What A Huge Week.
The last week of October is renowned to be very busy & this year has been no different!
Sales this week were high not only in Auctions of which the REIV reported 882, of which 723 were sold and there were also 741 private sales. This makes last week the biggest for the year.
Our advocates were involved this week in 7 Private sales through out the week, & 9 auctions of which we successfully purchased 4 prior to Saturday!.
Buying a property prior to auction will always give a good negotiator a much better chance to secure the property than going to auction. There are less emotional offers before auction and therefore a skilful negotiator may be able to purchase the property for a lower amount.
If you have let the property go to auction the emotion on the day is huge, your partner or friends all push you along & the auctioneer doesn’t help you think clearly when you are listening to his jibes such as “ What is another $5000.00 going to do to you”……. WELL what it can do is make you feel very ill that you have over spent. It can make you wonder if the property was really worth those extra $$$$ that I spent. You will be hoping that the bank is going to value the property at that price you paid, otherwise they may not loan you the money you thought they would. (OOPS didn’t think of that one) This can & does happen; we have had calls from a couple of people who went to an auction with little or no experience and apparently got caught up in the heat of the day & were the successful bidders on the day, THEN after the auction has settled they have realised they have over paid & there finance will not cover what they have done!
Unfortunately if you bid at auction you are bidding unconditionally & in the terms that the vendor wants, with the contract that has been on display prior to the auction….
If you are thinking of attending an auction do set a limit, & do be comfortable to walk away if you are unsuccessful…
Back to the current market.
This is still ruled at the moment by the demand vs. supply, we saw many properties being sold well above the agents quotes while understanding this was not underquoting, this is caused by buyer demand.
Each auction we attended had at least 4 bidders, moving the price well above the reserve..We do not see any change of this happening in the short term & even longer as supply is still very scarce.
The Real Estate Institute of Victoria released the September growth figures in the Herald Sun on Saturday for each Suburb. This is no shock as we have been saying for months that property in good location, with public transport nearby, shops & good schools close will perform well & continue to show excellent returns for capital growth.
The REIV has released its September Quarter Property Update which shows the median price of a house in Melbourne reached $480,000, an increase of 6.7 per cent since the June quarter.REIV CEO, Enzo Raimondo said that improved confidence in the Victorian economy combined with ongoing population increases has resulted in a new record quarterly median price. The improved confidence in the economy has revealed the underlying issue; a lack of supply, both for purchasers and renters. Unless there is a sustained increase in supply the REIV expects further pressure on prices.
REIV Melbourne Median Prices
REIV 1 August 2009
Sep Qtr 2009 % chg Jun-09 to Sep-09 Jun Qtr 2008
House Median $480,000 6.7% $450,000
Unit/Apartment Median $410,000 5.1% $390,000
Reports like this one above have been seen in every paper, magazine & news show, we have seen this coming since very early February this year, Even with the interest rates going up, the supply issue will continue to cause the prices to increase.
The old question – When is the right time to buy property?? The correct answer is yesterday, however if you did not buy yesterday & you have the ability to do so, then do it today!!!
History shows property is a good investment, when bought well.
The market closer to the CBD is always the strongest, followed by the 15 – 25 klm radius… As the government opens up the land further afar, they will need to ensure all the infrastructure to be built & up & running & fully developed before buyers will see little capital growth in these areas, so when buying further afar look to it as a longer term plan!!
Sam James
