Dear reader,

We thought it appropriate to put out a note now, rather than wait till our next newsletter.

The upper end housing market is moving in interesting times.

Market Update Summary • Off market purchases are increasing. • Number of pass-ins are increasing. • Number of buyers per auction are decreasing. • Clearance rates are decreasing. • Runaway unexpected results are decreasing. • Fringe areas are being hit harder than "blue chip". eg. Sandringham is being hit harder than Brighton and Balwyn harder than Hawthorn. • Pre Auction successes are increasing. • Some (not all) quality homes are cheaper now than they were 4 months ago. And lesser quality homes are definitely cheaper (but who wants them anyway)? •You have a good chance of getting a better location and better home for the same Summer 2007 money if you do the right research, have a plan and a bit of luck.

This means not all the 2007 BUYING rules apply to 2008.

You need multiple strategies for a wide variety of situations. Your targeted property might still be hotly contested in which case you still need more than the next buyer to buy. However it may not be and in this case you need strategies that work and the resources and experience to make them work. You need to consider alternatives if you have unproven competition.

It's easy to offer up (and in many cases it was necessary last year to secure good properties) “ but how do you offer down if the opportunity presents itself  - you can do this where the risk v reward scenario is satisfactory to you.

Some 2007 rules still apply

Buy quality only - it's your best protection in a softening market. While the market may turnaround quickly, indicators are that it is tightening. If you're not clear on what quality is then let's talk. You need to have a strong will or hire somebody who does when it comes to negotiation. Agents (who want to stay in business) are not going to rollover on the quality properties without a fight. But they will do so when market and seller dictates they must.

Granted blind, unprepared aggression has a better chance of working this year (to date) than last year. However, there are better, more successful ways of achieving a positive result. Quality is still not given away and buying rubbish is not a long term satisfactory alternative. Pre Auction offers still make a lot of sense depending on your desired outcomes and circumstances.

None of the above is to imply the market is in freefall. It's not. Clearance rates are still at reasonable levels.  It's just that the market has spoken. Things are softening (of course there are always exceptions).

One final comment on the market - prices are easing but good long term outcomes don't come from buying a price they come from buying a quality property. We are not advising missing out on quality because you did have some reasonable competition (its possibly an even better guide now than last year to quality). What we are advocating is make sure the competition is proven, because price does matter at some point. Long term the Inner Melbourne Market has the fundamentals (strong migration, stable existing population, improving wealth) and these demand and supply growth fundamentals mean property is only going up long term as it has for hundreds of years. Short term however these slightly harder times present some opportunities; although please also in previous harder times much of the higher quality avoided the traditional markets eg off market or in fact did not even come onto any market (in part an explanation for big Median price drops in the inner suburbs).  So if the position and property is right for you we are not advocating inaction or stupid offers just strategy, caution and thought.

Buyer Advocacy

Our workload has increased significantly this year in the $1m to $5m range as more clients see value in the services we provide and we have the qualified people to service you.

At the time of this update Peter and Adam will have all but completed their full real estate license, we are moving towards opening our Toorak and Hawthorn offices before the end of the year and Melissa Ryan (previously 10 years in sales at Hocking Stuart) is settling in well with us and providing new and valuable insights and strategies.

Think about using people who have been through downturn markets previously and know how to find and negotiate.

 If you or any of your clients or friends would like a confidential one on one in person or on the phone discussion about what is happening in Inner Melbourne Residential please contact us for an appointment.

Contact Us

If we can help you with any buying advocacy matter, or one of your clients/friends is in need of independent, qualified property advice, then please call Peter, Adam, Melissa or Mal on 03 9591 0199 at our Head Office: 36 Wilson St Brighton, or email enquiry@mjba.com.au Our website is www.mjba.com.au.