What’s in store for 2021?
To many people’s surprise, the Australian economy has shown itself to be extremely resilient. While some sectors of the economy continue to struggle, many others have boomed. This is reflected in the job’s growth with the number of job vacancies in Australia surging to 254,000 in the November quarter, in the latest sign that Australia’s economy is recovering quickly from COVID-19. It was a big jump (+23.4pc) since the last quarter (August), according to new data released by the Bureau of Statistics (ABS). The surge offers hope that the job market can continue its surprisingly quick recovery, which saw the unemployment rate drop to 6.8 per cent in November (from a July peak of 7.5 per cent).
The conditions for property are very positive with low interest rates and an appetite that has built up after 12 months of low activity. Leading up to 2021 the median house price in Victoria recorded its largest increase since 2000, according to data from Real Estate Institute of Victoria’s quarterly December report. For the first time, Metropolitan houses in Melbourne surpassed a median value of $900,000, jumping by 9.5 per cent from the September quarter to land at $941,000.
Leading up to 2021 the median house price in Victoria recorded its largest increase since 2000
If January is anything to go by, the momentum will ensure that 2021 will be a very strong year! Buyers are out in force and are snapping up the low levels of stock that are available. Even when stock levels increase in the coming months, it is unlikely to meet the demand which will continue to place upward pressure on prices.
If you are in the market right now, whether it is for a home or an investment property, you really need to make sure that you’re able to access all the available options that meet your criteria. This includes what is on the market, upcoming listings and off market listings (which is a focus for our tip of the month). It is also important that you are looking at the right properties. Too many people look at properties beyond their price point in the hope that they will snap up a bargain. This is simply unlikely to happen in a rising market and you will quickly be priced out of opportunities you could have bought earlier in the year if you are still in the market at the end of the year. So work through your needs, what compromises you are willing to make and only look at properties that are likely to be within your budget. The only way you will be able to do this is to do your own research and get a good feel for the market. Do not rely on agent price quotes as these may not be an accurate reflection of market value.
This month we look at the upsizing trend as a result of COVID, let you know what a true off market is and a couple of great buys from December.
We wish everyone success for the year ahead!
The year of the upsizer!
There has been a lot of talk of downsizing over the years but 2021 may actually be the year of upsizing due to Covid 19. During the pandemic there was a new appreciation of having everything at your disposal at home. As a result there are many people that are now looking for more space, particularly providing the flexibility to work from home and providing leisure activities such as pools, gyms, basketball and tennis courts.
There is also a large number of expatriates that are looking to return from overseas that is also driving this market.
If you are considering upsizing this year, carefully consider your needs and the type of property and areas that best suit those needs. Mid-February to end of March may provide a small buying window with a larger number of properties expected to hit the market.
Property Management Update
Happy New Year! Our Property Management team are off to a busier than normal start to the year.
Open homes are back up and running and though we are seeing what we would consider to be less numbers coming through our properties, there are still plenty of people out there looking for their new home. The rental market in Melbourne has seen one of the largest falls down (along with Sydney) over the past year, with inner city units falling -7.6%. It is expected that this market will rise again once international travel returns. Our team are focusing on leasing our available properties to the right tenant at the right price as quickly as possible – we are monitoring the market and ensuring our landlords are provided with honest advice so we can focus on minimising vacancy in between tenancies.
The rental market in Melbourne has seen one of the largest falls with inner city units falling -7.6%
Preparation is in place for training on the upcoming changes to the Residential Tenancies Act which are due to take place at the end of March 2021. We will be ensuring all of our landlords are across these changes and their properties are up to the new compliance standards.
We pride ourselves on creating an unsurpassed Property Management experience for all clients. If Covid-19 has left you questioning what it is that your Property Manager does, please feel free to contact Lily on 0437 232 529 for a confidential chat. We welcome your enquiry.
Did you know?
Residential Tenancies Act changes
As part of the new tenancy laws, landlords are now referred to as ‘rental providers’ and tenants as ‘renters’. Tenancy agreements are also now referred to as rental agreements. You may note these updated terms being used throughout documentation moving forward.
We had a great finish to 2020 and have started well in 2021. While buying has been challenging with limited stock we have been able to secure some great deals for our clients. We have listed a couple below.
Investor in Surrey Hills (Off Market)
We secured this fantastic off market property for a client on Christmas day. We dealt directly with the vendor and there was no agent involved. They had a need for the money and with a tenant in place it suited them to sell in this manner without the normal marketing campaign and agency selling expenses.
While our office was closed, we once again proved that nothing is too much trouble and all steps will be taken to deliver a great result.
Needless to say, this was an added Xmas bonus for our very happy purchaser and vendor!
Dual Occupancy Site in Oakleigh
Large land holding of 762 sqm with an original 3 bedroom house at the front and a 3 bedroom villa at the back (yet to be subdivided). On a month to month rental of $1,564 per month for unit 1 and $1,729 for unit 2. In total this provides a rental income of $39,516 per annum. There is potential to increase the rent as the front one in particular is well below market. Based on a price of $1.2M this provides a gross rental return of 3.3%.
A recent land sale in the street which has subsequently been developed sold for $1,677 a sqm which places this properties land value at $1.28M (762 sqm) without considering the two rental properties. We also estimate if you subdivided the property you could sell the two separately for $750k for the front one and $650k for the back one, giving a total of $1.4M.
Our Vendor Advocacy Services
Did you know we offer Vendor Advocacy?
A service within our broad range of offerings is Vendor Advocacy. We can assist clients in taking the time, stress and pressure out of selling a home or investment property, delivering focused experience and expertise in all aspects of a property sales transaction.
We are able to provide an independent valuation of your property. Our Advocates are experienced advisers who will guide you objectively through the sales process.
Our role as a Vendor Advocate is to act for the seller, to appoint a suitably qualified real estate agent. This ensures at all times that selling agents do what they say they will do, charge a fair and reasonable fee for their services, act impartially when introducing buyers and market and promote your property professionally and effectively.
Our fee is deducted from the sales commission, so it won’t cost you anymore to engage our service to assist you to sell your property.
Let us help you sell your property. Contact one of our experienced Buyer’s Advocates on (03) 9818 4499, for an obligation free discussion.
Tip of the month: What is a true Off Market property?
Chances are if you are in the market to buy property and you have handed over your details to an agent at an open for inspection, you would have received an email or a text saying “off market opportunity”.
Agents have taken great liberty at what is truly an off market. To us it is often a ploy to generate interest early in the campaign to see if someone will “pay over the odds” on the basis that it is not on the internet. The intent is to list the property and this merely becomes part of the campaign. Even worse it has become a tactic of some agents to obtain the listing by showing people through to give the impression they have buyers.
We are also starting to see companies that are advertising a database of off market properties, which you can only access when you provide your details. These are often Buyers Agents that are attracting your business on the basis of the “off markets”. However, most off markets are upcoming listings and while the agent may sell prior to a campaign it is generally only to someone who is prepared to pay an “above market” price.
So what is an off market?
A true off market has only been mentioned to a few qualified buyers and Buyer’s Advocates. Generally the contracts are ready and the vendor is prepared to sell. There is a price given that the vendor is prepared to sell at and when you arrive to inspect you are not joined by a whole group of people, or even worse there is an open for inspection sign out the front of the property.
A true off market, would also be one whereby the client has come direct to a company such as ours whereby there is no agent involved. We also have a direct approach service to uncover some of these opportunities.
When you know it is not?
If you have received an SMS or email and it is not personalised then the chances are it has been sent to their database which could include hundreds of people.
So don’t be fooled by marketing tactics. At the end of the day you still need to do your research on the appropriate values of a property and know when an agent is looking after you or just using you to push the price up.