ACT ACCORDINGLY FROM MONDAY!

ACT ACCORDINGLY FROM MONDAY!

Each week another opinion about our strong housing market evolves, and any comparisons with the US property market simply don’t stack up. The United States has a population of around 290,000,000 compared to our 19,500,000, their housing prices have risen in real terms by 38 per cent in the past seven years, and in the same time ours have more than doubled. Our local market is just getting tighter. If you look at this week’s edition of The Mosman Daily, the peak selling month for September, fewer than thirty homes will be available for acquisition.

This is without a doubt the lowest in memory, and don’t expect a rush in October as the first two weeks are school holidays. The clearance rates are sitting at around seventy-five per cent, and at this time last year they were on their way to a record low of thirty percent in Mosman. Now if you are thinking that October will be a big month, you can think again. The school holidays occupy the first two weeks and the Rugby World Cup starts straight after and concludes in late November. Our property market is so very different to what it was in 1988. Then the weekly auction rooms at or about the same time were offering around 250 properties on the one-day. The first auctions would kick of at 10.00am in the morning and we would still be auctioning at 10.30pm that night, I have to laugh when I remember that I once listed a home and it was number 205 on the order of sale. Back then, we did our open for inspections on a Wed/Sat and Thur/Sun, and we would on average, be handling around eight auctions each a month. Today it is usually three properties.

Next Monday, 1 September 2003 will see the introduction of the new legislation Property, Stock and Business Agents Act, and these are the most sweeping changes that our industry has seen since before World War II. Already in force in Victoria, one very well known agent is facing eleven charges and a fine of $240,000 for using dummy bidding. Watch the inspectors nail a few profile agents early in the piece to show that they now mean business. I think that on-site auctions will now become less popular and we will see a move back to rooms again. I am reliably informed that already quite a few agents are still under-quoting, and with September auctions listed, the Department of Fair Trading will have some immediate investigations. Agents now have to quote you a price within ten per cent of the reserve, although this week I had an auction go $130,000 over reserve. This doesn’t count, as the property had been called on the market. This new legislation is absolutely awesome and we certainly welcome it with open arms (registered of course).

I can’t see why so many were shocked to see that the value of building work fell in the June quarter, due mainly to a lack in confidence for new investment housing under construction by developers. This figure really means very little as there continues to be ongoing strength in the home alterations/additions market which is what drives our housing market. Many investors are looking outside the CBD and focusing more on areas up and down the coastline, where house prices rose 20.8 per cent in the year to June 2003. Home units did even better, recording a 22.6 per cent increase over the same period.

The Internet has certainly been of great assistance as purchasers can see what is happening in all these country areas without even leaving the comfort of their homes. Then if the agent is really smart and he provides a service that keeps prospective purchasers advised on what is happening in that particular area, he/she makes a prospective purchasers job that much easier and keeps them better informed. I was just looking at a unit for sale with Richardson & Wrench Forster. It is sixty metres to the beach without views and two bedrooms and it is for sale asking $297,000. Four years ago in the same block there were sales of $97,000 and twelve months ago they were selling at $138,000. Annual rental returns for these units are around $8,000 per annum. I found all this information without leaving my office. No wonder the property industry is so easy these days!!

Unless we see a lot more houses hitting the market in the next week, home prices in Mosman will yet again exceed all expectations, although with fewer houses the trend will be a huge culling of agents as there are just too many. The new legislation will inevitably lead to fewer agents with quality finally taking over quantity, and don’t be surprised to see quite a few agents appearing on that 6.30 pm time slot on television. It will be very interesting to see who has the final laugh. Quite a few agents in Mosman have only days to finally get their act together. The new legislation no longer suffers fools!!…cheers and clink ^__^

Leave a Reply

Your email address will not be published. Required fields are marked *