The games agents play

As stock in the lower end of the market is being snapped up by first home buyers because of the Australian Governments first home buyers grant of up to $24,000, many agents are struggling to find stock to replace sold homes. Many agents are experiencing a great amount of activity and would almost wonder what the crisis in the world economy is all about.

The problem when agents get busy and have to find stock to sell, is they start getting back to the tricks they play. Over quoting on the possible sale prices to owners is very common.

In the last week I have seen properties that I am familiar with hit the market priced anywhere from $50,000 to $80,000 above where they should be.

The agents are aware that they are over quoting, but choose to list too high in price, only to spend the next month or two conditioning the seller to think their home is not as good as they thought, so the agent can get them to reduce the price.

This is a very common trick they play. I use to work for one agent in Newcastle that had the motto “Get em on, then get em down”. This basically means get the seller to sign up with you at the high price (a price the agent knows is unrealistic) and then work on the seller to reduce the price time and time again until it reaches the price it should have started at. This is also called “buying the listing”.

I listed a property two weeks ago in a street with at least 10 other homes on the market. All these homes have been on the market for over a month. I listed the property at a realistic price and had it sold within 4 days at a price the seller was very happy with. The price acheived was higher than any other sale in the street has ever acheived, but yet these other agents insist on listing at prices up to $90,000 above any comparable sale acheived.

A very learnered man once told me “you dont have to be smart to work in real estate” and this is very true for most, but what they lack in intellegence, they make up for in cunningness. Some agents are so smooth, there aren’t enough o’s in smooth to describe them. Watch out for the agent with the gold chains, the latest phone and the shiny car, his name is Smooth Sam and he is everywhere.

Dont be fooled by the smooth agent. Get a few agents in and ask them to show you the starting price and the selling price on a few homes they have sold. I am sure some of them will want to avoid showing you.

The games agents play

As stock in the lower end of the market is being snapped up by first home buyers because of the Australian Governments first home buyers grant of up to $24,000, many agents are struggling to find stock to replace sold homes. Many agents are experiencing a great amount of activity and would almost wonder what the crisis in the world economy is all about.

The problem when agents get busy and have to find stock to sell, is they start getting back to the tricks they play. Over quoting on the possible sale prices to owners is very common.

In the last week I have seen properties that I am familiar with hit the market priced anywhere from $50,000 to $80,000 above where they should be.

The agents are aware that they are over quoting, but choose to list too high in price, only to spend the next month or two conditioning the seller to think their home is not as good as they thought, so the agent can get them to reduce the price.

This is a very common trick they play. I use to work for one agent in Newcastle that had the motto “Get em on, then get em down”. This basically means get the seller to sign up with you at the high price (a price the agent knows is unrealistic) and then work on the seller to reduce the price time and time again until it reaches the price it should have started at. This is also called “buying the listing”.

I listed a property two weeks ago in a street with at least 10 other homes on the market. All these homes have been on the market for over a month. I listed the property at a realistic price and had it sold within 4 days at a price the seller was very happy with. The price acheived was higher than any other sale in the street has ever acheived, but yet these other agents insist on listing at prices up to $90,000 above any comparable sale acheived.

A very learnered man once told me “you dont have to be smart to work in real estate” and this is very true for most, but what they lack in intellegence, they make up for in cunningness. Some agents are so smooth, there aren’t enough o’s in smooth to describe them. Watch out for the agent with the gold chains, the latest phone and the shiny car, his name is Smooth Sam and he is everywhere.

Dont be fooled by the smooth agent. Get a few agents in and ask them to show you the starting price and the selling price on a few homes they have sold. I am sure some of them will want to avoid showing you.

Supply and demand…is it balanced yet?

Across the most recent week the total number of new properties advertised for sale again increased however, they still sit well below 12 month averages.

New property advertisements are taking much longer to rebound this year than they did at the same time last year. By the second week of February 2008 new listings were back to similar levels as that recorded during the first week of December 2007.

Currently, new listings sit at approximately 2,000 listings less than that recorded during the first week of December 2008.Total properties advertised for sale have begun to plateau at a level below the 12 month average.

Similar to new listings, total listings are yet to reach equivalence with total listings numbers prior to the Christmas / New Year period and obviously the fall in new listings is having an impact on total listings.

However, the results highlight that there is no wholesale dumping of stock which is unsurprising given the aggressive interest rate cuts and value falls of 2.6% across the nation through 2008 which have conspired to make property ownership more affordable.

Many who were looking down the barrel of having to sell their property have been spared, as home loan repayments are now easier to service meaning many more can afford the expense.

Locally many agents are still over quoting on price to vendors. I recently went in to a property and the best I could come up with was $385,ooo. I received an alert this morning showing the property listed with another agent for $410,000. Now the agent is going to have to work on the vendor to reduce the price, or the agent is going to have to find a buyer that is so emotionally rapped up in the property, that price doesn’t matter (and the house is not that great).

Well priced properties are selling, but driving around, there seems to be a lot of signs out there, and they are sitting there not sold. surely people are smart enough to see that som eagents are still buying the listings.

For well priced properties (if there are any left) go to www.nobullrealestate.com.au/properties.php

RP Data Property Pulse sourced

Supply and demand…is it balanced yet?

Across the most recent week the total number of new properties advertised for sale again increased however, they still sit well below 12 month averages.

New property advertisements are taking much longer to rebound this year than they did at the same time last year. By the second week of February 2008 new listings were back to similar levels as that recorded during the first week of December 2007.

Currently, new listings sit at approximately 2,000 listings less than that recorded during the first week of December 2008.Total properties advertised for sale have begun to plateau at a level below the 12 month average.

Similar to new listings, total listings are yet to reach equivalence with total listings numbers prior to the Christmas / New Year period and obviously the fall in new listings is having an impact on total listings.

However, the results highlight that there is no wholesale dumping of stock which is unsurprising given the aggressive interest rate cuts and value falls of 2.6% across the nation through 2008 which have conspired to make property ownership more affordable.

Many who were looking down the barrel of having to sell their property have been spared, as home loan repayments are now easier to service meaning many more can afford the expense.

Locally many agents are still over quoting on price to vendors. I recently went in to a property and the best I could come up with was $385,ooo. I received an alert this morning showing the property listed with another agent for $410,000. Now the agent is going to have to work on the vendor to reduce the price, or the agent is going to have to find a buyer that is so emotionally rapped up in the property, that price doesn’t matter (and the house is not that great).

Well priced properties are selling, but driving around, there seems to be a lot of signs out there, and they are sitting there not sold. surely people are smart enough to see that som eagents are still buying the listings.

For well priced properties (if there are any left) go to www.nobullrealestate.com.au/properties.php

RP Data Property Pulse sourced

First home buyers are going nuts

The combined effect of the Federal Government’s First Home Buyer stimulus, historically low interest rates and prime buying conditions, has seen the number of housing loans for first home buyers jump.

The latest housing finance data provides an interesting insight into the Australian residential housing market. The number of finance commitments for residential housing, which includes all significant bank and non-bank lenders, has risen consistently from month to month since the first interest rate cut back in September. The increase in the volume of housing loans suggests the combined effect of the government’s stimulus and falling interest rates, together with market conditions that favour the buyer, are having a positive impact on consumer confidence in the residential real estate market.

On a seasonally adjusted basis, the volume of owner occupier loans jumped to 10.3% over the December quarter. The most dramatic jump in percentage terms has been for new housing where the number of loans is up 32% for the December quarter, suggesting the tripling of the First Home Buyers Grant for newly constructed housing is providing a real boost to the industry.

The lift in market activity has almost exclusively been concentrated in the owner occupier segment of the market. Despite a 2.9% rise over the month of December, the value of investment housing loans actually fell by 3.6% over the December quarter (seasonally adjusted) highlighting that investors are still mostly happy to remain on the property market sidelines.

This is good news for first home buyers, because fewer investors mean less competition. These two segments of the market often compete for the same housing stock due to the low entry price and generally strong rental yields. The prime buying conditions, where there is little competition amongst buyers, a lot of stock to choose from, and plenty of time to make a purchase decision, will probably not last much longer.

The increase in the First Home Buyers Grant expires at the end of the financial year creating an increasing level of urgency. Although there is wide spread speculation the grant time frame will be extended, this is not guaranteed.The most significant statistic is the rise in first home buyer loans. First home buyers now account for just over one quarter of all housing loans, compared to just 17% two years ago and 12.6% back in early 2004.

On a state by state basis, first home buyers represented the largest market in the Northern Territory (27.4%), New South Wales (26.9%) and Western Australia (26.7%).

Most banks are now seeking a loan to value ratio (LVR) of 80%, which means first home buyers will need a deposit of 20%. Based on this assumption and the average loan amounts for first home buyers, we can estimate the average value of a first home buyer dwelling. In Tasmania, where housing prices are the lowest of any state or territory, the average first home buyer will need savings of approximately $46,325 to purchase a home worth around $230,000. In the Australian Capital Territory, where the average first home buyer is taking out a $297,600 loan, they will need a saved deposit of around $74,400 (keep in mind that Canberra is a relatively small first home buyers market).

It is likely the trend of greater first home buyer activity will continue, with anecdotal evidence continuing to indicate higher first home buyer turnouts at open homes and auctions. With more buyers active in this segment it is highly likely we will start to see upwards price pressure in this segment during the first half of 2009.

There could be some stimulas in the public housing sector, with a draft bill in the parliment for allocation of 6.4 Billion dollars towards public housing construction over the next 4 years. This is going to make some properties attractive to development, especially smaller development sites as the housing department is calling for construction of 1 and 2 bedroom homes
More news on this funding is on its way in the next week or two.

On the local seen, first home buyers are snapping up everything under $250,000. Even the cheaper homes that need considerable repairs are being considered by first home buyers. Any one who is sitting on a dump should get in on the market, as the buyers are very keen to get into the market before June 30. SELL SELL SELL

Go to the website http://www.nobullrealestate.com.au/

Some information provided by RP Data

First home buyers are going nuts

The combined effect of the Federal Government’s First Home Buyer stimulus, historically low interest rates and prime buying conditions, has seen the number of housing loans for first home buyers jump.

The latest housing finance data provides an interesting insight into the Australian residential housing market. The number of finance commitments for residential housing, which includes all significant bank and non-bank lenders, has risen consistently from month to month since the first interest rate cut back in September. The increase in the volume of housing loans suggests the combined effect of the government’s stimulus and falling interest rates, together with market conditions that favour the buyer, are having a positive impact on consumer confidence in the residential real estate market.

On a seasonally adjusted basis, the volume of owner occupier loans jumped to 10.3% over the December quarter. The most dramatic jump in percentage terms has been for new housing where the number of loans is up 32% for the December quarter, suggesting the tripling of the First Home Buyers Grant for newly constructed housing is providing a real boost to the industry.

The lift in market activity has almost exclusively been concentrated in the owner occupier segment of the market. Despite a 2.9% rise over the month of December, the value of investment housing loans actually fell by 3.6% over the December quarter (seasonally adjusted) highlighting that investors are still mostly happy to remain on the property market sidelines.

This is good news for first home buyers, because fewer investors mean less competition. These two segments of the market often compete for the same housing stock due to the low entry price and generally strong rental yields. The prime buying conditions, where there is little competition amongst buyers, a lot of stock to choose from, and plenty of time to make a purchase decision, will probably not last much longer.

The increase in the First Home Buyers Grant expires at the end of the financial year creating an increasing level of urgency. Although there is wide spread speculation the grant time frame will be extended, this is not guaranteed.The most significant statistic is the rise in first home buyer loans. First home buyers now account for just over one quarter of all housing loans, compared to just 17% two years ago and 12.6% back in early 2004.

On a state by state basis, first home buyers represented the largest market in the Northern Territory (27.4%), New South Wales (26.9%) and Western Australia (26.7%).

Most banks are now seeking a loan to value ratio (LVR) of 80%, which means first home buyers will need a deposit of 20%. Based on this assumption and the average loan amounts for first home buyers, we can estimate the average value of a first home buyer dwelling. In Tasmania, where housing prices are the lowest of any state or territory, the average first home buyer will need savings of approximately $46,325 to purchase a home worth around $230,000. In the Australian Capital Territory, where the average first home buyer is taking out a $297,600 loan, they will need a saved deposit of around $74,400 (keep in mind that Canberra is a relatively small first home buyers market).

It is likely the trend of greater first home buyer activity will continue, with anecdotal evidence continuing to indicate higher first home buyer turnouts at open homes and auctions. With more buyers active in this segment it is highly likely we will start to see upwards price pressure in this segment during the first half of 2009.

There could be some stimulas in the public housing sector, with a draft bill in the parliment for allocation of 6.4 Billion dollars towards public housing construction over the next 4 years. This is going to make some properties attractive to development, especially smaller development sites as the housing department is calling for construction of 1 and 2 bedroom homes
More news on this funding is on its way in the next week or two.

On the local seen, first home buyers are snapping up everything under $250,000. Even the cheaper homes that need considerable repairs are being considered by first home buyers. Any one who is sitting on a dump should get in on the market, as the buyers are very keen to get into the market before June 30. SELL SELL SELL

Go to the website http://www.nobullrealestate.com.au/

Some information provided by RP Data

First home buyers are going nuts

The combined effect of the Federal Government’s First Home Buyer stimulus, historically low interest rates and prime buying conditions, has seen the number of housing loans for first home buyers jump.

The latest housing finance data provides an interesting insight into the Australian residential housing market. The number of finance commitments for residential housing, which includes all significant bank and non-bank lenders, has risen consistently from month to month since the first interest rate cut back in September. The increase in the volume of housing loans suggests the combined effect of the government’s stimulus and falling interest rates, together with market conditions that favour the buyer, are having a positive impact on consumer confidence in the residential real estate market.

On a seasonally adjusted basis, the volume of owner occupier loans jumped to 10.3% over the December quarter. The most dramatic jump in percentage terms has been for new housing where the number of loans is up 32% for the December quarter, suggesting the tripling of the First Home Buyers Grant for newly constructed housing is providing a real boost to the industry.

The lift in market activity has almost exclusively been concentrated in the owner occupier segment of the market. Despite a 2.9% rise over the month of December, the value of investment housing loans actually fell by 3.6% over the December quarter (seasonally adjusted) highlighting that investors are still mostly happy to remain on the property market sidelines.

This is good news for first home buyers, because fewer investors mean less competition. These two segments of the market often compete for the same housing stock due to the low entry price and generally strong rental yields. The prime buying conditions, where there is little competition amongst buyers, a lot of stock to choose from, and plenty of time to make a purchase decision, will probably not last much longer.

The increase in the First Home Buyers Grant expires at the end of the financial year creating an increasing level of urgency. Although there is wide spread speculation the grant time frame will be extended, this is not guaranteed.The most significant statistic is the rise in first home buyer loans. First home buyers now account for just over one quarter of all housing loans, compared to just 17% two years ago and 12.6% back in early 2004.

On a state by state basis, first home buyers represented the largest market in the Northern Territory (27.4%), New South Wales (26.9%) and Western Australia (26.7%).

Most banks are now seeking a loan to value ratio (LVR) of 80%, which means first home buyers will need a deposit of 20%. Based on this assumption and the average loan amounts for first home buyers, we can estimate the average value of a first home buyer dwelling. In Tasmania, where housing prices are the lowest of any state or territory, the average first home buyer will need savings of approximately $46,325 to purchase a home worth around $230,000. In the Australian Capital Territory, where the average first home buyer is taking out a $297,600 loan, they will need a saved deposit of around $74,400 (keep in mind that Canberra is a relatively small first home buyers market).

It is likely the trend of greater first home buyer activity will continue, with anecdotal evidence continuing to indicate higher first home buyer turnouts at open homes and auctions. With more buyers active in this segment it is highly likely we will start to see upwards price pressure in this segment during the first half of 2009.

There could be some stimulas in the public housing sector, with a draft bill in the parliment for allocation of 6.4 Billion dollars towards public housing construction over the next 4 years. This is going to make some properties attractive to development, especially smaller development sites as the housing department is calling for construction of 1 and 2 bedroom homes
More news on this funding is on its way in the next week or two.

On the local seen, first home buyers are snapping up everything under $250,000. Even the cheaper homes that need considerable repairs are being considered by first home buyers. Any one who is sitting on a dump should get in on the market, as the buyers are very keen to get into the market before June 30. SELL SELL SELL

Go to the website http://www.nobullrealestate.com.au/

 

 

 

some information provided by RP Data

Market activity slowly increasing

Now that we are well into February we are seeing market activity slowly increase. The number of auctions being held is ramping up and the amount of properties advertised for sale are returning to their pre-Christmas period levels.

This week interest rates were slashed to their lowest level since 1964, and by most accounts there will more to come. The latest cuts to the official cash rate will bring the average standard variable rate under to around 5.85%, with all the major banks already announcing they will be passing the complete 100 basis point cut onto consumers.

With interest rates falling, property values showing modest declines, and rental rates growing, the net affect is that investment yields are improving and it is becoming more obvious for many renters that buying is an increasingly attractive option.

For first home buyers, more and more are realising that the current market conditions are stacked in their favour. This segment of the market now represents almost one quarter of all owner occupier housing finance commitments across the nation. With housing affordability now greatly improved due to rate cuts, falling housing values and the boosting of the first home owners grant, we expect the number of first home buyers in the market to continue improving through the first half of the year.

First home buyers are out in droves, but many are very hesitant to make an offer. there is still some uncertainty with job security, and many young buyers are expressing this concern to me.

Now is the time to buy and you can see some well priced properties under $300,00 at http://www.nobullrealestate.com.au/

Some information provided by RP Property Pulse