Vip Consulting - Buyer’s and Vendor’s Advocates
E-Newsletter Issue - 10
“Taking the guesswork and legwork out of buying and selling property!”
Welcome to our VIP Newsletter Spring Edition 2008 November Update
Hi Everyone,
Summer is nearly upon us, and Xmas is not too far behind. With the Global Credit Markets taking a dive, and Recession looming for many countries around the world, everyone seems to be holding their breath waiting for the worst to hit. Whilst we have astute buyers taking advantage of this lull in the property market, they seem to know this is a great time to be picking up some great properties at fantastic prices!
The Reserve bank has just dropped interest rates a further 0.75%, however the banks have chosen to not pass on the full drop as per usual. There are talks of a couple more drops, with predictions of another 1% before Xmas, and a couple more in the new year to stimulate the market.
Our prediction: get in now! Even though the clearance rates at auction are hovering around the 54% mark, we are predicting that the lower end of the market ( below $500,000) is going to take off in the new year. We are seeing more buyers turning up to auctions week by week, and the well located good quality properties are still being snapped up. With $17,000 available for the First Home Buyers, and $21,000 for new properties, with the lower interest rates forecast, we believe many buyers who have been sitting on their hands for months will take the plunge.
So as a Xmas present, let VIP Astute Buyer's Advocates help you secure that great property you have been wishing for- we'll make your property wish come true!
Market Update
By Michael Yardney 05/11/08
Finally...some sanity for the property markets and economy.
The glass is half full...
Let's face it; what we're hearing from the media at the moment is scary stuff - especially for those of us who own property. Each day brings another report, and more often than not, more doom and gloom. The dreaded 'R' word has been uttered repeatedly and some doomsayers are suggesting you should sell up all your properties before the almighty crash arrives here, just like it has in the USA. However other commentators say our current markets present some great opportunities. Some economists are predicting one million unemployed Australians and others are suggesting unemployment will only reach just over half that figure (5%). So is it a good time to buy properties or is it time to sell up everything? I wouldn’t blame you for feeling confused. With all the negative talk going on, it was great to see the Reserve Bank of Australia’s Deputy Governor Ric Battellino recently take the opportunity to put some timely facts on the table about the state of household finances, the economy and Australia’s investment and property markets. The RBA has finally provided some balance in the economic debate, something that has been sadly lacking in recent times. Clearly the views of the more pessimistic commentators have attracted a lot of media attention and frightened many Australians and it’s about time they were challenged by the Reserve Bank. Without playing down the seriousness of the current global financial crisis, Battellino sought to put recent developments like falling share prices and the pressure on household finances in perspective. The Deputy Governor is confident that Australia can sidestep recessions in other parts of the globe and has downplayed fears of lower house prices in Australia. When discussing the differences between the Australian and US housing and mortgage markets, Battellino was quick to point out how the two are poles apart. He explained that there is an under-supply of housing in Australia, a marked contrast to the huge oversupply of empty properties in the USA. The overhang of unsold houses in the US has created downward pressure on house prices as mortgagees, builders and developers have been forced to sell. Clearly this is not occurring in Australia. We have a shortage of housing here which means that there are buyers waiting in the background for better circumstances. They are waiting for things such as lower interest rates or rising incomes and the first homeowners grant to help them enter the property market. This latent underlying demand for housing is a factor that will support our markets. The Deputy Governor explained how the cycle in the Australian housing market, rather than following the US market, is in fact at a more advanced stage; “It is probably leading the US market by three years or so. The Australian housing market was at its hottest in 2003, whereas the US market peaked in 2006.” Battellino also explained the important difference between lending standards in Australia and the USA. Essentially, finance in Australia was given to borrowers who could afford the loans in stark contrast say to (marginal) sub-prime US lending. Here the lending boom was concentrated on existing homeowners who traded up to bigger and better houses and bought investment properties. Many of these were people in their 40’s and 50’s who previously had low levels of debt. At the end of the boom, the home ownership rate in Australia was no different to that at the start; in both cases about 70 per cent. While some commentators are arguing that there is no socially productive purpose served by this increased lending to middle-aged existing homeowners, it did mean that the loans largely went to borrowers who had a strong capacity to service and repay them. As a result, whereas most other countries with housing booms have experienced a strong rise in arrears on housing loans once the boom ended, in Australia the arrears rate today is no higher than it was at the start of the boom in the mid 1990s. And, of course, it is low by international standards. It was an interesting point to note that arrears in Western Sydney have not worsened recently and for the major banks, arrears are very low. The Deputy Governor has even tried to warn investors that they could miss out on above-average returns by being too risk averse. It’s extraordinary that the Reserve Bank has to point out the longer-term benefits of investing. So is it the right time to buy more properties? Even if the market hasn’t bottomed, and it probably hasn’t – remember, you are not buying the “market”. You are buying an individual property. One that you would be happy to hold in your portfolio in the long term and one that was bought sufficiently below market price so that even if the market fell a bit further, you would still have bought well.
Be careful - there are currently many secondary properties on the market, for example on main roads or in poor locations. These properties are just not selling and even though some of these are owned by desperate vendors, stay clear of them. On the other hand, I suspect there will be some outstanding buys available over the next month or so as we get closer to Christmas. Any vendor who has put his property on the market and hasn’t sold it will become more and more nervous as Christmas approaches. I have found that as it gets near to the end of the year, many sellers are ready to “give away” their properties to get the sale over and done with before the Christmas break. Are you ready to exploit these opportunities that will arise?
Some Recent VIP Success Stories…
Congratulations to Damian & Samantha on their recent acquisition in Preston. John from VIP Consulting helped secure their first home without the pressure or stress. Damian & Samantha used our Silver Buyer's Advocacy Service where they located the home. We then came and conducted reconnaissance, research and independently evaluated the property prior to negotiating. After ascertaining the true market value, based on direct comparable sales, we were able to secure the property from a position of strength, ensuring great savings on the purchase price.
This wonderful 3 bedroom home on 500 sqm of land close to Oak Park shops, cafes and train station is a brilliant buy & another phenomenal result for Kiersten!
Not only did we help sell her two bedroom villa unit in Moonee Ponds using our Exclusive Vendor Advocacy Service for $20,000 above her reserve, we also helped secure her fabulous new home in Oak Park for $20,000 - $30,000 less than market valuation - Kiersten is now more than $40,000 better off by using our services. Well done!
Susan was in the process of negotiating on the rental property she was living in, when she was recommended to VIP Consulting. After reaching a stalemate with the agent, as she felt she was gettting the runaround, we mentored & educated Susan throughout negotiations and helped secure her first home $11,000 below her limit!
A great spacious 2 bedroom apartment in St Kilda with baclony and a carpark for under $370,000! Now that's great buying.
Sharon engaged our Auction Bidding Services for a renovated 3 bedroom Victorian period home in Northcote. After completing our due diligence, reconnaissance, research and market assessment, we implemented our auction bidding tactics and secured the home almost $20,000 less than her limit!
A similar home down the road with an older renovation sold for $40,000 more two weeks later.
Well done Sharon on a wonderful investment property purchase!
Brian & Lynda engaged our Platinum Buyers Advocacy Service, and after some intense searching, we located this lovely 3 bedroom home with 3 living areas in a quiet court in Preston well under market valuation & their budget. The building inspection report was so impressive that Peter from Independent Building Inspections said it was one of the best built & maintained homes he has seen for a very long time, and said he would would have bought it himself!Good solid foundations are paramount in any home or building, and doing your homework & getting a property inspection is highly recommended before any property purchase. We at VIP Consulting, facilitate building & pest inspections as part of our due diligence.Well done to Brian, Lynda and Jaxon on a wonderful home purchase!
This modern 2 bedroom townhouse in Coburg was succesfully secured for Leharna using our Platinum Buyers Advocacy Service. After weeks of intense searching, negotiating and researching, Leharna is now the proud owner of her first investment property! Only a couple of years old and within walking distance to Coburg Station and Sydney Rd shops & cafes, this freestading home will see many years of solid growth, as contruction of a major shopping centre has been proposed close by. Now that's a smart & astute investor!
We would like to introduce you to Geoff McKenna from Loanworx
Geoff McKenna is a senior loans consultant with Loanworx.
Loanworx have access to over 30 lenders who can help you with the purchase or re-finance of your residential and commercial property. Geoff will come to see you any time of the day or night and his service is free to you. As part of his service Geoff will explain to you all the costs involved and what documentation is required for your application.
Geoff will find the best deal for you from their panel of lenders based on your specific circumstances and requirements. He will prepare and lodge your application and follow it through from conditional approval to settlement and assist you as required with any post settlement issues.
Geoff will chase the lenders, the valuers, the estate agents, the accountants and the solicitors as required to ensure your loan settles on time, every time. In short Geoff will help you through the home loan maze and take you from prospective purchaser to property owner.
If you would like more information or would like to have an obligation free chat with Geoff, please call us on 1300 736 638.
VIP Wrap Up
If you are thinking of buying or selling real estate, and you need independent & impartial advice that you can trust to make one of the most important decisions in your life, don't hesitate to call us, or feel free to pass on our details to anyone who does.....Enjoy the forthcoming festive season, and happy buying and selling.
Best wishes from the VIP Team
David Melatti,
John Melatti &
Peter Seitanidis
Licensed Property Advocates
VICTORIAN INDEPENDENT PROPERTY CONSULTING P/L
Ph: 1300 736 638
David Mb: 0414 708 091
John Mb: 0416 053 555
Peter Mb: 0413 014 930
Visit www.vip-consulting.com.au or email us at email@vip-consulting.com.au
