FROM WEAK TO A WEEK – A NOTICEABLE DIFFERENCE !!

FROM WEAK TO A WEEK – A NOTICEABLE DIFFERENCE !!

The property markets can often be compared to a window in a motor vehicle as nobody can ever agree which window should be open, and by how much. I always have a chuckle when I read the weekly edition of Home Price Guide Week in Review, by Louis Christopher. I would suggest that the name be changed to Auction Price Guide because all it does is count the weekly auctions which we all know are not a true reflection of the niche markets. This week Mr Christopher said “As we enter into Spring, the one reading we are already picking up is that the number of auction listings is down, compared to previous years”. He then went on to say ” No doubt this is an ongoing symptom of a weak market and I suspect we will see this continue right through to Christmas”. Well the only thing that I see as being weak is the inaccuracy of this report. Agents across Sydney are crying out for more property to meet demand. Mosman has just 4,900 homes and over the last ten years 4,000 have sold which explains why we have a reduced number of properties for sale. Transaction costs are high and home owners are simply staying put !!

A home just sold in Wolseley Road for $5,700,000 which well and truly exceeded the vendor’s expectations. Last Saturday, Chris Dale (long time subscriber) of Focus Real Estate auctioned a home at 98 Avenue Road, which exceeded the reserve by a staggering $400,000. We launched a home at 14 Rickard Avenue and sold it sixty minutes later for around $2,000,000. The house next door at 10 Rickard Avenue has had two open for inspections with a total of fifty six inspections and four contracts have been issued to interested parties. Geoff Grist this week sold the home we were marketing in Upper Spit Road for $1.7m. Marize Bellomo has had offer and acceptance this week on apartments to a value of $2.8m, so I would not call our market as weak. Rather a great week !! Oh, for the record, the number of properties that were submitted to Public Auction last weekend was 178 which is down from the 230 that were submitted at the same time last year.

The only difference between accurate property reports is how much effort is necessary when researching the subject. Saturday Domain last week in The Sydney Morning Herald was the best read of the year when they published The Spring Property Guide. Congratulations to Jonathan Chancellor who wrote a great article ” When only the best will do.” which painted an accurate positioning of the overall property market. We will continue to see properties sell for less than the purchase price especially if the contract has a 2003 acquisition date. It would be fair to assume that those properties well and truly exceeded the vendors’ expectations and the reserve price for that matter. Hormones have a habit of producing sales results where a home can sell for much more than true market value. Residential property acquisitions are an emotional decision and it is well documented that all property acquisitions should be viewed as a long term investment. The home that we are currently marketing was purchased in 1998 for $1,700,000 and we have interest at $3,500,000. The only real improvements to the property since it was acquired was a Development Application that has been lodged (and approved) to carry out a major renovation. The burning question that still remains in the real estate industry is, when will the authorities get serious and start compiling accurate data that is based on the exchange of property, not the settlement? It remains ironic that so many have an opinion about the state of play, yet are far from aware of the actual sales evidence. With just twenty one days remaining before the current quarter becomes a statistic, we have sold twenty six properties all by private treaty. More than fifty per cent of those sales will not be included in the quarterly report. As they say “never let the facts get in the way of a good story.” No matter what the repercussions !!

From our perspective we have moved into a much more positive real estate market and the results that we are posting confirm this. That is not to say that all the other niche markets across Sydney are sharing the same view. We have signed up (sadly) a mortgagee-in-possession sale which is our first since June 1993. We don’t set the markets we just participate in them and from that perspective we like what we are seeing at the moment. That does not mean that it won’t change as we know that property markets change on a daily basis. Take the apartment market for example, investors are now taking more than a cursory glance at price levels and returns. The rental markets are as strong as we have seen for some considerable time and rental properties accurately priced, find a new tenant within two weeks.

There will always be an abundance of spins on the property markets. We are more concerned at this point in time on the spin that Warney is extracting at The Oval. Oh and go the Swans too !! Cheers ^__^

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