It's not that bad!

Talk about conflicting media reports, one day property values plummet, next day you are on top of the world!!! Who do you believe? All I know is that in my 35 years experience in real estate, life is currently good! Banks are still lending (maybe a little cautiously) the economy appears to be good. Australia (and West Australia in particular) would appear to have a good future based on the resources demand. So why are some properties not selling, that’s easy, it’s the same old story – Price.

Properties are selling and it is because they are priced right for the current market. You will have noted that some agents after an initial marketing period are removing the price from marketing asking for “offers” Personally I feel this strategy is in reverse and confusing.
Using “no price marketing” should be done initially and if it does not succeed in attracting an offer, then a realistic price (or price range) should be adopted.
PERTH REAL ESTATE
For some areas the future does not look that good (for sellers)! Some Perth suburbs have been identified along with areas of Sydney to have the highest mortgage to income ratio. What does this mean? With increasing interest rates (higher repayments) there is more likelihood that the amount of “forced or pressured” sales will increase. This may well affect any appreciation that we may have in the immediate future (next 12 months). Although, the third quarter figures will not be out until the end of October, I am betting that Perth will still be in negative growth. Sorry, but we have to pay for the ridiculous increase in sale prices (2006 – 07) that occurred in Perth.
However it does not apply to all suburbs. We (locally) are experiencing very good buyer demand.
If you are a buyer who is selling and buying in the same market (particularly if you are going up market) it is a great time to do it.
 
Whilst you may not achieve what you would like for your property, the house you buy is in the same  situation  and the gap between prices is reduced (and stamp duty). If you are a direct buyer you can savour the revenge of what was done to buyers in 2006 – 07. It was almost cruel that sellers had so much control and buyers were forced to make quick decisions or miss out. (Ask me, I bought in 2006, I know what happened!!)
RENTAL MARKET
Is buoyant, the vacancy rate is low and demand is very good. Usually the quality of your tenant is reflective of the quality of the property. My recommendation is to present the home as best as possible and to attend to any maintenance problems as soon as possible. Happy tenants are good tenants.
NEXT THREE MONTHS
I could almost say the next 12 months. Whilst I cannot see any great improvements in property values happening, there will always be buyers and sellers. Whilst I mentioned that some homes are taking longer to sell, what I really meant was sellers (or their agents) are taking longer to realise what a realistic asking price in the current market is!! Once this was taken into consideration buyer demand increased and sales occurred.
Regardless of what we think, buyers will determine market price in the current and foreseeable future.  Mr Charles Tarby (owner of Century 21 Australia) describes “a home for sale will sell today, all the rest are show homes”.
On the commercial side I would use the word “subdued”. Whilst retail sales and leasing are “rolling along”, sales of industrial and land are somewhat quiet.
0 comments | Posted by CENTURY 21 Max Comben on 05/11/2010 at 12:33 PM | Categories:

Who Do You Believe?

Recently listening to a local radio station it was stated by a respected member of the Real Estate Institute that the majority of Perth suburbs could look forward to prices remaining at present levels with no “noticeable” amount of appreciation over the next two to three years (apart from the Western suburbs which may experience a reduction) – Fair enough I thought in view of the turbulent financial times and interest rate increases.

Then, out of the blue, low and behold a Newsflash !!! – The Western Australian Newspaper states that the reputable company BIS Shrapnel reports that Perth’s medium house price will pass $600,000 within the next three years. An increase of 22% making it the highest of all capital cities!
You tell me – who does one believe?
Forget the so called experts, as it is not uncommon for discrepancies between them (not everyone can be right) but it would be nice to know who is!
Marketing Your Property
The definition of “value” is what a willing buyer will pay to a willing seller, Regardless of market conditions at the time.
However as your agent, it is our job to get the highest price possible, what ever that is, in the existing market at the time.
Now, here comes the trick! You have to make sure that all “willing buyers” are attracted to your property – but not necessarily by the price, (as some properties have been advertised at an excessive price) – Shocked? I know it’s hard to believe. Some Real Estate Agents would not do such a thing!
So to eliminate buyer rejection due to price – Its simple – REMOVE IT! You can do this via an auction or CENTURY 21’s “Express Sale” (known as “no price marketing”) which is like an auction without the stress of the auction day.
It may also attract buyers who because of “perceived” auction conditions, won’t come to the property.
 
It  may be that no price marketing is not working, then let’s put a “range” in, or if you are advertising a price without a good reaction, then take it out!! Either way, be innovative and not use the “prayer” method- “Please god, make a miracle happen”.
First all (if you were not aware) I would like to introduce Margaret Vandenbergh as the overall manager and our two property managers, Amanda Harris and Sonya Reynolds as our professional rental management team. It’s all done to protect your investment and by eliminating an initial small problem it prevents a larger one occurring.
Property Management
Following some “difficulties” your property managers have now adopted a “no tolerance” attitude to tenants in the way your properties are maintained. We may get a few tenants “off side” but so be it. A tenant enjoys the opportunity of residing in your property and we expect them to treat it with respect. You will note that inspections are now in much more detail and items that are mentioned needing attention (by the tenant) will be followed up and not assumed that it has been done or left until the next inspection.
After 35 years selling real estate I always come to the same conclusion, whilst prices may have “hiccups” in ups and downs, given time it only goes one way – UP. How many times have you heard 
the expression “If only I had bought back then”! Ah, hindsight is such a wonderful thing.
The Future
However there is no golden rule to advertising so, if the marketing you are using is not working – “Don’t flog a dead horse” – change it. If I have done an excellent job of confusing you, please call  me, I would like the opportunity of discussing the best marketing method for your property, should you be considering selling.
0 comments | Posted by CENTURY 21 Max Comben on 19/07/2010 at 11:03 AM | Categories:

2009 What Happened ?

Well, there was a definite increase in buyer demand and an increase in property values (although the “Top End” range in still a bit “slow” in some areas). We have seen a huge demand by investors and 1st home buyers (and with what the Government was giving, and still is as an incentive, why would you not buy) in the under $500,000 price range. It is almost like it was in 2006/07, we are getting multiple offers on properties and unhappy buyers. (the ones that missed out). It has been a year where “no price” marketing came back in fashion as a result of the increase in buyers and values rising – who could really tell what a property would sell for – within reason. Our period of days on market reduced and basically you knew you had a problem (with price) if you were still on the market after 30 days. I have said before, in most cases that “days on market” really refers to how long it takes you to get the price right and some agents have yet to realise this. Thus, the success of “no price” marketing. We saw bank rates rise and it made very little difference. However what we did see was a change in the attitude of banks, particularly with developers. Basically not only did you have to have adequate security but you had to show that you have an income to support the loan (irrespective of how much security you had). As a result of this, the amount of new developments declined, however I am positive that demand is going to continue and there will be pressure to fund developers in 2010. Overall the residential market was buoyant and remains so. The commercial market however, did not see as much activity and this was possibly reflected by the GFC (Global Financial Crisis). Many commercial decisions are made in the “East” which has been effected more then locally. People in Perth were saying “what Financial Crisis” and with the announcement of the major gas deals, Western Australia can look forward to a positive future. The rental market continued to increase the return on investment, vacancy factor was very low during the year as a whole, although in recent weeks there has been a slight drop in demand. 2010 Where are we going? I would like to think we can be a bit more accurate than a crystal ball. All indications are positive and whilst other states and countries slowly recover, I believe Western Australia will lead the way. ( One just hopes that we do not “over step” the mark as in 06/07 in regard to over inflated prices). My contacts in the building industry are all very positive and the signing up of new contracts is exceeding expectations. Our “Friends” in the east often used to joke about the initials W.A (Western Australia) stating that it stood for “Wait Awhile” as we are so far away from any where. This has now changed to “Way Ahead” as we are setting the benchmark for the country (maybe not in football). New Selling System We call it the “confidential” listing. There is no sign, no home opens, your address is not published and only “genuine” buyers are shown through. Yet, we can achieve a maximum price with conditions that suite you. Interested? call me so I can give you further details.
0 comments | Posted by CENTURY 21 Max Comben on 24/12/2009 at 3:42 PM | Categories: