Archive for category Property Updates

Australia’s property markets among the best performers in the world

Sep 3

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house-prices The Australian real estate market is experiencing a period of sluggish growth and activity, but property values are performing strongly when compared to our overseas counterparts.

The Global Property Guide’s latest survey of house prices, which uses price changes after inflation to gain a more realistic picture, reveals an uneven recovery in global housing markets during the 12 months to June 2010.

Over that period, 18 countries had house price increases and 18 countries had price declines.

Europe presented mixed results, with Finland (up 9%) defying the downward trend of decline experienced throughout Ireland, Bulgaria, Lithuania, Iceland, Russia, Croatia, Spain and Slovakia.

In the US, house prices fell 3.31% over the year, while Canadian house prices were up 1.47%.

Singapore performed best overall, with a 34% house price increase recorded between June 2009 and June 2010. House prices in Hong Kong, Taiwan and China also surged 21.4%, 11.51% and 5.78% respectively.

Strong economic growth, low interest rates and increases in foreign demand fuelled house prices in these four countries, raising fears of a property bubble. In June the International Monetary Fund warned that the booming Asian real estate markets “may pose risks to financial stability.”

In response, Singapore, Hong Kong, Taiwan and China all swiftly tightened credit supply by lowering the loan-to-value ratio. Singapore and Hong Kong have also increased land supplies, and China has increased the down payment requirement for second-home mortgages to 50%.

Closer to home, the July RP Data-Rismark Hedonic Home Value Index confirms that Australian property values are holding their own.

“In the period between end 2008 and March 2010, Australian home values rose by 16.3%,” says RP Data’s research director, Tim Lawless.

In the month of July Australian home values remained virtually unchanged, recording an increase in value of 0.1% for the month. Annually, house prices jumped 9.7% in the 12 months to June – and Lawless believes the outlook for the rest of the year remains positive.

“There is the possibility of modest gains,” he says, “if mortgage rates remain in check and economic conditions continue to improve.”

Source:www.yourmortgage.com.au

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New risks threaten house price bubble

Aug 27

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housingprices Gerard Minack, a senior economist at Morgan Stanley, predicted two years ago that house prices were set to experience a dramatic 30 per cent fall by this year given rising unemployment.

”Australian houses are much more overvalued than US houses; indeed, on some measures, our houses are arguably the most expensive in the world,” Minack said.

”My very simple take on it – the bigger the bubble, the bigger the pop.”

But with no snap crackle or pop, and debate still raging whether there has been a bubble, Minack last week revised his script to envisaging the bubble deflating, not popping.

”Dodging the worst of the global financial crisis didn’t demonstrate that there’s no bubble. In my view it just showed we dodged the prick,” he said.

”I’m not persuaded by arguments that houses are sustainably priced. Most measures suggest house prices are around 40 per cent above fair value. However, the risk of big price declines in the near term seems low.”

Minack points out that much of the discussion about the residential market future overly concentrates on owner occupiers despite a jump in taxpayers reporting rental income jumping from 608,000 in the late 1980s to about 1,765,000 now.

He notes the percentage of landlords claiming a rental loss (that is, rent not covering interest and other costs) has risen from 50 per cent to 70 per cent over the past decade.

With broad-based job losses appearing unlikely, Minack now sees the more imminent risks to property price growth as the

banks tightening credit and negative-gearing landlords departing the market due to low capital appreciation.

Ignoring the fact that investment property for many is their nest egg in the absence of superannuation, Minack envisages property investors becoming disillusioned with the ensuing widespread disposal of their investments. ”This is an investment that depends on capital gain for its payback. With net income not even covering interest charges, this is a classic Hyman Minsky Ponzi scheme,” he says.

”The real return on residential property over the next decade is likely to be negative.”

Minack also took aim at the Reserve Bank deputy governor, Ric Battellino, who recently said that 75 per cent of household debt was held by the upper 40 per cent of income earners.

”It is simply wrong to assert that rental properties are largely owned by high-income households: losing on residential property investment is largely a middle-class affair,” Minack writes.

”Taxpayers who earn $80,000 or less own 80 per cent of all loss-making properties.”

His 10-year negative return timeline forecast is offered without explanation. But the prospect of a price plateau rather than a pop is a much more plausible position for Minack to now embrace. This is especially so for Sydney which recorded a slump and then negligible price growth for many years after the last investor-inspired boom that peaked in 2004.

Some further excessive froth in Sydney pricing that was evident by late 2007 and early 2008 was removed by the global financial crisis fall-back.

It wasn’t until late 2009 that Sydney’s median house value finally surpassed the $568,000 peak of early 2004, according to Australian Property Monitors. At its worst, during the global financial crisis, the median was 6.5 per cent off its earlier peak. It’s now at $625,000.

But Minack, who lives in Mosman, has only to sound out another economist, Stephen Koukoulas, to know that many neighbourhoods across Sydney are going nowhere fast.

Koukoulas, now based in London as the chief global markets strategist for TD Securities, sold out of Mosman earlier this year for $1,175,000. The Mosman house had traded at $1,285,000 in 2007.

Mosman’s pricing is problematic, but Minack’s abandonment of his bubble pop forecast is especially intriguing as Melbourne’s price juggernaut has put it in a more precarious position than Sydney.

Melbourne’s dwelling price growth over the past decade sits at 174 per cent compared with Sydney’s 83 per cent, according to Australian Property Monitors.

Over the past five years it has been 66 per cent in Melbourne and 17 per cent in Sydney.

The latest Housing Industry Association affordability survey for the June quarter suggested Melbourne could shortly rank alongside Sydney as the least affordable Australian cities.

The HIA chief economist Harley Dale noted affordability dropped year on year by 39.8 per cent in Melbourne and in Sydney by 33.5 per cent.

”If that trend were to persist then you would rapidly be approaching a situation where Melbourne is on a par with Sydney in terms of [least] affordability,” Mr Dale said.

Story by Jonathan Chancellor www.domain.com.au

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Hung parliament to hit Australian markets

Aug 24

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Abbot Australia’s political deadlock is set to hurt financial markets with the uncertainty expected to send share prices and the local currency lower, analysts said Sunday.

In elections Saturday, neither the ruling Labor Party nor opposition Liberal/National alliance won enough seats to govern alone.

“Markets traditionally don’t like uncertainty and clearly markets would have been anticipating a (clear) result,” UBS economist Scott Haslem told AFP.

“So the market will have to deal with some uncertainty when it opens up on Monday.”

In advance of the election, Sydney’s main share index lost 1.07 percent, or 48.1 points, to 4,430.9 on Friday in line with regional falls.

Haslem said the Australian dollar would likely fall amid the stalemate, which has seen Labor Prime Minister Julia Gillard and her conservative opponent Tony Abbott battling to win the support of five minority MPs.

“What is more likely is that you end up with more volatility than you end up with a fundamental move in the currency, because fundamentally nothing has changed (to the economy),” he said.

The hung parliament leaves the future of the government’s plans for a tax on the nation’s profitable mining sector and a national high-speed broadband network hanging in the balance.

Commsec chief economist Craig James said any political uncertainty was “a major negative for financial markets”.

“In the short term the Aussie (dollar) has the potential to lose ground,” he told AFP, saying the currency could lose as much as one US cent after closing Friday at 89.05 cents.

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Pedlars of House Price Doom off the Mark

Aug 18

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Reserve Bank of Australia The level of household debt in Australia has risen over the past three decades from less than 50 per cent of household disposable income to about 150 per cent.

Ric Battellino, the Reserve Bank of Australia deputy governor, has sought to allay concerns that this indebtedness means we face a risky unsustainable outlook. He said that 75 per cent of household debt was held by the upper 40 per cent of income-earners.

The bank’s governor, Glenn Stevens, had earlier given the RBA’s estimate of Australia’s dwelling price-to-income ratio, which found that dwelling prices in capital cities were typically 4.8 times disposable household incomes – about half the ratio put by the doomsaying international survey Demographia.

The Commonwealth Bank chief executive, Ralph Norris, was asked after the bank announced a $6 billion profit last week whether the housing doomsayers were nuts.

”I wouldn’t go as far as to say they’re nuts but I think that it’s very easy to make assertions based on averages,” he said. ”You come to a different view when you look at the fact that the incomes based around averages are not relevant to the average person that has a mortgage.

”So you know, we’re in a situation here where, in my view, the housing market in Australia is healthy.

”There will obviously be variations in price and we shouldn’t be surprised if there are, you know, drops of 5 per cent or 10 per cent, as there are obviously increases in value.

”But I think the range of value is not going to be anything that suggests a bubble and a collapse of the housing market in Australia.”

Deutsche Bank issued a research paper last week suggesting Australia’s house prices were not as vulnerable as doomsayers argue.

While acknowledging that on many comparisons Australia had a high house price-to-income ratio and high levels of household debt, the Deutsche Bank economists Phil O’Donaghoe and Adam Boyton argued the vulnerability of Australian housing was ”overblown”.

”The housing market is perhaps the most common vulnerability we are asked about in the Australian economy,” the said.

”Combined with the role played by the US housing market in the financial crisis, investor awareness and suspicion of this key asset class is perhaps understandable.

”But we have long held the view that a broader assessment of the Australian housing market offers a more sanguine conclusion.”

The Deutsche Bank report noted that mortgage debt obligations in Australia were fully recourse loans and borrowers’ mortgage obligations extend beyond the mortgaged property, therefore providing a greater incentive for repayment relative to the United States.

Battellino suggests the strongest evidence on the sustainability of household debt was the low level of arrears. This was evident again this week in housing repossession data.

Repossession actions lodged in the NSW Supreme Court for the first six months of 2010 totalled 1198.

There were 3800 last year and 4000 during 2008. The peak year was 5300 in 2006.

Foreclosures in the US rose 4 per cent from June to July, exceeding 300,000 for the 17th month in a row, according to RealtyTrac.

The number of foreclosure activities, which incorporates all phases of foreclosure including default notices, scheduled auctions and bank repossessions, totalled 325,229 in July.

Lenders seized 92,858 properties last month, the second highest monthly total since RealtyTrac began tracking repossessions in 2005. Total foreclosure activities reached 1.65 million in the first six months of 2010.

Deutsche Bank noted that Australian house price concerns were ebbing. ”The pulse in housing finance has moderated in line with rises in the cash rate. The housing cycle points to a steady moderation in price pressures.

”Elements of the market which had been described by the RBA earlier this year as demonstrating elements of ‘considerable buoyancy’ have moderated. Auction clearance rates have also slowed.” From a peak of 72 per cent at the end of last year, auction clearance rates had fallen by last month to 61 per cent, Deutsche said.

Story by Jonathan Chancellor www.domain.com.au

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Price pause may bring back first home buyers

Aug 18

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First Home Buyers could be back In fact, both the national figure and the NSW numbers are at nine-year lows. Included in this data release is the proportion of loans to first home buyers. In NSW, this proportion seems to have bottomed out, bubbling along just above the low of 16 per cent seen in March.

House prices for the June quarter continued growing but at a slowing rate. This was a good result for existing home owners. Some of this strength was due to investors continuing their return to the market, as evidenced by the increase in investor finance in the past 12 months, filling the gap left by exiting first home buyers and other owner-occupiers.

However, this trend reversed in the June numbers, with the value of loans to investors falling significantly for the first time in nearly a year. So, while auction clearance rates and first home buyer numbers seem to have stabilised, it’s very likely the drop in demand for loans for owner-occupied and investor housing will translate into flat or falling prices across Sydney during the spring season.

Indeed, a closer look into June-quarter house prices showed that in the month of June, prices did fall slightly across Sydney as a whole. Of course, a pause in growth or some orderly declines in prices is good news for aspiring owners and probably necessary to encourage first home buyers back.

Matthew Bell is the economist for the Fairfax-owned Australian Property Monitors.

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A renovation value proposition car parking

Aug 16

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Car Parking at a premium The days of only looking for a property through the paper have changed, with the majority of people these days starting their search online and loving the flexibility of being able to set up alerts and notifications so they get told when a property that meets their search criteria becomes available in the marketplace.

Purchasers can first narrow down the number of potential properties they’re interested in through use of criteria such as: location, price, property type, number of bedrooms, number of bathrooms, land size, car parking, etc.

They’ll then look at the results that have been returned by the search engine they’re using and narrow it down further. They’ll do so according to the first impression they get from the photo, heading or first sentence. They’ll only open some of the listings to actually read the description in full and see all the photos.

So my question is this… If you’re going to put in parking into your investment property, which is going to give the best returns? Does having a garage add more value then a carport? And what about a shade sail? Or just a driveway with an uncovered parking space? Are potential buyers or tenants even going to care too much about what type of parking it is, as long as it has some?

The majority will argue that a garage will bring in the highest returns (how much it adds to the value of the property compared to how much it costs to put in), especially if the garage is needed for more reasons than just parking the car.

It’s often perceived as a space with multiple uses. There’s the potential to use the garage as an additional storage space or as a handyman’s workroom. It also provides additional security for the occupier’s vehicles and other belongings.

For some people it can also be an additional living space, like a rumpus room where they might have a pool table, bar, etc.

On the other hand building a garage also costs the most and involves getting plans approved by the council which can introduce additional delays for the project. All in all a new double garage costs somewhere around $40,000 these days inclusive of all costs. And it tends to add somewhere between $50,000 and $70,000 to the bottom line of a property investing deal, depending on the location of the home.

So is it really worth it? If you have that much extra in the budget for your renovation, then it probably is. But not everyone does.

A carport does cost less to construct and still provides undercover parking for cars, however it also requires getting a permit from the council which may cause delays and introduce additional costs. So what does that leave us with?

The shade sail. In some councils having a cover which isn’t 100 per cent solid which is under three metres in height may not require council approval. They still protect your vehicle from UV rays and the higher quality ones can be fairly weather resilient.

They can also look very modern in appearance and are quite often used in new developments and display homes. You can get them for around $1500 to $3400 (3m x 6m) including poles and fittings. Surprisingly they tend to increase the bottom line of a renovation deal more than a standard carport. They tend to increase the value of the home by about $5000 to $15,000.

Interestingly having uncovered parking doesn’t add as much value to the renovation deal as you’d think. Although most people would be happy that a property has some parking they won’t value it as much as any of the other options.

There are exceptions as always and central business districts of most big cities fall into that category where any parking at all is considered a blessing.

 

Ana Stankovic is well known as one of Australia’s leading renovating-for-profit specialists and is regularly featured in prominent industry publications, expos and continually educates investors.

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Last 12 months saw Oz property prices soar by almost 20%

Aug 9

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22-2 Residential property prices in major Australian cities have increased by almost 20% in the last 12 months, according to the latest figures to be released.  
The data from the Australian Bureau of Statistics shows average quarterly growth to June of 3.1% and an annual increase of 18.4%.

The data shows growth of almost double that of the private sector RP Data/Rismark index released last week which showed national city dwelling values up 10.5% in the same period.
In Melbourne house prices increased more than 24% in the last year while in Sydney they rose 21%, according to the ABC figures.

Canberra saw a 19.6% price increase, Darwin 14.6%, Perth 13%, Adelaide 11.l6%, Hobart 10.8% and Brisbane 8.5%.

The data reveals that the rate of growth in capital cities peaked at 5.5% in the December quarter last year, after rising from negative territory during the economic downturn, and is now steadily falling.

In the second quarter of the year prices increases slowed considerably. In Sydney they increased by 4.9%, by 3.6% in Melbourne and by 3.2% in Adelaide.  Darwin saw a 2.8% increase, Canberra was up 2.1%, Perth 0.4%, Brisbane 0.3% and Hobart 0.1%.

Last week’s RP Data index showed average house prices had fallen slightly after 17 months of consecutive gains, as economists agreed the market was at a turning point. In a note ANZ economists said while growth was expected to slow further this year, prices would be supported by the underlying housing shortage and a buoyant outlook for the Australian economy.

It comes as analysts warn that Australia is facing a housing crisis and that the national shortfall of 190,000 dwellings will widen to 466,000 by 2020, amid expectations of a rapidly growing population.

Developers claim that a shortage of land and a lengthy planning process is hampering construction. HIA chief economist Harvey Dale said it takes an average of seven to eight years for a greenfield site to reach completion, an unnecessarily long period that pushes up costs and reduces supply.

‘At the end of the day, the lack of adequate, affordable land supply is at the heart of the problem. The number of processes a development must go through is higher now than was the case 10 years ago. We are regressing rather than progressing in terms of the bureaucracy involved in building a new home,’ he said.

Story source www.propertywire.com

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Take the stress out of your mortgage

Jul 27

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home-loan-qualification Top tips to get you home sooner
It is estimated that 469,000 households will be suffering some degree of mortgage discomfort by December and the number of those in severe stress (facing a potential sale, foreclosure or forced refinance) could be as high as 267,000*.

How can borrowers at risk of mortgage stress reverse the trend, save money and own the property sooner?

Spokesperson for Mortgage Choice, Kristy Sheppard said, “There are shortcuts that can help borrowers avoid mortgage stress, reduce their loan term and the interest paid. It’s about taking control of their finances by managing their mortgage instead of letting it manage them.”

“Avoiding mortgage stress is often a greater challenge for new borrowers, many of whom are adapting to a budget for the first time. Of course, some common causes of mortgage stress are higher interest rates and rising living costs. However, another very common cause is over-indulgence in post-mortgage debt.

“Mortgage Choice’s 2010 Recent First Homeowner Survey revealed 15% of respondents had taken on within the first two years what they saw as ‘significant’ post-mortgage debt. Of those, 70% had spent between $0 and $20,000, 26% had racked up between $21,000 and $50,000, and 4% had really splurged, with extra debt of $51,000 or more.

“If these borrowers and others facing a similar situation want to better their mortgage situation they need to be proactive in their repayment strategy. By maintaining regular repayments above current interest rates, being disciplined in keeping to budget, making extra contributions, fully utilising the loan facilities available and regularly ‘shopping around’, borrowers can potentially fast track their way to outright ownership.”

Australia’s largest independently-owned mortgage broker, Mortgage Choice recommends these top tips:

Contribute to your change
Paying a little extra every month can have a big impact in the long run. Based on a loan of $300,000 at 7% over 30 years, if you round the monthly repayments of $1,996 up to $2,050, the loan will be repaid approximately one year and eight months earlier, saving you over $25,000 in interest.

Make a dent
Making a lump sum payment (big or small) into a loan can make a substantial difference. If you deposited your tax return of, say, $500 into the above mentioned loan, it would reduce the overall term by one month and the total repayments by just over $2,350. Doing so annually would make a significantly larger dent.

Make the most of loan features
Loans with offset accounts enable borrowers to link a savings account with their home loan account and ‘offset’ or use that amount to reduce the interest accumulated on their mortgage. For example, if a borrower has $5,000 in an offset account, then on a $300,000 loan (at 7% interest pa) the term would be reduced by around 1 year and the borrower would save over $33,000. It’s worth enquiring about but be aware there could be an ongoing cost for keeping the account, such as a monthly fee.

Don’t settle for second best
If you went for a premium loan you may be repaying at a higher interest rate for facilities and features you don’t need or use. Consider refinancing to a more basic product offering a lower interest rate – your repayments will be lower, and therefore you’ll be able to afford to pay your loan off quicker. When refinancing to a new loan and/or lender, be aware you may incur exit fees.

Give your loan a check up
If you already have a home loan, look at doing a home loan health check regularly because the mortgage market changes all the time. You might be able to get a better package now.

Keep your eye open for bargains
You might also investigate your eligibility for a ‘professional package’ home loan, where you can receive a reduced interest rate, no application or other fees, gold credit cards, and home insurance and other product discounts and benefits.

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Third time unlucky for home owners?

Jul 23

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Job buttonDespite a second consecutive rate reprieve from the RBA this month, economists believe the ongoing strength in the domestic labour market could result in an interest rate hike as early as August.

Australia’s unemployment rate was unchanged at 5.1 per cent in June, from a downwardly revised 5.1 per cent the previous month, according to an Australian Bureau of Statistics (ABS) report.

It is the lowest jobless rate as well as the fewest number of unemployed workers, 598,400, since January 2009.

A total of 45,900 jobs were created in June, triple the market forecast of 15,000, statistics revealed.

Part-time positions rose by 27,500 in June, while full-time staff increased 18,400.

Employment has increased in nine of the past 10 months, with 356,300 jobs added to the national economy since June 2009.

JP Morgan economist Helen Kevans said the improvement in the labour market could accelerate wage rises and add to pressures on inflation.

“Further evidence of building wage pressure will add to an already worrisome inflation outlook, with headline inflation likely to remain above the RBA’s 2-3 per cent target range this year and next, and core inflation to be above target by year end,” Ms Kevans said.

“We believe an elevated print on the upcoming second quarter CPI on both the headline and core measures will be enough to trigger another rate move, with our forecast calling for a further 25 basis point hike to the cash rate in August, providing conditions do not deteriorate offshore.”

T??h?e RBA’s decision to hold ?the? interest ?r?a?t????????????e???? steady recently, ?f?ollowed six increases from 3.0 per cent to 4.5 per c???ent ?b???e???tween ???O?c??t???o???b???e???r??? ??2?0?0?9? ?????????????????????and May 2???010.?????????????? ???????????????

N????????????????????ational? Australia Bank senior ?economist D?avid de Garis said the jobs data reflected the strong local e????conom???y against a backdrop o?f weak Atlan?tic economies and brought into focus the consumer price ?i?ndex ???(C?PI) report on July 2?8?.????????? ?

????”F???????or the RBA, this reasserts t?he imp?ortance of the upcoming second quarter CPI," Mr de Garis said.?????????????

??”???If underlying inflation is running at a year to 3.0 per cent or more (rather than the RBA’s 2.75 per c?ent f?orecast) then the RBA would have to seriously consider another rate hike to crimp interest s?ensitive? demand to make room for the resources boom that now looks to be coming to the fore.??’?'?? ???

?Commonwealth Bank senior economist Michael Workman said the mining states had usurped Victoria in ?leading the nation’s employment growth.?? ?

T????he unemployment rate in Queensland fell ?from 5.5 to 5.3 per cent and Western Australia dropped 0.1 p???ercentage point to 4.0 per cent.??? ???

“????So most probably you’d argue here that some of the mining states are starting to show more consistent an?d stronger jobs growth than the east coast states,??’?'????? Mr Workman said.??? ?

In WA, 18,000 part-time jobs were added during the month, ABS data sh?owed.?????? ???

M????r Workman said if inflation and the jobs market remained strong, the RBA ??????could possibly lift interest rates twice by year end.?????

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What’s the right price for property?

Jul 21

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The right price for property It’s one of those clichés you’ll often hear in real estate … properties that are priced appropriately are selling. It seems so obvious, really. When you’re making such a big investment surely you’d only do it at the right price? But of course buying houses is emotional and there’s so much more that goes into it than rational thinking about whether it is money well spent. It could be the look and feel, the layout, or the location that sways one buyer to pay a whole lot more than the rest.

If you want to look at how complicated human decision-making is just look at how we pick which political parties will win government. Now that there’s a federal election looming, we’ll all have more than enough opportunity to gawk from the sidelines as votes are won or lost on looks, tone, sound, hair colour, and a little bit of policy, real or perceived.

Nevertheless, when it comes to houses, a lot of real estate agents are saying that buyers are being a lot more careful, and really weighing up where to put their dollars. Less competition from other buyers is providing house hunters with more choices, and they’re taking their time, choosing wisely, and demanding properties are up to scratch.

It’s one of those clichés you’ll often hear in real estate … properties that are priced appropriately are selling. It seems so obvious, really. When you’re making such a big investment surely you’d only do it at the right price? But of course buying houses is emotional and there’s so much more that goes into it than rational thinking about whether it is money well spent. It could be the look and feel, the layout, or the location that sways one buyer to pay a whole lot more than the rest.

If you want to look at how complicated human decision-making is just look at how we pick which political parties will win government. Now that there’s a federal election looming, we’ll all have more than enough opportunity to gawk from the sidelines as votes are won or lost on looks, tone, sound, hair colour, and a little bit of policy, real or perceived.

Nevertheless, when it comes to houses, a lot of real estate agents are saying that buyers are being a lot more careful, and really weighing up where to put their dollars. Less competition from other buyers is providing house hunters with more choices, and they’re taking their time, choosing wisely, and demanding properties are up to scratch.

Agents are saying many vendors are yet to catch up with the swift market cooling of the last couple of months and want higher prices than buyers are prepared to fork out.

I saw a great example of the old price-is-right mantra this week when I spied a sandstone home for sale. Double fronted, it looked like the perfect family pad – except that its immediate neighbour was the car park of a sex shop, and only four doors down, across the road, was a train line. Oh and it had a pretty busy road a few doors the other way.

It could have easily been a house that languished on the market while the vendor held out hoping that the prestige of the neighbourhood that it bordered might rub off. But the vendor was either in a hurry to sell or had a good sense of where the market was at because the home was priced at about $200,000 less than comparable places just a few streets away. On the first open there was a surprising buzz – not quite a swarm – but a healthy hum of activity from house hunters.  And less than a week later, a big SOLD sign was slapped up out the front.

Part of the problem for vendors is the market has been moving so fast lately that it’s hard to keep up. One moment it’s hot and the next it’s not. In pockets there’s still plenty of buying action, for example one Sydney agent says she had 53 people inspect a property in the trendy inner west over the weekend. But in others, real estate agents are ringing around trying to drum up interest.

When you’re selling working out what price you should go for is hard. But just as house hunters are told to find up to a dozen recent comparable sales when they are researching a house’s value, vendors can do that too. The advice for house hunters is to look at the prices places nearby have sold for in the last six months, being careful to compare apples with apples by finding properties that have similar land size, bedroom numbers, layouts and car parking. Sales in the last three months are particularly telling.

If you’re a vendor and you want to find out where the buyers’ thinking is in terms of money, you’d do well to do that research. That way you will find out which direction the market is going in your area, and will be using the same pricing method as your buyers. Of course, if you decide your home has special features and it’s worth holding out for a better price, you might just be lucky – after all spring is just around the corner and the warmer weather brings out the buyers.

Story by Carolyn Boyd – Domain.com.au

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