Bought my Richmond site off this old widow who also had another few properties in Richmond, living by herself. Her other one was recently sold for circa $2.5m in a fantastic location. On auction day her 3 (adult) children were circling around her while she was sitting in her wheelchair, staring death in the face it seemed. I am seeing many of these type of properties up for sale now - either through a deceased estate or an old pensioner selling up to downgrade. Houses always have the same musky smell with ancient carpets and fittings. Good opportunity for the astute buyer, however, as the land underneath is fantastic.
33% of of new Starts in Melbourne being Abandoned
- Thread starter Peter 14.7
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Bought my Richmond site off this old widow who also had another few properties in Richmond, living by herself. Her other one was recently sold for circa $2.5m in a fantastic location. On auction day her 3 (adult) children were circling around her while she was sitting in her wheelchair, staring death in the face it seemed. I am seeing many of these type of properties up for sale now - either through a deceased estate or an old pensioner selling up to downgrade. Houses always have the same musky smell with ancient carpets and fittings. Good opportunity for the astute buyer, however, as the land underneath is fantastic.
nursing home accomodation is not cheap .... the owner/staff there have mortgages to pay..
Its a real shame developers are greedy. New homes are good for the economy, in the sense they have a multiplier effect on the people that work in the industry along with the materials, transport, logistics to get a new suburb off the ground. They (could...) constrain prices for existing property, and most importantly, with some of the incentives governments provide, they can help first home buyers into the market.
The reason FHB's arent buying the existing stock that is cheaper nearby (and which the valuers use for comp sales) is because to do so would require a larger deposit. not the 5% savings deposit, the funds to complete deposit which includes stamp duty etc, or the real estate agents deposit which is usually 10% upfront.
FHB who have access to this sort of cash are buying established. They arent having val issues, and they are getting good value buying ATM. Its the FHB without a large deposit either cause they had kids early, or are new immigrants, or have been renting for a long time or had inconsistant incomes or for some reason havent saved a whole wack of deposit.
To my mind is a classic example of a manipulated market. the government manipulates the market to make it easier for FHBs to get in, the developers further manipulate the market by only gradually releasing blocks and charging high sticker prices, then rebate at settlement. Every FHB I see comes and gets me to run the numbers on the 'rebated price of their H&L package, rather than the sticker price. Its so infuriating.
The banks try and manipulate the market by allowing for the FHOG at land settlement instead of first stage payment, or decline to lend in certain postcodes or for new housing stock altogether.
trouble is, none of these activities are illegal, or even actively discouraged. developers can sell for any price they like, and provide a rebate as well if they so choose. banks have the right to determine their own policy, and of course governments can incentivise for whatever they like, be it negative gearing, assistance for the car industry or FHB's.
If you ask the developer they would say they need high sticker prices on this release so they have the capex to proceed with the next release, otherwise they would have to wait longer for the next release, until the 'market' caught up and gave them the returns they need.
its just such a shame for the niave FHB's thats all.....
The reason FHB's arent buying the existing stock that is cheaper nearby (and which the valuers use for comp sales) is because to do so would require a larger deposit. not the 5% savings deposit, the funds to complete deposit which includes stamp duty etc, or the real estate agents deposit which is usually 10% upfront.
FHB who have access to this sort of cash are buying established. They arent having val issues, and they are getting good value buying ATM. Its the FHB without a large deposit either cause they had kids early, or are new immigrants, or have been renting for a long time or had inconsistant incomes or for some reason havent saved a whole wack of deposit.
To my mind is a classic example of a manipulated market. the government manipulates the market to make it easier for FHBs to get in, the developers further manipulate the market by only gradually releasing blocks and charging high sticker prices, then rebate at settlement. Every FHB I see comes and gets me to run the numbers on the 'rebated price of their H&L package, rather than the sticker price. Its so infuriating.
The banks try and manipulate the market by allowing for the FHOG at land settlement instead of first stage payment, or decline to lend in certain postcodes or for new housing stock altogether.
trouble is, none of these activities are illegal, or even actively discouraged. developers can sell for any price they like, and provide a rebate as well if they so choose. banks have the right to determine their own policy, and of course governments can incentivise for whatever they like, be it negative gearing, assistance for the car industry or FHB's.
If you ask the developer they would say they need high sticker prices on this release so they have the capex to proceed with the next release, otherwise they would have to wait longer for the next release, until the 'market' caught up and gave them the returns they need.
its just such a shame for the niave FHB's thats all.....
Interesting point of view and something that some brokers might (or might not want to) chime in about. It has been observed in several areas before where banks have pulled back on their lending ratios that growth has been slowed and even reversed resulting in dropping values. All of this due to banks being risk averse. Had the banks not been so risk averse but instead kept financing at the same high levels, the growth (due to demand by borrowing consumers) would likely have kept climbing.
Bear in mind that banks are not silly and there could be a handful of reasons for their changing attitudes toward certain areas/postcodes.
chicken and egg. Is it the banks fault people are selling for less and therefore valuations for other properties drop, or is it the banks foreclosing and making people sell for less then the valuers following that price?
I dont htink it matters really who moved first, but it is certainly intertwined. low vals cause risk departments in banks to take notice, who might then restrict LVR's in certain postcodes, apartments, security types, which further impacts subsquent valuations. Classic example was Docklands in melbourne a decade ago. lots of OTP property coming onto the market, some distressed sellers setting the benchmark for valuers, banks then restircting LVRS, and a vicous spiral ensued.....
Over supply in the Melbourne area will always have an influence on values at any given time. I think the key thing though, is that the huge flurry of construction starts were (mostly) intended to address a future under-supply problem.
ABS and statistical data trends indicate that the Melbourne area is growing in population more rapidly than other cities in Australia. This includes both international migration between the states; along with new arrivals to Australia from other countries, opting to settle in Melbourne.
The problem is, following such trends is a dangerous thing for developments. About ten years ago, when similar strong population growth trends were noted for the Gold Coast area, developers went into overdrive. We all know what happened thereafter (when the population predictions did not meet the sudden swells observed there).
That said, there is plenty of opportunity still prevalent in the greater Melbourne area, along with regional Victoria:
Cameron McEvoy
ABS and statistical data trends indicate that the Melbourne area is growing in population more rapidly than other cities in Australia. This includes both international migration between the states; along with new arrivals to Australia from other countries, opting to settle in Melbourne.
The problem is, following such trends is a dangerous thing for developments. About ten years ago, when similar strong population growth trends were noted for the Gold Coast area, developers went into overdrive. We all know what happened thereafter (when the population predictions did not meet the sudden swells observed there).
That said, there is plenty of opportunity still prevalent in the greater Melbourne area, along with regional Victoria:
Cameron McEvoy
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