Weekly Update (Melbourne)

Hi guys, short and sweet update this week.

Had a fantastic weekend of auctions, saw a villa unit in Armadale sell for $2.35mil. Went to 10 properties on Saturday the best was a $7.8mil house in Toorak and another unit in Hopetoun Road, Toorak.

$454.53mil worth of real estate transacted last week; a decrease of -$29.03mil from the week prior. Results from the 466 auctions equated to $214.34mil worth of property with the clearance rate now holding on trend at 61%. This weeks volume would suggest that the Spring selling season has started off more slowly than usual but expectations are that the bulk of properties will be listed towards the end of October. More stock will mean more choice for buyer's and in usual fashion Spring will be a positive time for the people in the market.

MPTV Market Wrap:
http://vimeo.com/49108787

This week we would like to take the opportunity to invite you to our free seminar "How to buy property like a professional!".



The event is at The Point, Albert Park from 6pm on Tuesday 2nd, October. Our seminar is structured as an interactive, questions and answers panel. If you have any questions about buying property that you'd like to ask please come along and do so!


RSVP online.
See you there!
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Market Snapshot & Commentary
Monday 17th September 2012

Total Auctions: 619 Clearance Rate: 60%

This Week at Infolio: $505.9mil worth of real estate transacted last week; a significant jump in volume by $77.25mil from the week prior. Results from the 619 auctions equated to $289.58mil worth of property with the clearance rate holding trend at 60%. This is good news for the overall market. As more property is being listed for sale during spring, more buyers are being active, meeting the increased supply with their demand.


MPTV Market Wrap

Last week, Westpac-MI's Consumer Confidence Index for September was released. The report shows improvements in Australia's perception of the economy.

An interesting fact therein is that currently 63.5% of Australians are being risk adverse, choosing to pay down their debt via savings, low risk investments and bank deposits. During the GFC (2008), at the height of risk aversion, 64.2% of people were choosing to "pay down debt.". Even though Australia is in a better predicament with low inflation, low unemployment and low interest rates, people are stuck in a 'cautiously pessimistic' phase. This could be due to current media coverage; a major factor in shaping how people assess their financial situations.

Property investors aware of Australia's underpinned economy are going against the herd by taking advantage of the buyer's market. In Caulfield, for example, there is a high amount of contrarian investors by nature. The Jewish community makes up 45.6% of the population here (source: ABS). Due to this contrarian investing tradition Caulfield has seen units in the area grow by an excellent 7.4% over the last 12 months (source: APM). Similar results can also be found in other pockets giving savvy investors plenty of opportunity.


What to look for when buying.

On Saturday infolio acted as a Vendor's Advocate for a property that went to Auction in Blackburn South. Despite the vendor wanting to let the property be sold under the hammer, we advised them to hold out for a little bit more. To the vendor's credit they took on the advice and we entered post auction negotiations and successfully achieved a better result.

Also we secured another property in Blackburn south that we initially found off-market. The vendor wanted $650,000 but we secured it for $610,000.
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Sources: Sales data (REIV), Residex Blog, RealEstateView, RealEstate.com.au, Westpac-MI
 
A bit late, forgot to share with somersoft - here is my weekly Melbourne update.

Market Snapshot & Commentary
Monday 29th October 2012
________________________________________
Total Auctions: 1,058 Clearance Rate: 66%
________________________________________

This Week in the Market: $826.74mil worth of real estate transacted last week, a significant increase of $207.16mil from the period before. Results from the 1,058 auctions equate to $580.06mil worth of property being sold; the largest amount in any weekend since 2010. Last weekend was a very important test of demand for Melbourne's market. The clearance rate held above trend at 66% which is a very healthy result.

This Week in Finance: Not the most eventful week however with news that Australia is forecast to reach a $1bil+ surplus in 2012-2013 and a better than expected lift in consumer confidence (CPI quarterly increases by 1.4%) there is now only a 50% chance that the RBA will reduce interest rates this month as opposed to the 80% chance that was estimated previously.

Experience This Week: After assisting my client to obtain a planning permit on this site for 11 units, on Saturday I acted as vendor advocates for the sale of Terrara Road, Vermont South. A sizeable crowd turned out to see this property be auctioned and bidding quickly reached $1.9mil. The competition wasn't able to reach a higher result than $2mil, so infolio entered negotiations with the highest bidder. Our client was very happy with the end result that we managed to secure of $2.25mil!

15059265_800x.jpg

Terrara Road, Vermont South.

Tips when negotiating: Be clear on what you value see in a property and be confident that your price is in line with market value. In the above instance, infolio knew that $2.25mil was a reasonable ask so we stuck to our guns and waited for the buyer to come up. Being confident with your price and being able to back it up with research or comparable sales is key. The bottom line; when negotiating be sure to have done your homework.
 
Jake Milne said:
Good point, I guess it depends on which side you're standing.

I'm sure exporters and manufacturers would be in favor of a weaker AUD$ (they prefer around USD$0.65) so I understand where you're coming from.

A strong dollar for us though has many benefits inclusive of importing and low inflation; it's a topic that'd probably deserve its own thread to be fair.
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How is importing good, incrreasing trade deficit,. sending money and jobs overseas . no jobs no pay, no rent, no rising house prices and no inflation to pay of those negative geared houses you naively advocate
 
buster said:
How is importing good, incrreasing trade deficit,. sending money and jobs overseas . no jobs no pay, no rent, no rising house prices and no inflation to pay of those negative geared houses you naively advocate
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Importing is bad for quantity manufacturing and basic manufacturing.
Importing is good for importers of components for higher tech or higher quality processes.

Australia needs to continue to innovate and explore high tech options. We cannot compete with basic manufacturing, even if the dollar did drop to 65c.

It's not the dollar that's the problem, it's the mindset of many manufacturers who are making nuts and bolts and whinging that they can't sell them any more "because of China".
 
Jake Milne said:
Importing is bad for quantity manufacturing and basic manufacturing.
Importing is good for importers of components for higher tech or higher quality processes.

Australia needs to continue to innovate and explore high tech options. We cannot compete with basic manufacturing, even if the dollar did drop to 65c.

It's not the dollar that's the problem, it's the mindset of many manufacturers who are making nuts and bolts and whinging that they can't sell them any more "because of China".
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How can increased importing be good for the property market though?
 
Domma35 said:
How can increased importing be good for the property market though?
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A high AUD places downward pressure on inflation meaning that your ROI vs. inflation is increased.

A high AUD helps contain interest rates meaning better yields and better borrowing capacities for investors.

A high AUD attracts foreign investment as they see our economy providing better returns than comparable Western Economies. On the other hand a high AUD might price lower tier investors out of our economy.

A high AUD with low inflation means that we're not printing money which lowers the risk of an asset bubble, making property safer than it is in other countries.

A high AUD means construction can import some goods at lower costs. The construction sector can also source materials locally for less as margins for exporting are squeezed.
 
Here's the report from Monday.

Market Snapshot & Commentary
Monday 5th November 2012

________________________________________
Total Auctions: 163 Clearance Rate: 62%
________________________________________

This Week in the Market: $329.47mil worth of real estate transacted last week, a decline of $497.27mil from the week prior which was due to the Spring Racing Carnival. Results from the 163 auctions equated to $59.45mil worth of property being sold. The clearance rate held above trend at 62% however this is not an accurate indicator because of the low volume.


This Week in Finance: Good news as housing approvals for the September quarter have continued in an upward trend across the nation. This latest result shows that the recent RBA interest cuts have helped support moderate growth in this sector. The RP Data/Rismark housing price index was released for October which showed a slight, 1% decline for Capital cities over the month however, statitions now believed that most markets have bottomed out and are looking to recover.

This Week at Infolio: We had the pleasure of helping one of our clients purchase 2a Summerhill Ave in Lorne. We negotiated a substantial discount, managing to secure the property $100,000 below the asking price.

Tips when negotiating: Our method with the above purchase was to hold firm or walk away. After our due dilligence we gave our price assuring the agent if they did not come down and meet us at our amount there would be no deal. Be confident with your price if you believe it's fair value. If you miss the deal it's okay as there will be others.
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This weeks update: http://us5.campaign-archive1.com/?u=b5d89e3839de31c5504ba7626&id=c87afafe0d&e=[UNIQID]



Snapshot
Market Snapshot & Commentary
Monday 25nd March 2013

Total Auctions: 1106 Clearance Rate: 68%
This Week in the Market: $916mil worth of real estate transacted last week; the biggest amount of volume we've seen for two years. Results from the 1106 auctions equate to $603.15mil worth of property being sold. The clearance rate was 68% which is 9% higher than the same period last year. Volume increased last week and demand has continued to meet the increased selling activity. This approaching weekend will be quiet as many agents take time off for the Easter break.


MPTV's Market Wrap

This Week in Finance: This week the RBA minutes for the March meeting were released along with Westpac's survey of industrial trends. The RBA reports that there has been growth in consumption; exports are strengthening; inflation is on target; and that there is promising signs in residential property development. With these developments the RBA is now waiting to see what happens before making and further cuts to the official cash rate but they do have the scope to reduce if needed.

This Week at Infolio: Unless you've had your head in the sand, you would have noticed that the property market is now on the move. Interest rates are at all time lows, clearance rates now indicate a selling market and prices are trending upwards again. Infolio has been extremely busy during this period as savvy investors are getting in on the upswing.

Recently we've purchased:
6/2a Hertford St, St Kilda East @ $645,000
7/2a Hertford St, St Kilda East @ $592,000
35 Hornby St, Windsor @ $880,000
3/176 Daley St, Glenroy @ 346,500
2/17 Repton Rd, Malvern East @ $475,000
128 Brighton St, Richmond @ $1,080,000
5/117 Tennyson St, Elwood @ $468,000
1/245 Nicholson Street, Seddon @ $373,000
10-11 Parkhaven Ct, Healesville @ $651,000
86 Alma St, Malvern East @ $842,000

The best way to find out if you've seen some genuine increments in your portfolio's or home's value is to talk to the team at infolio. Contact us for your review and accompanied Residex reports.
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