Miles Newsletter

AUTUMN 2016

PROPERTY MARKET UPDATE

High clearance rates in Banyule

L to R: Keith Oldmeadow, Paul Evans, Brad Pearce, Damien Carter and Stewart Oldmeadow.

If recent results and statistics are anything to go by, 2016 is shaping up to be a solid period for Melbourne’s property market. Interest rates have been left on hold again after the RBA’s March meeting and auction clearance rates across the city are consistent at a healthy 74%.

Melbourne’s biggest auction weekend so far this year (19-20 March) saw 1,667 auctions held with a record 1,004 sold under the hammer. When homes sold before and after auction are included, 1,230 homes were sold over that weekend – the highest number of homes sold on any weekend on record.

The Miles Real Estate team has also been busy. Our own auction clearance rate reached 91% in February and demand for all property types remains strong heading into the second quarter. The greatest demand lies with low maintenance townhouses suitable for couples and empty nesters. Many homes are attracting multiple buyers.

34 Meyrick Crescent in Viewbank recently attracted 100 buyers throughout the sales campaign with six bidders all determined to buy the property on auction day. Eventually the four-bedroom family home sold for a pleasing $912,000.

In other recent real estate news, the debate over negative gearing has come to the forefront of politics. Opposition leader Bill Shorten has indicated that if his party wins the federal election later this year, they will make some changes to property tax laws. From July 2017 Labor will limit access to negative gearing tax deductions to purchases of newly constructed properties and increase capital gains tax liability on assets acquired after that date. At this stage the announcement has had little effect on investor interest.

If you are thinking of buying a property or selling your current home or investment we invite you to contact one of our offices to discuss your plans. Ivanhoe – (03) 9497 3222 or Rosanna – (03) 9459 5666.

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PROPERTY MANAGEMENT

COMMERCIAL PROPERTY

Tenants favouring newer or renovated rentals

Lower yields no obstacle to strong commercial sales The Commercial market has experienced a very solid start to the calendar year, with investors prepared to accept historically low yields when comparing to alternative forms of investment.

A retail premises in Burgundy Street, Heidelberg recently sold on a yield of 3.5%, reflecting a sale price of $1,350,000.00, with six parties competing for the centrally located site.

Over the first quarter of 2016 the residential market experienced a large influx of new rental properties.

This created an over supply of units and apartments throughout the City of Banyule.

While demand for houses remains strong and supply is limited, the newer apartments have had an impact on owners with older properties without all the “mod cons” of today.

Miles Real Estate has listed and already leased a large number of apartments in complexes we have successfully marketed.

These include: • • • • •

5 Units in Grandview Gve Rosanna 16 Apartments in Rosanna Rd Heidelberg 7 Apartments in Darebin St Heidelberg 7 Apartments in Marshall St Ivanhoe 12 Apartments in Waterdale Rd Ivanhoe

Melbourne vacancy rates for the first quarter sat at around 3.1% whilst Miles Real Estate has maintained our vacancy rate to an average of 2.5% for the first quarter of 2016.

An industrial site with two street frontages has sold in Heidelberg West for $950,000.00. The property at 59 Korong Road enjoys an income of $61,000, on a new four year lease, indicating a solid yield of 6.4%.

Miles Real Estate has recently sold 9-13 Flintoff Street, Greensborough on behalf of Banyule Council for in excess of $6,500,000. The site of 2,450 sqm has been purchased by Primary Health Care who will utilise the site for medical services including day surgery, IVF and other allied health services.

The leasing enquiry has been steadily increasing since the start of the year, and stronger than experienced since mid 2011.

Several transactions of note include a modern showroom/warehouse at 637 Waterdale Road, Heidelberg West which has been leased to Michelin Tyres for five years at $54,000 pa ($135/sqm).

Meanwhile a warehouse of 525 sqm in Fink Street, Preston has achieved $48,000 pa ($90/sqm).

Strong enquiry for newer properties has seen properties continuously turning over but has also made existing owners aware that the majority of tenants currently in the market are looking for quality properties.

Those landlords not ready to improve or update their investments to be faced with a longer vacancy period.

Your property manager will be fully aware of what the market is seeking, so it is recommended to seek their advice on what may need doing to maximise the return on your investment.

9-13 Flintoff Street, Greensborough

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INVESTORS

LIFESTYLE

Top tips to reduce the risk of vacancy on your rental property

Miles team gets Arty Farty!

The aim of every landlord is to have their investment property let 100 per cent of the time. Any vacant time costs money – each week equates to approximately 2 percent of yearly rental income – and the longer it is vacant, the more lost income is at stake. Whether your property is tenanted, coming onto the market or currently vacant, here are a few key tips to reduce the risk of vacancy: Setting the right rent Your property manager will be able to provide you with a current market valuation. They will take into consideration supply and demand equations, as well as the individual attributes of your property. Trying to add on an extra $10 a week when the market is relatively even, will not do you any favours. It’s a simple equation. If your property attracts $350 a week and is untenanted for three weeks because the pricing is too high, you’ve already wiped out the potential annual gain of the rental increase!

Presentation First impressions count for a lot in the property market – rental or otherwise. A simple investment of a few hundred dollars to freshen up with a coat of paint or replace tired window fittings will pay dividends when it comes to attracting tenants. Other bigger ticket improvements that matter to tenants are modern kitchen appliances, a renovated bathroom and heating and cooling.

Tenant selection Using the services of a professional property management team can take the stress out of the tenant selection process. As the landlord, you will always have the final sign off, but property management teams undertake a strict selection process. All professional property management fees are tax deductible.

Prompt Maintenance

On a glorious sunny Sunday in late March, the Miles Real Estate team joined in the fun at the City of Banyule’s Arty Farty Festival. The community turned out in force at Sills Bend on the Yarra River, Heidelberg to enjoy a day of colourful entertainment and activities.

As part of our commitment to supporting our local community, we were proud to sponsor the Lego City tent, helping children design and build their own Lego creations.

The focus of the day was firmly on the kids with activities including a giant slide, a display of crazy bikes and an acorn tree house. A colourful grand parade kicked of the days’ events with the theme “Dreams of the Future”. Children let their imaginations run wild, dressed up in costumes that reflected what they thought the future might look like!

“Miles Real Estate has been a part of this local community for decades and we always look forward to rolling up our sleeves and supporting those who support us,” said Director Damien Carter. “It was a privilege to take part in such a well attended event in such a special setting.”

If your property is already tenanted and everyone’s happy, you want to keep it that way! Maintenance problems may not be at the heart of most break ups between tenant and property, but they can push a wavering tenant back into the market place. Prompt maintenance is a simple way to develop tenant loyalty and therefore reduce the risk of your property sitting vacant. Discuss the maintenance process with your property manager, emphasising that you would like to be across all issues as they arise and expect prompt attention when anything goes wrong.

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$1,596 per m

Greensborough

LD LD

34 Kenilworth Parade SOLD $1,615,000 Land 604m2

COMMERCIAL

142 Burgundy Street SOLD $1,350,000

Fairfield $2,371 per m2

79 The Eyrie SOLD $1,995,000 Land 820 m2

Ivanhoe $2,674 per m2

175 Cape Street SOLD $1,351,000 Land 837m2

COMMERCIAL

Heidelberg

ROSANNA 118 Lower Plenty Road 9459 5666

Ivanhoe

SO

SO LD $2,310 per m2

SO LD

SO LD 9-13 Flintoff Street SOLD Confidential Land 2450m2

Thornbury

13 Waterdale Road SOLD Confidential Land 604m2

Eaglemont $2,433 per m2

SO LD

SO 5 Hall Street SOLD $1,366,000 Land 576m2

COMMERCIAL

$2,161 per m

2

59 Korong Road SOLD $950,000 Land 1350m2

Heidelberg $1,614 per m2

COMMERCIAL

ED

$2,088 per m2

16 Shakespeare Grove Heidelberg Heights SOLD Confidential Land 560m2

195 Raleigh Street SOLD $1,481,000 Land 641m2

Ivanhoe East

LE AS

Heidelberg

Ivanhoe

SO LD

44 Buckingham Drive SOLD $1,420,000 Land 680m2

84 Ivanhoe Parade SOLD $1,355,000 Land 627m2

SO $2,064 per m2

24 Keam Street SOLD Confidential Land 1149m2

SO

LD Ivanhoe

LD

12 Kenilworth Parade SOLD Confidential Land 604m2

SO LD

SO

Viewbank

SO LD

40 Casey Crescent SOLD $1,034,000 Land 501m2

Heidelberg

LD

$2,451 per m

2

135 Hawdon Street SOLD Confidential Land 980m2

SO

LD

2

LD

Ivanhoe East

SO

SO

Ivanhoe

LD

35 Melcombe Road SOLD $1,353,000 Land 552m2

SO

1 McCubbin Street SOLD $2,400,000 Land 1504m2

SO

SO

72 McArthur Road Ivanhoe East SOLD $1,412,500 2 Land 697m $2,027

LD

SO

LD

LD

LD

Recent Sales Results

Heidelberg West

637 Waterdale Road Heidelberg West LEASED

IVANHOE 143 Upper Heidelberg Road 9497 3222