Clearance rates are falling, climbing remaining good. Median price is lifting, falling and just remaining steady! The Europe crisis has deepened, is behind us and has nearly found a resolution. Our property market is in good shape, about to drop 40% or will be moving up shortly.
Whichever papers you read, whoever you listen to, I think you see through the smoke and mirrors. Nobody is really sure what will happen tomorrow. One thing for sure is that the sun will come up and we still need to go to work, feed our families and have somewhere to live. And I never see any argument about Australia being a fantastic place to live. Our census hasn’t told us our population is shrinking. Far from it, we are still increasing our population.
So what does all this actually mean? Simple, everyone needs a place to live; your properties will not devalue overnight. But they will also not grow by 20% each year. If you purchase property for the long term you will inevitably make money and have a place to live. At the moment the property market in Melbourne is a “negotiators” market. If you know what the value of the properties are, if you understand how property transactions occur and you are an experienced property negotiator, you can buy very well.
There will not be another 4 properties given away in South Melbourne anytime soon. Channel Nine’s, The Block, sold all their properties for around $1.5M. This was exceptionally good buying by the four purchasers that ended up securing the homes. Channel Nine went to great lengths this year to makes sure the contestants won money. To value them at unrenovated land value assured this. These properties are close to the best section of South Melbourne and would cost around $1.5M – $1.8M to have purchased and then renovated. Even one of the auctioneers said we haven’t reached cost price yet during his auction. And he was auctioning 405 Dorcas which sold for $1.620M
It may have seemed like fun to see the gentleman from Energy Watch throwing his money around. I am sure a few of the creditors of Energy Watch felt very happy to see $1.4M spent on a publicity stunt instead of potentially paying back some debt. We do see people like this at auctions on a fairly regular basis. Andrew Stuart did quite well not to lose his cool with someone who had a completely different agenda than solely being there to win an auction. Last weekend I attended an auction where an extremely experienced James Tostevin had to use all his experience to keep his temper in check from a gentleman whose sole purpose was to disrupt the auction in the hope that others would give up and walk away. Unfortunately, for the inexperienced prospective purchaser, I was the other bidder. I have seen antics from other people who think they will “trick” the other bidders into remaining silent. I have heard questions asked solely to intimidate others who have not done their homework. When bidding at an auction, you need a plan, you need a backup plan and then you need a contingency plan. And you need to know when to move between them.
If you are considering bidding at an auction soon why don’t you give us a call and we can have a chat. Bidding at auction is not rocket science, it does however, require quite a lot of experience to know how to handle different situations.
Ian James
Director
JPP Buyer Advocates
