Not a buyers market!

[Peter 14.7]

I think the slump will be alot less visible in the lower end priced properties because they appeal to first home buyers etc. I personally know of 3 families trying to sell their PPOR in Illawong, Bonnet Bay and Barden Ridge. (Middle class Sydney suburbs, 25km from CBD) All houses were/are worth around 700-750K in 2003-2004. But none have had offers over 620K, and the house in Illawong sold for 570K, it is a 4 bedroom house, 3 bathroom, pool, quiet street etc.. Absolute steal!

These are the types of places where you will see a difference and can submit low ball offers etc..

A sign how much 2003 was out of kilter.

Peter 147

 

[obiwan]

Good point FrankGrimes, I think what you have said makes sense to me.

I am looking at the lower end of the market and not having alot of luck finding motivated vendor, everything I have been looking at have been around the advertised price. (the search continues though)

 

[silas]

Hi I am not familliar with the NSW market but we bought two properties in the lower end last year well below asking price. One in Melbourne suburb asking price $265,000 bought $233,000. Regional Asking price $135,000. Purchased $93,000. Both needed renovation which probably made them harder to sell. BOth I would consider to be bought below market value although having said that once we have bought them that becomes the market value until someone else buys them for a higher price.

Silas

 

[lizzie]

A sign how much 2003 was out of kilter.

Peter 147

depends what you want it "out of kilter" for ... we had our ppor revalued early 2004 to increase loc and were very pleasantly surprised at the valuation. needless to say it wouldn't sell for that much now but as we have no intention of selling and the loc will be cleared when our latest project is finished (ready for the next one) we're more than happy.

 

[WBG Redcliffe]

Great post, As a newbe to investing in property this is the sort of site that gives more than recieves.

tks WBG

 

[ArJay]

What my point is that I found at the entry level of the market the competition is still relatively fierce because it IS affordable.

My understanding of where the buyers market is in Brisbane is in the $450K - $800 price range in middle ring suburbs.

IMO this is spot on the money....and as others have stated the bargains on a whole seem to be in the middle to upper range of the market.

At the moment I think we're going to see (actually are seeing already) is a real change in the growth areas within our respective markets.

I can only comment that in Adelaide what I think is happening is similar to other capital cities in that the growth is now occurring in the "entry" suburbs. With the interest rates remaining low there are still buyers out there BUT they've got restricted budgets. I've a number of friends in this boat ATM....

The growth here (correct me if I'm wrong) seems to be in the suburbs still within reach of the CBD but 5 years or so ago were quite undesirable places to own/live in. Perhaps a bit rough around the edges but still fulfilling the needs of couples and small families as far as facilities, transport, etc....

As well, we've seen a micro boom in the Adelaide Hills over the last 12months prob due to the same reasons.

It's fundemental that people will buy what they can afford therefore pushing up demand for the cheaper end of the market. If/until interest rates go up I think we'll continue to see growth in these little undesirables, especially as they gentrify with all the new young blood coming into the area.

Following on logically from these assumptions it looks as though it's going to be more and more difficult to pick up a bargain in the lower end of the market. IMO I think emalily and others are spot on in saying that it IS a buyers market if ur looking in the price ranges lacking the demand. Only common sense I guess.

Anyway my 2c worth of banter....
ArJay

 

[beeroll]

It's fundemental that people will buy what they can afford therefore pushing up demand for the cheaper end of the market. If/until interest rates go up I think we'll continue to see growth in these little undesirables, especially as they gentrify with all the new young blood coming into the area.

Following on logically from these assumptions it looks as though it's going to be more and more difficult to pick up a bargain in the lower end of the market. IMO I think emalily and others are spot on in saying that it IS a buyers market if ur looking in the price ranges lacking the demand.

Might be happening in Adelaide, but here in inner Sydney, the land tax seems to be squeezing investors out in the affordable range - well, affordable for inner Sydney. That means apartments and houses just over the land tax threshhold of $350K (or thereabouts). So I am seeing huge discounts on 2 br houses in the inner west that were about $500K a couple of months ago, now showing up for closer to $400K. One place in Lewisham has dropped $50K from $460K to $410K in about three weeks.

The yield still sucks, but less.

You wonder whether a whole lot of people woke up on New Year's Day and thought to themselves "Crap! I still haven't sold my house..."

Ben.

 

[lizzie]

still not a buyers market here in newcastle - any good deal that comes up seems to attract a flock of investors still squabbling over it, and paying near asking price ... i refused to join in. not as many investors as there were, but still some cashed up boomers and ex-builders.

i shall keep searching - they will drop off eventually.

 

[arriety]

I still think it's a buyer's market but only because it's not a 'seller's' market. I know lots of people who are having a hard time selling and have had to reduce their prices $50K or more. If you have a look at houseprices.com.au and find prices of properties sold in late Nov/Dec sometimes there is a link to the Agents homepage and you can see what the property was originally listed at - at the upper end, there is a big drop between listing and selling price.

There are still alot of investors out there who are snatching up the bargains at the lower end, so you have to find the bargains before they come on the market. We've just bought - I don't think it was a great bargain but reasonable. The vendor had already reduced and it had been on the market a long time. I liked it because I knew I could easily rent it so grabbed the property. Settlement is tomorrow and we already have a good tenant.

 

[sonic]

Hey great post Grubar.

I'm in a similar situation in regard to finance and the kind of properties I look for. I'm located in Sydney so mainly look for studios in the Potts point area you can get one under $200K but similar experiences I lowball though and haven't had any real chances of closing. Had a recent thought though, I worked out after tax service a unit (after inclusive of strata etc) sometimes a house would cost the same or a more expensive unit in another suburb. Do you think its better to buy the house or more expensive unit rather than the units we are currently considering in the $200K below pricemark because the servicing cost is the same but you get higher leverage.

Also I'll be travelling down to Melbourne in the near future does anyone have an idea of which suburbs to consider in Melb for $200K below 1 bedroom unit entry thats close the city? Thanks in advance.

Tim

 

[grubar30]

His trick is to get the agents on side and to ask "why are they selling".

How does that get them on side?

 

[Peter 14.7]

Hey great post Grubar.

Also I'll be travelling down to Melbourne in the near future does anyone have an idea of which suburbs to consider in Melb for $200K below 1 bedroom unit entry thats close the city? Thanks in advance.

Tim

Frankston.

I spent a week there as my birth mum is there and homes can be bought cheap with development potential.

It has the fundamentals:

Railway Station
Beach
New Marina to be Built
Council Upgraded Foreshore
Brand New Mega Shopping Centre
Freeway Access
Uni and TAFE

Rentals are not huge but where is?

Stigma of being low end and that true but it has the beach and around it is some big money areas. Baysode land is only getting less.

Development Potential is there. Check it out.

Peter 147

 

[geoffw]

Frankston.

There's been a lot about Frankston- especially the good and bad areas. It's worth a search.

 

[Davidr]

His trick is to get the agents on side and to ask "why are they selling".

How does that get them on side?

I think the inference was:

The trick is to get the agents onside, and once they are onside, you can ask them "Why are they selling?". Because you have them onside, they might give you a closer to accurate response

Cheers,
David

 

[grubar30]

I think the inference was:

The trick is to get the agents onside, and once they are onside, you can ask them "Why are they selling?". Because you have them onside, they might give you a closer to accurate response

Cheers,
David

Gotchya....

 

[Peter 14.7]

I think the inference was:

The trick is to get the agents onside, and once they are onside, you can ask them "Why are they selling?". Because you have them onside, they might give you a closer to accurate response

Cheers,
David

Correct.

It is not against the law to divulge why they are selling.

Certain answers indicate how serious they are.

Serious is:

• Divorce
• Death
• Sick of IP

The last three props I bought had the follwing reasons:

1. Moving to Canberra and wife Pregnant was our PPPOR. Fully renovated in 1996. Paid around $10k less than they wanted the day before Auction due to risk of Auction failure in 1996. Emotional Purchase.
   
2. Husband injured and taking early retirement so no NG this was an IP. 1999 Auction got it for fair price in rising market and sold for $240k gross profit in 2003.
   
3. Selling up to get more space for growing family, another IP. Asking $112 got it for $106k in rising market again 1999 now worth $180k. Same tenent since buying.

Ironicall I am about to sell the PPOR above and the reason:

Moving to Victoria with 4 month Baby.

In the case of my friend the owner wanted out to go elsewhere having just had a shocker tenant. Needed works but only cost $5k in the end. Paid $124k and renting for $180 a week.

If the agents says to me no reason or a rubbush reason such as free up cashflow I am always more cautious.

Peter 147