Vendors win from property shortage A critical shortage of properties for sale is boosting sales prices in Melbourne. Latest figures from property research company RP Data show that vendors are earning tens of thousands of dollars more than they expect from sales because buyers are being forced to compete for a limited supply of properties for sale.
The number of properties for sale in Victoria has at times been down about 10 per cent this year compared with last year, according to RP Data’s senior research analyst Cameron Kusher. “There is less supply of properties for sale in the market and this definitely increases prices,” Mr Kusher said.
“There are strong (auction) clearance rates and also demand from buyers spurred on by low interest rates and there is improving consumer sentiment, which is positive for vendors.”
The competition among buyers is resulting in Melbourne properties selling for an average of 11 per cent more than their advertised auction prices, according to online property industry news source, Property Observer.
In September last year, properties were selling for 6.5 per cent more than their advertised prices, Property Observer said.
RP Data’s Mr Kusher said Melbourne’s median home value was 6.6 per cent below the peak price in October 2010, but the way the market was travelling, that record price could be broken later this year. “There is momentum in the market.
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Values are up and sales are up. Values could peak again in mid-2014 or even sooner if this is a bumper spring,” Mr Kusher said.
He said selling conditions were now stronger than they had been for a couple of years, giving power to vendors in negotiations. “Vendors are often getting more than one offer at the moment,” he said.
PhilipWebb General Manager of Sales Anthony Webb said the shortage of stock for sale had a direct result on sales prices by increasing urgency among buyers. “We’re getting more and more competition at auctions and multiple offers for properties being sold through private sale – and this is pushing prices to exceed our vendors’ expectations by a significant amount,” Mr Webb said. Recent sales include a four-bedroom house at 3 Yarmouth St, Ringwood, which sold for $210,000 above its reserve price for $810,000 and a threebedroom house at 15 Massey St, Box Hill South, that sold for $740,000, which was $110,000 above its reserve price of $630,000. A property at 9 Highfield Rd, Doncaster East sold for $1.41 million – $410,000 above its reserve – after developers competed for the site suited to four townhouses.
Mr Webb said he had sold his own home in September, partly because of the shortage of similar properties for sale. “There was only 27 houses on the
Boom sales: Properties throughout the Manningham, Maroondah and Whitehorse council areas, such as 3 Yarmouth St, Ringwood (top), 9 Highfield Rd, Doncaster East (middle) and 15 Massey St, Box Hill South (bottom), are smashing their reserve prices.
market in the suburb when we listed ours for sale and some of them were on half blocks, so there was really only about 20 other houses on traditionalsized blocks for sale in the suburb,” Mr Webb said. PhilipWebb’s auction clearance rate was 91 per cent in the 2012-13 financial year, way ahead of the industry average, he said.
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Nervous wait for big sale
Property races for a winner The footy finals are over – and the property market is off and racing.
As Melbourne prepares for the race that stops a nation, property vendors also set their sights on winning at auctions and private sales. Our sales agents have been run off their feet, but that’s a good thing because it means there is activity in the market and competition among buyers to secure their dream home or investment property. The warm spring weather brings out buyers and helps properties to look their best with flowers in bloom and gardens full of colour. Undoubtedly, now is a great time to sell before the Christmas holidays because many families want to buy so they can be settled in their new home before the start of school next year. It is also a very active period for buyers, but the flurry of activity around many properties means buyers have to act swiftly if they want to secure their No.1 choice. Our doors are always open for business, but also to help anyone who wants an obligation-free assessment of their property, even if you are not thinking of selling or buying at the moment. Best regards,
Vendor Loraine Lednar was extremely nervous when she offered her Doncaster investment townhouse for sale. She was unsure about the auction process and timidly approached the big day – but was delighted with the outcome. Her three-bedroom property sold for $80,000 above the reserve price under competition from six bidders, in a result that she could only dream about when she offered the property for sale. “I was terrified in the beginning,” Mrs Lednar admitted. “I had bought the property with my husband, but he had passed away and I was scared about selling it. It is a daunting experience.” Mrs Lednar entrusted PhilipWebb estate agent Peter Sahinidis with the sale, accepting his advice to put it to auction because it was close to Shoppingtown and in appealing condition. “I wasn’t sure about it, but I trusted Peter and it turned out to be fantastic. He was just as excited as I was,” she said. Mr Sahinidis said the property at 3/7 Firth St, Doncaster was advertised at $550,000-plus, had a reserve price of
Winner: The townhouse at 3/7 Firth St, Doncaster, sold for $80,000 above reserve after six bidders competed to buy it.
$590,000 and sold under the hammer for $670,000. The property’s location and features, accurate pricing and tight management of prospective buyers produced the strong result, Mr Sahinidis said. He had previously sold another property for Mrs Lednar within two weeks after another agent had failed to sell it. It was on the strength of that result that Mrs Lednar was keen to use Mr Sahinidis again.
REIV names PhilipWebb as triple finalist PhilipWebb is thrilled to announce they have been named as Finalists at the upcoming REIV Awards for Excellence. Nominating in three categories; Property Manager of the Year (Sali Young); Website of the Year; and Large Residential Agency of the Year; a 70 strong PhilipWebb contingent will attend the gala event this month at the Crown Palladium, where they will eagerly await the announcement of the winners.
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Rental properties worth their rate in gold The strong value of rental properties as a solid long-term investment has been underlined in a report by property research company RP Data.
Latest figures show that over the past 18 years, rental rates across Australia have never fallen on an annual basis. RP Data senior research analyst Cameron Kusher said that even the Global Financial Crisis contributed to driving up rent prices. Property investors in Australian capital cities over the past six years have enjoyed rental gains averaging more than 32 per cent, Mr Kusher said. The report reinforces the concept that the property market moves in cycles and that different sectors of the market accelerate at different times due to separate factors. Between April 1997 and the same month this year, rents across the nation’s capital cities have jumped by 82.3 per cent, Mr Kusher said. “Recent housing finance data from the Australian Bureau of Statistics suggests that investors have been flocking back into the housing market,” Mr Kusher said.
“It appears that investors have been chasing yield and are positioning for long-term capital growth, rather than keeping their money in the bank earning very little interest. “Clearly, at the moment, investing in housing is one way to secure a superior return.”
Investors have been chasing “ yield and are positioning for long-term capital growth, rather than keeping their money in the bank earning very little interest.
PhilipWebb’s general manager of property management Sophie Lyon said the returns to investors had been improving recently on the back of successive interest rate cuts. “As interest rates go down, the debt costs are less for landlords and this eases pressure on our clients,” Ms Lyon said. “Some can get in front with their mortgage if they keep the payments the same as the interest goes down.”
Big block draws a crowd A total of 118 potential buyers have flooded through a Heathmont house on a large block – resulting in the property selling within a week for $70,000 beyond the vendors’ expectations. PhilipWebb sales agents were run off their feet when 61 buyer groups crowded into the first 30-minute open for inspection at 10 Beverley Court, Heathmont. Four buyers made formal written offers to buy the two-bedroom, double-storey house on a 934sqm block in the bowl of the court, and it sold for $561,500 within seven days of hitting the market. Senior sales consultant Travis Milton, who sold the property with sales consultant Ruby Watson said there were up to 100 people inspecting the property at once. “It’s the most people I’ve ever seen at an open for inspection. It was just crazy,” Ms Watson said.
The improving conditions for investors meant more landlords were looking to expand their property portfolios or restructure their loans to give them equity to fund their next purchase, Ms Lyon said.
Crowd pleaser: 10 Beverley Court, Heathmont, attracted 61 buyer groups to the first open for inspection
“But we took everyone’s name and number, handled their inquiries and got back to them all which contributed to the great price.” Mr Milton said PhilipWebb’s referral system meant that several buyers who had previously showed interest in other similar properties were introduced to the Beverley Court property. Similarly, potential buyers who missed out on Beverley Court were referred to other properties for sale throughout PhilipWebb’s three-office network.
Super Idea : Clients learn the ins and outs of SMFS’s at PhilipWebb’s Investor Club Education Event
Investor Club hits target
Have you ever marvelled at stories in the investment magazines about investors who build big property portfolios in quick time and wondered how they do it? The PhilipWebb Investors Club will get an insight into this and many other issues at the next Education Event where bestselling author and property investor Helen CollierKogtevs will talk about how she built a portfolio of 10 properties in 10 years and retire for life. Ms Collier-Kogtevs will also address how to get almost unlimited finance from banks and how to invest with much less money than you thought you needed. Investor Carlo Sabidussi, 57, of Templestowe, said he looked forward to the event and would invite his 23-year-old twin daughters to attend. “We’re interested in learning how to build wealth through property, unlocking equity and how to deal with our tax,” said Mr Sabidussi. “We want our hard-earned dollars to be working for us.” Mr Sabidussi also attended the Investor Club’s first event about investing through a self-managed superannuation fund. To join the PhilipWebb Investors Club call 9955 2615.
PhilipWebb: A trusted name in real estate for 41 years.
Auctions spring into action By Anthony Webb, Partner AND General Manager of Sales
Spring is in the air – and auctions are running hot.
The weeks between September and mid-December are among the busiest for selling properties in Melbourne and the PhilipWebb team is expecting to maintain or improve on our 2012-13 auction clearance rate of 91 per cent. Now that the footy finals are over, the property selling season is expected to step up a notch. We have certainly noticed an increase in activity since the weather started getting warmer. Auctions become a favoured method of
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selling during spring because the year’s peak selling period generates strong competition among buyers. Auctions also appeal to vendors because they produce unconditional sales in a transparent forum that encourages
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buyers to take action. Vendors will have gained confidence from many of the strong auction results we have achieved in the past few months and we look forward to building on these results for the rest of the year.
Interest rates joy for landlords
By Sophie Lyon, Partner AND General Manager Property Management
Interest rate reductions in recent months have been a gift for property investors.
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ownership. Either way, the interest rate reductions have given investors options for how they want to plan for their longterm financial future. Some clients are exploring using a self-managed superannuation fund
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Some property owners are maintaining loan repayments at previous levels and knocking chunks off their mortgage. Others are using the extra cash in their accounts to plan for their next investment while they retain the maximum tax benefits of property
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The cost of owning an investment property has been scaled back with each interest rate cut and many of our landlords are enjoying the flexibility that has given them.