The autumn selling season is just starting to pick up pace with 832 properties reported as sold by the REIV last week. Volume is still very low and the first real test of the market will be February 20 in two weeks time. Anecdotally we have seen the huge surge of interest in property already. Every agent you talk to says they have huge numbers through open houses. The media is portraying property prices are “out of control” and that they are unsustainable. “Melbourne’s property market is on track to produce similar heat to last year”. “When will the bubble burst?” Most tabloid newspapers are simply looking for “sound bytes.”
The growth is sustainable!!!! And if your family does not purchase property soon it may be very difficult to get in the market over the next couple of decades.
Our Reserve Bank Governor, Glen Stevens has spoken often of the lack of dwellings in Australia, coupled with the increasing population growth as being one of the major factors of rising property prices in Australia. His deputy, Ric Battellino, gave an assessment of the Australian economy’s future prospects on 25 November 2009. In doing so, he reviewed the much-discussed ratio of house prices to household income. He surmised that most articles are written about the different ratios of Australian and North American house price to income ratio. He spoke of the huge differences in non housing costs to people in North America, in particular health care and the much lower gearing of loans in Australia.
The amount of raw materials China will import from us over the next ten years will be greater than the total cumulative amounts they have taken in history. Our unemployment rates keep dropping. We are going to have to increase our population and whilst property investment remains at all time highs, nearly half of it is spend on refurbishment and alterations to existing dwellings.
We need to build more houses!!! We are not sustaining supply!!!
On the demand side, investors are not enamoured by the stock market at the moment. Over the last couple of years there seems to be one setback after another. The latest of course is the potential for a couple of European countries to be unable to pay their debts. This is driving investors to direct property investment in droves.
Buying a property, renting it out, refinancing it to utilise its equity seems all very simple, but it is not. You need to have a goal that makes sense. You need to have a good team, starting with a financial planner, accountant and mortgage broker. And of course you need the best advice you can get regarding the actual property and how to purchase it. You need to use a professional buying advocate to assist you with your purchase.
If you buy property without professional guidance in the most difficult property market in a decade then you might as well stick your money in the bank and let their fees and charges erode your savings.
Without professional advice you will spend more time looking at the wrong properties, ones you cannot afford or cannot secure. Without professional advice you will most likely over pay. And without professional advice you will be most unlikely to win the negotiation battle.
Have you noticed that people selling all hire professional real estate agents!!
If you want to secure property in the Melbourne property market this year come in and have a chat to one of our advocates. The first meeting is complimentary and obligation free.
Ian James
