com.au
Monday, November 15, 2010
Most home buyers to pay investor rates of stamp duty this weekend
Thousands of home buyers seeking to purchase one of the 3,020 homes up for auction between now and when the polls close on 27 November will face high stamp duty rates due to bracket creep.
REIV CEO Enzo Raimondo said that at the last election four years ago, a discount for the principal place of residence was introduced; however, it cuts out at $550,000 and has not been adjusted even though property prices have increased significantly.
"Four years ago the median house price was around $400,000, so it made sense to cap the discount; however, the median house price is now $565,000. This significantly reduces the benefit of a policy designed to help average home buyers.
"The failure to increase the discount for a principal place of residence means that someone buying a home worth just over $550,000 is paying an extra $3000 in tax for no sensible reason.
"For example, stamp duty on a home sold for $550,000 today is $24,970, yet if you pay one extra dollar — $550,001 — the stamp duty jumps to $28,070. Why?
"The current stamp duty rates are unfair and need to be reduced.
"The commitment on Thursday to cut stamp duty rates for pensioners shows that with the right policies, the state government can improve housing affordability and that reform is possible.
"John Brumby cut stamp duty four years ago and, given the tax on an average home has increased by 25 per cent in four years, there is no reason why can't do it again and equally no reason why Ted Baillieu can't match him," Mr Raimondo concluded.
Article Courtesy of REIV
Weekly Market Comment
| November 8th Clearance rate plummets to 61%! What will happen to the property market? Simple, it will slow down for the next six weeks then take off again in March next year. Good property is still selling very well at all levels of the market; from the multi-million dollar mark to the excellent investment options that are out there. 45 Dickens Street in Elwood sold under the hammer for $3.335M after 4 separate bidders fought out an epic battle. 800 sqm of land with a beautiful period home. On the other end of the scale, 5/202 Lennox Street Richmond, a delightful 2 bedroom renovated apartment, quoted low at $450k+ (this style of quoting is soon to be outlawed) went on the market at $520k and sold under the hammer for $539k. A very good price for any investor. There are now 4 main factors slowing the market down. All of which are temporary and will probably be low priority factors by February or March next year. Then the market will do what it does every time our economy goes into overdrive. Prices will sky-rocket. We have federal politicians who have no idea how to handle the parliament yet. This year’s election still has no real winners. And this makes the average mom & dad nervous. Wait until we have a bill that Julia Gillard really needs to get passed. If Ms Gillard needs to “buy” the Greens vote, but can’t afford it, then she may have to compromise with the Liberal party instead. That will make for very interesting governance! Secondly, we have a State election here in three weeks, and the commentators are predicting another hung parliament. Won’t that be fun!! As many voters move away from the Labor party, unfortunately some of them vote for the Greens. If the Greens candidate does not get up then the vote goes back to the Labor party through preference distribution!! Thirdly, we have interest rates going up. They have reached 4.75% and this puts them in an “average” category. They are not excessively high nor are they historically low. This is the greatest indicator of where price will go in the short term. As our economy strengthens, the RBA cash rate goes up and house prices increase. Whilst there is always a short term hiccup, overall property prices will rise sharply: probably starting about March next year. Finally, the banks themselves are the fourth factor. When was the last time three out of four banks did not put up their own variable rates in the same week the RBA raised the cash rate? Only CBA have bumped their rate and the press are eating them alive. The indecision of the other “three pillars” will also be weighing heavily on people’s minds. All these factors, except Australia’s growing economy will be sorted out by early next year. There is now a six week window for canny investors to get into the market before the jump in the first half of next year. If you purchase well now, you should have excellent growth throughout 2011. If you are interested in purchasing a property this year please give us a call.
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