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Directors Comments
Buyers should exploit the best buying conditions since late 2008. Auction clearance rates dropped from 68% to around 60% in recent weeks. We analyse selling results for our key target suburbs and for example, of the 7 properties offered for auction in St Kilda 1 sold, 3 sold before, showing lack of faith in selling at auction, and 3 passed in. Analyses of 12 of our target investment suburbs on these days showed similar results. We work across multiple suburbs and the market is patchy at the moment, so we caution buyers to do thorough research prior to buying. My advice to buyers is to forget interest rates and get active
. The next few weeks running up to the end for 2010 will see over 3,000 properties offered for auction. We will keep our clients informed of the results.
Securing quality assets, according to our strict investment criteria in the currently weakened market conditions is an opportunity not to be wasted. Whilst other buyers are snoozing, Buyer Solutions is achieving great success for our clients right now. We negotiate hard and our clients benefit.
We have a new Coalition government in Victoria with Mr Baillieu recently appointed as Premier. Things will change for the property sector and he has already indicated he will reverse planning permission for high rise adjacent train lines. It will be interesting to watch the affect of planning policy changes going forward into 2011 and beyond. Less dwellings, means higher prices as supply tightens and fails to address the under supply in Melbourne. Stamp Duty promises will be interesting. From 1/7/2011 First Home Buyers will pay 20% less and this is a great bonus for them. Also, concessions for stamp duty for the elderly will be extended from Pensioners to self funded retirees.
Many investors are buying property within their Self managed super funds (SMSF). This increasingly strong trend is supported by better loan products on offer from Banks and other institutions, clearer guide lines and structures. Shares continue to fluctuate and direct property investing is increasingly attractive to investors wishing to diversify their superannuation investments or have more control in assets they understand and trust.
Victoria. How are we Performing?
New figures released by the Australian Bureau of Statistics today reveal that Victoria remains Australia's busiest state for residential construction. According to the ABS, Victoria saw $3.2 billion of private sector residential building activity in the September quarter.
In terms of total private sector building activity (including commercial and retail developments), Victoria also led the nation with $5.2 billion of activity. "Victoria remains Australia's number one state for residential construction," Urban Taskforce chief executive officer Aaron Gadiel said. "Until 2007, New South Wales was the nation's number one state for building activity - this shouldn't have been surprising given that it's Australia's largest state," he said.
"However, in 2007, Victoria stole New South Wale's title. "Victoria has never looked back - in the last financial year, for every dollar spent by builders in New South Wales, $1.20 was spent in Victoria," he said. "It's time the major political parties started articulating coherent plans to get residential construction going again in New South Wales. New South Wales achieved $1.95 billion of residential private construction activity in the September quarter, according to the ABS.
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The Importance of High Quality Property Management – Janet Spencer
- No routine inspections
- Unreported maintenance
- Loss of rental.because rents not indexed over time
- Leases not renewed
- Arrears
- Untidy and unkempt gardens and grounds
- No Landlord Insurance…
The list goes on and on. Over the course of 2010, we have been contacted by many of our clients with investment properties who are unhappy with their current managing agents.
You expect your Managing Agent, being paid at commercial rates for their services, are doing their job. This is not always the case. We advise our customers to book a personal viewing of their investment properties in 2011 and if things are not adequate, we will be more thank happy to assist by taking over management and leasing for you. If you are based overseas, please contact our offices as we may be able to inspect for you.
As investors, you need to be pro-active to ensure you are getting what you are paying for. If you have any concerns about the management and leasing of your assets, please call Janet on 9816 8555 or email jspencer@buyersolutions.com.au for some independent advice or to move your management with our assistance.
Feature Story: Housing Bubble Or?
The AMP's chief economist, Dr Shane Oliver says Australian housing is not in a bubble but it is very overvalued, and combined with high debt levels leaves Australian households vulnerable should anything significantly threaten house prices.
It is a reason for the RBA to tread carefully in raising interest rates as poor and worsening affordability will likely lead to soft house prices over the next year or so.
Australia has come through the global financial crisis in good shape. However, there is one nagging concern – what I have long called Australia’s Achilles heel – and that is the excessive level of house prices and associated household debt.
Click here to read the entire article
REIV September quarter median prices
Metropolitan Melbourne Median Prices
| |
Jun Qtr 2010 |
% chg Mar-10 to Jun-10 |
Mar Qtr 2010 |
% chg Jun-09 to Jun-10 |
Jun Qtr 2009 |
% chg Jun-05 to Jun-10 |
Jun Qtr 2005 |
| Houses |
$565,000 |
0.9% |
$560,000 |
20.5% |
$468,000 |
59.3% |
$354,000 |
| Units & Apartments |
$470,000 |
0.3% |
$468,500 |
15.5% |
$407,000 |
56.7% |
$300,000 |
Source: RIEV
Three months of little change for renters
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.
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Xmas Recipe – Our suggestions at the end of the Year
1. Buy and chill Champagne
2. Pop Cork
3. Pour into festive glass
4. Place strawberry in glass
5. Relax, sip and enjoy your Christmas and New Year Season.
Residential Vacancy Rates- source latest REIV Data from Website
Click here for most recent REIV data.
Buyer Solutions in the Community
Kew Little Athletics held its inaugural fund raising event recently to great success. Starting gates were purchase at a cost of $15,000 and over $14,000 was raised at a fun Trivia Night. Buyer Solutions donated the most sought after item, a luxury night away. Should anyone wish to donate, please contact info@buyersolutions.com.au.
Recent Events and Successes
The REIV Awards for Excellence were recently held at Crown Palladium. With nominations again increasing this year for this coveted award, we were very proud to be amongst only four high quality finalists for Buyers Agent of the 2010. It was Buyer Solutions second year in a row as a finalist. A great night was enjoyed by David and Janet, who again attended.
Janet has recently been re-elected to the Members Council of the REIV to serve her ninth consecutive term. She was also re-elected as Vice Chairperson of the Buyers Agents Chapter, and has previously served two consecutive terms as Chairperson.
Future Events
Buyer Solutions will be hosting and presenting at a series of seminars for investors and home buyers in 2011. Dates, venues and topics are being confirmed and will be advised in future newsletters. Should you wish to register your interest in attending, please send an email with your name, contact details and email address to info@buyersolutions.com.au
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Vendor Advocacy and Buyer Solutions
4 Apartments for Sale in East Kew
Buyer Solutions purchased this block of apartments direct from builder in 1996 after he finished a makeover. We sold it to another happy investor recently who is seeking capital growth and will achieve that in this first class location.
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Successful Purchases at Buyer Solutions
Dorrington Avenue, Glen Iris
Our clients are resident in Hong Kong, investing in the Melbourne market now, before a planned return to live here in a few years time. Their priorities were a good period family home on a large block of land, with strong capital growth and this elegant family home fitted the bill perfectly. Saving almost $500,000 on a sale that occurred a week later, our clients are doing cartwheels with joy at the great result we negotiated after the property failed to sell at auction.
Tennyson Street, Elwood
Our investor clients were seeking a solid two bedroom apartment with strong capital growth and a good rent return. This huge two bedroom apartment, overlooking the St Kilda Botanical Gardens, was an off-market listing secured well within their budget. Buyer Solutions also arranged the leasing of this property. No stress, no hassle, top quality asset in the portfolio.
Daveys Lane, Merrijig
Buyer Solutions purchased this 129 acre, or 5.3 hectare property in Merrijig, in the foothills of Mt Buller. Our client, a professional ski instructor, is planning to build a home in this beautiful area, 180 degree views of snow capped Mt Buller and fabulous trout fishing at the bottom of the garden. As
The team at Buyer Solutions love the opportunity to swap stilettos for gum boots and our client is more than happy with the result. Not only did we enjoy the magnificent countryside, we also negotiated a great price for our client, given that this property was offered for sale by a mortgagee-in-possession
Two Townhouses in Launceston
A yield of 6.7%, depreciation and two tenants in place equals very happy investors.
2/3 Simmons Street Box Hill
Based primarily overseas, our client has children at school here in Melbourne and wanted a property where they could stay whenever he visits.. The market was so “hot” in Box Hill early this year, that we waited till now to buy. We believe this advice saved him $50,000 or more on what this great property would have cost him in March, 2010.
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