PROPERTY NEWS FROM

BUYERS ADVOCATE

Welcome to Buyer’s Advocate monthly
Newsletter for August 2011

 
Welcome to August.  Let’s talk about the news and questions driving the residential property market and our observations of buyers and sellers behaviour in the current and changing climate. What a dynamic time to stand back and assess!  So before the winter blows it’s final cold breath, let’s talk property and look to the warm breeze blowing into the Melbourne spring market.

Please click on any of the following articles you would like to read, or simply scroll down the email to read all.

Our view on the ground  
Buyer’s Advocate in the News  
Suburb profile of the month – Yarraville 
Recent purchases
Tip of the month

You are always welcome to call or visit us at our Hawthorn office to talk with our advocates about all your residential property related questions and goals. Make an appointment to meet us for a free hour of personal and tailored property advice.

OUR VIEW ON THE GROUND

Is now the time to buy?

We are being asked by many people at the moment if now is the right time to buy. There is so much media out there talking down the prospects of the property market, generally.  This is causing a lot of buyers to sit on the fence, thinking they can buy better tomorrow.

There is talk about falling auction clearance rates, which direction interest rates are heading in, record supply levels, low level of buyer demand and a spluttering economy. Let’s look at the facts of each of these.

It is true that clearance rates have fallen, however it depends what suburb you are looking at. Many of the suburbs within the 15 km radius of the city have experienced very good clearance rates for the first 6 months of the year. For example Windsor at 80%, Abbotsford 80%, Fitzroy North 78%, Hawthorn 75%, Clifton Hill 75%, Richmond 75%, to name a few. So it is important to consider the sub markets are where the demand exists today and how this is likely to impact on prices tomorrow.

The direction of interest rates is currently debatable. The inflationary pressures are weighing heavily on the likelihood of an interest rate rise. However the global uncertainty and the lack of strength in our retail and building approval sector is signalling a rate cut. A rise will put pressure on the property market while a cut could stimulate it. Given the events over the last week the likelihood is a cut in interest rates. What lies ahead is anyone’s guess!

The record supply levels relate to a stock hangover as properties are taking longer to sell. This captures all properties throughout Melbourne, however there is a lot of stock on the market but very little quality stock. We pursue good property for our client’s interest so we can say demand is high for good property.

The low level of buyer demand is interesting as we have been noticing a greater number of people at open for inspections and very good crowds at auctions, though quite often no bidding. This reflects the uncertainty of buyers.  The reverse of this uncertainty is also to be seen at some auctions where 5-6 bidders compete aggressively for a property, much to the surprise of our clients. This is more an indicator that the market is stabilising, where there is good demand for high quality property and less for poor quality.

Then there is the economy. No doubt that a number of businesses are struggling, particularly retailers. However the unemployment rate is still low and we are seeing a lot more upward wage pressures which will improve discretionary spending.
There is also the migration element which is still high and these people need homes to live in.

So in summary no one has a crystal ball. The only advice we would give is that anytime is a good time to buy property - if you buy in the right location for a good price. Sitting back and waiting for the herd could mean you get trampled on or pressured to pay a big price just to get into the market.

Luckily with property there is often an inverse relationship with the strength of the property sale market and rental market. That is, as less people buy property they rent, pushing up the rental yield. As a long term investor this allows you to ride our any bumps along the way.

Right now there are some good buying opportunities and this market would be classified more as buyers than a seller’s market. So if you are considering buying a property, get good advice and you will do well!

Free Consultation
Call Buyers Advocate or visit www.buyersadvocate.com.au to book a free consultation with one of our advocates

THE BUYERS ADVOCATE TEAM

BUYER'S ADVOCATE IN THE NEWS

Herald Sun Newspaper 3 July 2011
Experts offer the inside information on “The wise buys”

Once again John Dagge, Property Editor of the Herald Sun approached us for our professional view of the residential market and specifically where to buy a good investment with $350,000 in “a softening market” and why?

We favoured Malvern for this purchase.  Here is what we had to say:

The property One bedroom apartment in a boutique block with off-street parking and a central bathroom.

Why will it perform? At this price you want to be in a blue chip suburb within a 15km radius of the CBD and close to shops, amenities and transport. Look for a block of less than 12 and preferably of solid brick construction. Ideally the apartment should have 50sqm of space. These properties are likely to outperform as the inner city continues to have the highest buying demand from first home buyers and investors. This will only increase when first home buyers re-enter the market to take advantage of stamp duty relief.

An example of this property purchase is a one bedroom unit with a car park that sold in July for $332,250.00. This unit is walking distance to the train station and Glenferrie Rd shops and cafes. It is a good floor plan and the rental will be around $300.00 per week giving a return of around 4.7 per cent.

This small pretty suburb lies six kilometres to the west of the Melbourne CBD in the City of Maribyrnong.  Formerly a working class suburb Yarraville has seen some amazing changes over the past ten years to become a highly sort after suburb for young couples and families.

From Yarraville, a 12 minute train trip, or a 15 minute drive over the Westgate Bridge, gets you to the heart of Melbourne.  Heading in the other direction to the beautiful suburb and port of Williamstown is only 5 minutes travel by car.

Yarraville is best known for its quaint architecture with rows of single fronted terraces and the variety of a village lifestyle.  More than 80% of properties in Yarraville are houses with only 10% of homes being units/apartments.  The medium house price is currently $730,000 and has experienced steady growth over the past five years.

Shopping offers an eclectic experience from antiques through to kitsch and funky clothing to overseas designer wear.  There is a broad range of notable eateries ranging from café lounges dining rooms, pizzas and pasta restaurants through to more formal fine dining restaurants.

A major attraction of Yarraville is the refurbished 1938 Art Deco Sun Theatre in Ballarat Street, in the heart of the village.  An alternative to the big multiplex cinemas and carparks, this grand old theatre screens contemporary new box office films.  For a grownup thirst The Blarney Stone Irish Pub provides beer on tap and quality pub meals.  Or for a true Yarraville treat the Hausfrau Bakery serves very good coffee and a range of homemade cakes.

Yarraville – more like a country town than an inner suburb of Melbourne.

RECENT PURCHASES

28/78 Queens Road Melbourne

In a prestigious position opposite Albert Park lake, bought as a home, this is the perfect lifestyle property. Set well back from the road and solid brick construction ensures there is very little traffic noise from Queens Road.

Although this property is part of a larger block it has great capital growth potential. As only one of eight that overlook the lake and north facing living area, this provides excellent accommodation. It has two large bedrooms and an open plan. It also contains an extra large garage, approximately 7 metres long, providing additional storage options. The garage could be accessed via a back street.

Purchased for $440,250 prior to auction this was a great buy. For the same price as a property that sold one month earlier, located in the middle of the block, with no views toward the lake!

36 Mitchell Street Brunswick

On an impressively deep block, this large family home offers unique and exciting opportunities to further improve, or potentially develop (STCA).
 
Purchased for its development potential, with dual street frontage providing the perfect opportunity to subdivide and build a townhouse out the back. The house at the front is well-maintained and immediately rentable. The generous floorplan has the potential to convert into a 5 bedroom house, plus a self-contained bungalow.

With land of 491sqm and only a short stroll to Sydney Road shops and restaurants, local schools, trams and trains, this is sure to provide a great return.

Purchased for $980,000 with a potential rental of $1,000 per week while you wait until the plans and permits are approved for the construction of a townhouse, this is a perfect development opportunity

TIP OF THE MONTH 

With the looming spring market and low stock levels of property on the market, competition for properties might be stronger than you think, particularly for first home buyers. Don’t let stamp duty savings determine how much you will bid on a property. Assess the value: quality property will pay you back when you sell!