I find it harder and harder to believe what I read in the Melbourne associated press, regarding what is happening within the current residential real estate market.
There seems to be over the last 4-6 weeks an upward dialogue to talk to the market up, to as usual create this market sense of a “boom” market, get in or you are going to miss out. ‘First home buyers’ can’t buy property because the investor market is buying anything and everything available, “the apartment market is booming”, get in as prices are moving in an upward trend.
As one of Melbourne’s premier property valuation and advisory entities, and also as one of Melbourne’s leading buyers agents/advocates, I am here to tell you that this immediate frenzy is really just a media hype.
Obviously, we are in a better mindset than two months ago. Lets face it; simple reasoning would suggest that a new federal government and interest rates at a 50 year low would in some way, create a more stable and reflective market. But no where in the small print is there a “boom clause”.
There are a lot of industry bodies, research houses and the like shouting to the market place that a boom is imminent and the time is right as prices have moved and are moving upward.
Short memories. What they have forgotten to tell the general public is that from January 2013 to July 2013, residential real estate in Melbourne dropped across the board. Don’t be shocked – it’s just that most property professionals find it hard to give their clients seemingly bad news. In fact, the variances are between 5% – 20%, in a downward trend.
If you have read this before in relation to percentages, well done you are an informed participant. What I personally don’t get after 25 years in the industry is when a so called expert(s) make comments such as from January 2013 to now, the market has been demand driven and a good property market with values steadily rising throughout the year. I would love to mention the party’s name, but it’s better left unsaid and by the way, I am not taking his comment out of context.
Or, when parties continually place wood on the fire by stating that clearance rates are 70% – 80%. What is that really telling us? Other than what we already know, and when I, as a purchaser, am trying to buy a house in Elsternwick or Beaumaris, what does this actually tell me?
Unfortunately, in the world we live in, information and especially property information and data is readily available, and there is so much of it. From ‘Google’ free search, to REIV and RP Data, at a cost.
The real key though is how you or your professional use all that data.Simply, there are very, very few that really know how to analyse, interpret and make necessary and factual recommendations.
As both valuers undertaking property valuations and buyer agents, we see the end results constantly, we hear the unsatisfied property participant and we cringe at most of the usual suspects.
To illustrate a live example of what goes on in the real estate market, we were recently requested to undertake a property valuation and provide advisory and recommendation in relation to a residential property sub $4.0m within the bayside belt.
We were provided with our formal instructions and inspected the property. Throughout the inspection, the major discussion between the agent and the valuer was who is your buyer and a price which based on what we initially analysed was 20% above current market parity. In short, there were no sales to support the agent’s expectations.
Easy, the agent sent us 7-8 properties in an adjoining nearby precinct, and in general some 20% better than the subject property street locality and suburban address. The question begs; if we were not involved, I guess the purchaser may have thought these sales were directly comparable but in fact, they had very little relevance.
Through obtaining professional advice from a qualified and professional property consultant, our clients purchased this property.
– They knew the true current market value range. – They had an idea of the vendor’s reserve. – They knew that few parties were participating. – They knew that they had someone providing a strategy. – They had a professional that highlighted the property’s warts and all.In short, whatever the client paid on our fees, I can assure you was saved in the acquisition price at lease tenfold.
If you are in an owner occupier/residential in particular, forget all the fads, forget the DYI.
Obtain a suitably qualified professional who knows what they are doing due to :- – Many years of experience. – Professional qualifications. – Active in the marketplace. – Network of similar sources of data. – Independence. – Not fee driven. – Knows how to make recommendations.Ring or contact us to know more about our services
