It has been a couple of weeks since my last market comment and not too much has changed in the market. The media is still worried about underquoting, there is still some talk in a couple of papers about the “property bubble” bursting yet the stock market is still going up very strongly.
Clearance rates are remaining over 80% even with numbers of auctions climbing and private sales are still strong; over 1200 sales of property in Melbourne last week. The talk from the agents is also quite upbeat about numbers of properties coming on the market in spring. But this will only have an effect on price if the demand slows and I doubt it will. If anything I think we will see an increase in demand and this will all but mitigate any increase in supply.
No matter whether agents underquote, or the government legislates to attempt to stop them; No matter whether a lot of property comes on the market or only a little does; the key to buying well starts with accurate property assessment.
If you want to buy a property in the current Melbourne market, spend the time going around to as many properties as you can. Take copious notes and remember as much about them as you can. You must note all their pros and cons. Then attend the auction and note the number of bidders and the final price. If you do this enough and gather enough data, you can begin to get an idea of what properties in the area are worth.
You need to take into account, land size, location relative to transport, shops, parks and gardens. You need to take into account age of the original house, style and size of the house. When the renovations were done, how much work still needs to be done to bring it up to spec.
Then you need to analyse how many people were bidding, when the property went on the market and how many bidders there were after it got to the reserve. Once you have done this consistently for about three months in all the areas you are looking, then you will start to get an idea of what the vendor will want regardless of the quote offered by the vendors agent.
It is no use spending your time preparing for an auction which you have no chance of succeeding at. Doing pest inspections, building inspections and legal checks only to find out the bidding is starting just above your limit for the property is no fun. It can also be quite expensive.
If you cannot accurately appraise a property on your own, it does not matter how good a negotiator you are. You will not know whether you have done a good deal or not. This is the key to avoiding “Buyers Remorse”
If you do not have the time or the inclination to do all this research perhaps you should think about having a chat to a Buyer’s Advocate. Feel free to give us a call and set up a no obligation first meeting.
Ian James
