Is Mebourne Booming????

[NOT 2 L8]

An interesting article by Ben Schneiders and Chantal Rumble of the age and reproduced by Domain.com regarding pre auction price quotes. Below is an extract of a quote by Enzo Raimondo, head of the Real Estate Institute of Victoria.

Mr Raimondo said it was "very simplistic and not correct" just to compare the advertised and final sale prices. Agents argue that the difference between the quote and sale prices is the result of a rapidly moving market. "We have unprecedented demand in certain pockets of Melbourne," Mr Raimondo said.

But the REIV's data shows that prices — for auctions and private sales — in the first three months of the year fell across all price segments. In the top 15 per cent of the market, the median price dipped 3 per cent, while for the top 5 per cent, prices dropped 4.3 per cent.

My question:- Is Melbourne in the wake-up phase or are some trying to talk it up??

Input please.

Cheers Chrisv.

 

[TheCamel]

I dno't think it's booming. I think it's starting to ramp up however.
Heat up, whatever.. call it what you want.

I base this on absolutely no evidence whatsoever but a feeling.

 

[WinstonWolfe]

Who is in the best position to identify a rapidly rising market?
REAs

Why don't they incorporate that information into pre auction quotes?
they act for sellers not buyers
bait pricing works in the seller's favour.


Bait pricing draws bigger crowds to auction. Bigger crowds with more bidders makes all in attendance believe the market is running hot. Auctions are a theatre. And bait pricing makes for a bigger show.

Bait pricing makes buyers think the market is hot. And encourages them to buy now rather then later..... i.e.

buyer at auction
"wow, gee, that auction result even took the REA by surprise...and he knows the market!!!!! the market must be hot as. I'll have to be better prepared for the next one"
agent at auction
wide eyed innocent look "gee, what can I say. the market is moving quicker than I realized"

yes REA, quicker than you realized at last week's auctions.....yeah sure...


I look forward to the day when REAs are made extinct by private internet listings. And buyers instead use Buyers Agents. After all, it is the buyer that has to invest the most time into a property deal, and has the most to gain by outsourcing that research and negotiation.


BTW, I was at two auctions in Melbourne on the weekend....and was delivered bait prices for both.....and the REA topped the bait price strategy by suggesting the market isn't that hot. yet another REA from their office told me after knock down, they had attained record prices every week since Feb.

The fact is, the market is moving. And REAs know it, and are exploiting it the best they know how.

 

[Peter 14.7]

Agree with WW.

Agents play a lot of tricks.

Auction Clearance Rate for example.

The day we sold via auction in NSW, march 05, the agents had six auction listed. 3 got pulled due to no registered or only one registered bidder. Ours sold.

Assuming the other did not then did the agents report a 50% clearance or a 20% clearance rate?

As to Melbourne I just bought for a friend a property in west Melb and we got a huge discount on asking. Distressed seller. We think it will pick up but interest rates are still hurting many as above.

IMO It is begining of the end of the decline and next year will be the beginning of the rise. Boom not until 2009, if then.

Peter

 

[landlubber]

With associates we've bought five IPs ( houses on largish lots with future potential) in Melbourne "middle ring" Eastern suburbs in last month or so, and the competition is just "red hot". Lot's of people at opens. Lot's of offers.
It's definitely moving IMHO.

LL

 

[WinstonWolfe]

Peter, I was in Mont Albert and Blackburn North. I presume Melbourne has pockets of heat in the more strategic burbs, and it appeared to me that Melbourne is around 2-3 months behind the trend in Brisbane, which is more ubiquitous.

 

[NOT 2 L8]

..............which is more ubiquitous.

In the imortal words of the wise one.........."Please explain"

Cheers Chrisv

 

[pieman]

ive seen 20% gain in some suburbs in the last 5 months and i view lots of properties, while some suburbs are flat..
pieman

 

[WinstonWolfe]

In the imortal words of the wise one.........."Please explain"

Cheers Chrisv

well only cos it is your thread Chris

WordNet - Cite This Source ubiquitous
adjectivebeing present everywhere at once [syn: omnipresent]
WordNet® 3.0, © 2006 by Princeton University.

 

[aussierogue]

inner melbourne

If you check out another thread most believe that inner melbourne (10 km or less is growing at a red hot 15-20 pct. The outer is lagging way behind.

Cheers
Aussie

 

[ILoveProperty]

Boom is a strong word, but I can't help but think history is repeating.
Similar things happening as maybe the mid to late 90's? Desirable suburbs running hot, lots of demand. Such as Hawthorn in the East, Essendon in the West. Toorak around to Brighton. Soon people will again be priced out of these markets and the ripple effect will take over.
Well that's what I'm hoping

 

[landlubber]

It's a classic "ripple" effect starting near the CBD (even well reported in the press) and it will move outwards over the next two or so years. But by then it's too late. We're buying Melbourne now ...and I don't mind if I'm a bit early as vacancies are tight and rents are on the rise.

LL

 

[jingo]

It's a classic "ripple" effect starting near the CBD (even well reported in the press) and it will move outwards over the next two or so years. But by then it's too late. We're buying Melbourne now ...and I don't mind if I'm a bit early as vacancies are tight and rents are on the rise.

LL

IMHO You're not early landlubber. Get in now while you can - especially in the inner 10km. I wanted to bid on a property in Nth Melb in an auction that was sposed to be held in two weeks. Received a call today to say the property had been sold. - $150,000 above the quoted price!!!! (37% above the asking price). Not only that, the property in question was in a mixed zone.

I'd say its safe to say that Melboure is definetely on the rise within the inner suburbs.

 

[Ausprop]

this is so strange...all the expert opinions are saying forget it property aint going anywhere, yet this forum is firing up with excitement about boom times and yesterday Steve McKnight sends me an email with his spin on it saying get in their son. The stock market is going stronlgy and with affordability so low I can't see why property is about to take off (or has taken off?). If it was about to go crazy I would jump in but at this stage it is just hard to envisage

 

[WinstonWolfe]

I'd agree with you Ausprop that we are not going into a boom of the proportions of the last, where prices more than doubled.

I do believe that in strategic locations we will see growth something like this
FY cg
2007 15-30%
2008 10-15%
2009 5-10%
2010 5%
2011 4-5%
2012 4-5%

My reasons are twofold

- I don't see lenders being able to increase the amount they lend for a certain serviceability capacity. But yes we will have more people getting richer, but not enough to keep prices pumping along at 7+%.

- The market will balance out in relation to yields. Wages cannot keep yields above 5% at property growth rates above 7%.

 

[WinstonWolfe]

http://www.theage.com.au/news/Busin...ential-property/2007/05/02/1177788205789.html

 

[Peter 14.7]

this is so strange...all the expert opinions are saying forget it property aint going anywhere, yet this forum is firing up with excitement about boom times and yesterday Steve McKnight sends me an email with his spin on it saying get in their son. The stock market is going stronlgy and with affordability so low I can't see why property is about to take off (or has taken off?). If it was about to go crazy I would jump in but at this stage it is just hard to envisage

Dear All

I invested into IP property around 1990 and 2000 and many of my property degree qualified work colleagues said I was an idiot! They were all investing in a thing called the tech boom and going to retire rich! By 2003 when I was selling out of IP they were getting in and again telling me I was silly to get out.

My logic then as it is now, was to get in early and to get out before the end and not to be greedy. To me the share market is the same now as the property market was in 2003, overpriced, full of speculation (overseas equity), all good times, no bad news.

Property is not about to go crazy but it is about to go, IMO.

You could wait. The last East Coast boom made most of the growth from 2000 to 2003 yet started to climb from about 1996 (Sydney experience).

But I believe we are presently back at 1996.

In the end it is supply and demand sparked by some local influence linked to a macro-economic factor. I.e. WA boom.

In reply to Winston Wolfe comments:

History tells us the reasons for booms do not repeat the experiences of before. 88 to 91 was different to 2000 to 2003. Back in 1995's after 1991 boom almost all "experts" said property will NEVER BOOM whilst inflation is low. Except I know Jan Somers said it could (second book on PI) and now after 2001 to 2003 you would be very hard pressed to find anyone claim inflation is essential to a property boom.

We don't yet know what will spark the say 2010 boom. It may be green design requirements (solar, water infrastructure, neutral impact, carbon offset) raising the cost of new homes by 50%? As a result existing homes exempt from these costs rise accordingly.

No one can predict the future.

What I do know in relation to costs of living and hence affordability is this….. We are all making more $$ than ever and when other costs such as cars, TV, etc.. are going down at 20% per annum plus we can afford to spend more $$ on houses.

To illustrate this point back on 1987 at 19 I bought a Microwave. I like to cook so I bought one of the best on the market. Panasonic 600W puch button for $599. I was earning before tax $185 a week so that cost me about 3.5 weeks wages. Almost a month.

Last week Aldi had a stainles steel 900W microwave, with a 1000W griller and 1200W covenction function built in, bigger than mine, for sale. In 1987 dollars that microwave would be costing me a months wages so at least $4000 dollars. But in 2007 it is priced at $119.

Cars are the same. Except young people today at age 19 are not earning a measly $185 a week on starting their career but are $600 to $700 a week. A days income for a microwave. How many $$ are spare for the home now?

Peter 14.7

 

[pski]

In light of the booming market in Melbourne anyone care to predict a selling price for this place?
http://www.domain.com.au/Public/PropertyDetails.aspx?adid=2006406908

 

[Kennethkohsg]

ive seen 20% gain in some suburbs in the last 5 months and i view lots of properties, while some suburbs are flat..
pieman

&&&&&&&&&&&&&&&&&

Dear Pieman,

1, Is the 20% gains in these suburbs supported strong market fundamentals or due to a play of market sentiments per se, in this case?

2. Looking forward to learning from you further, please.

3. Thank you

regards,
Kenneth KOH

 

[NOT 2 L8]

In light of the booming market in Melbourne anyone care to predict a selling price for this place?
http://www.domain.com.au/Public/PropertyDetails.aspx?adid=2006406908

What would it rent for after you pay whatever it sells for?

Cheers Chrisv