property buyers' newsletter

Welcome to our September 2006 Melbourne Property Buyers' Newsletter.

Topics Covered

The Market
A dozen quick buying points
Some of what we have bought in the last 4 weeks
Client Comments
 

The Market

Following up on our August Newsletter, last month we said we would report back to you fairly quickly on what is happening in the market. Have interest rates had any effect?

Overall in the inner city good quality markets ($400k - $4M) we have seen no drop off effect whatsoever due to the interest rates. However, at the sub $400K level we have seen a substantial increase in stock on the market, and this may be as a direct result of the interest rate rise or it may simply be the vagaries of the market.

Stock Levels are incredibly tight in some inner areas (e.g. Bayside). We have had little joy in finding good homes in the $1M+ market in Brighton, Sandringham and Hampton. 

The inner eastern suburbs of Hawthorn, Kew and Malvern definitely have higher stock levels however this has seen no diminishing in the prices paid; in fact if anything we think Hawthorn is probably the hottest suburb in Melbourne as we write.

So what does this mean for the future - who knows? All we can do is report to you that if you buy the right home at the right price at the right time for the LONG TERM then things seem to take care of themselves.
 

A dozen quick buying points

1. Many people think buying a home is about the money - it is not. It is about clearly understanding YOUR NEEDS.
2. Many people think cashflow is the major issue in buying a good investment property - it is an issue but the cornerstone issue is capital growth.
3. Many people think buying a home well is a bit hit and miss. It is not - those that buy well
        Step 1: Understand YOUR NEEDS.
        Step 2: RESEARCH all options.
        Step 3: ASSESS correctly as to value and quality.
        Step 4: NEGOTIATE to buy well, not miss.
4. Many first time investors think buying an investment property means buying something unusual. This is rubbish - it's all about demand and supply for future growth. If you wouldn't want to live in the house, your spouse wouldn't want to live there and your mother doesn't like it - DON'T BUY IT. Chances are unless you are aliens; nobody else will like it in the future either.
5. Do all properties go up? - NO. Do all inner city properties go up? - NO. Why is that? In the case of the Docklands, it's not demand - it is supply. Growth is a demand and supply issue - not just demand. That's why we love inner city family homes. They aren't making more land and our population is increasing at the world average. Increasing demand and restricted supply. 
6. Can you avoid buying DUDs? Yes by focusing on ALL the key characteristics. 
   AREA. POSITION. LAND. BUILDING. Not just 2 of the 4. 
7. Is it good to buy in hotspots? Maybe, but maybe not. Refer above point. 
8. Is property buying high or low risk? For mum and dad in the right area and the right home over 20 years it's low risk. For short term developers and investors it's high risk - very high risk in some cases. 
9. Are agents ratbags? A few, but so are some buyers and advocates; but most high end agents are very, very good at their job. Trouble is they are not working for you the buyer. They are working for the seller. If you think a few TV tricks, or some agent abuse will get the property in a tough negotiation you are naïve.
10. Many people can putt like Tiger Woods occasionally, but can they do it when they absolutely have to win and there are no second chances? Auctions and Agents can be about Anxiety, Stress, Fear of Loss and the Unknown. How many buyers snatch defeat from the jaws of victory simply because they do not recognize the need for expert unemotional advice at critical times? There is a big difference between doing what you know and knowing what to do. Yes this is another cliché, but can you perform under pressure when you and your family are pulling at the heartstrings? Can you make the right decisions? 
11. Most good negotiators know this - sometimes you can offer too much and miss the deal - i.e. if you had offered less you would have bought it. 
12. A good home, well bought that meets your needs and is held for 10 years plus will almost always perform better than 2 or 3 buy and sells during the same time, no matter how good a negotiator you are. In and out of the market plus transaction costs are very significant negative issues. Know what you want for now and for the next 10 years BEFORE you buy.
     

Some of what we have bought in the last 4 weeks

• Kew - Rowland St. Family home in a great position with north facing rear. (See Picture Below)
   
  
   
• Malvern - Embling Road. Architectural townhouse, lovely position with lift. (See Picture Below)
   
   
   
• Malvern - Euston St. Edwardian with off street parking. (See Picture Below)
   
  
   
• Seaford - Admans Ave. Good investment property with work to do. (See Picture Below)
   
  
   
• Seaford - Park St. Investment property - good renter and a good location.
   
• Somers - Tasman Rd. We were a bit nervous about this at first but with tennis court, solid house, low maintenance and some water views for well under $600,000 in our opinion this was good buying for what our client wanted.
   
• Preston - Breffna St. New 3 Bedroom, 2 bathroom townhouse and good location. (See Picture Below)
  
  
   
• Hampton - Willis St. Townhouse - well built, great floor plan & north rear. (See Picture Below)
   
  
   
• Ashburton - Victory Blvd. Good solid family home in an excellent location.
   
• Hawthorn East - Caroline St. We bought this as an investment property - a lot of interest with six bidders in total; two bidders with us over $700K. Yes it was south facing but its floor plan is as good as it gets for Victorians + off street parking, great location, and only 7 years old.  (See Picture Below)
   
  
   
• Seaford - Park St. Another very solid investment property.
   
• Bentleigh - Bendigo Avenue. Location was the key to this place - good block, home needs work.
   

Client Comments

Dear Ian

The dust has settled and we are now waiting out the settlement time before getting into Bonnyview Street! I'm making use of your Aftersale information in preparation for moving - thanks for this - another useful product from James Buyer Advocates.

Alan and I have reflected on the 'journey' that we undertook buying our first family home and we both agree that your input along the way proved to be extremely valuable. We have learnt much about real estate from you and found your manner and knowledge to be very enlightening and helpful. There is no doubt in our minds that your input reduced our stress and worry significantly - after all, once wed found the property (and you had okayed it), all we had to do was decide how much to pay (taking into consideration your valuation of course) and let you go to work.

we know you worked hard and fast with the negotiations, and in the end it was quite painless for us - we kept on with our usual tasks while you kept us in the loop on the phone about the progression of the deal. Again, there is no doubt in our minds that your input made a significant difference to our ability to secure Bonnyview Street. I especially appreciated you accompanying me throughout the contract and cheque signing!

Given our family circumstances, we didn't ever get to have the many café discussions that your information mentions - I look forward to being able to do that next time! Never-the-less, your flexibility to fit in around our schedules was great and much appreciated.

Best wishes
Colleen Young

 
Happy property hunting and thanks for reading.

Kind Regards

Mal, Ian, Sam, Antony, Chris, Craig, Janet and the team.

Contact Us

If we can help you with any buying advocacy matter, or one of your clients/friends is in need of independent, qualified residential property advice, then please call us on 03 9591 0199 or email mal@jpp.com.au or ian@jpp.com.au. Our website is www.jpp.com.au.

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