Exciting News For JPP

JPP Property Management is up & running...
This has been a long time coming, and with good reason.
When JPP decide to expand, we ensure we can give the best service to both Landlords & Tenants.
If you have an investment property needing managing, or you are unhappy with the property management you currently have,
Talk to the team at JPP Property Management to look after your families investments.
Phone: 03 9523 1054 or [email protected]

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Market News

The REIV have released their figures for the quarter ending June 30. They have shown an incredible rebound in house prices, up by a staggering 5.4%. If this were extrapolated out for the year it would equate to a 20%+ rise. Units are a little more subdued at a rise of 3.2%. WOW!! But just before you put on your party hats and begin to assume that all property prices are flying again, let's look at the movement over a longer period of time.

The annual change from June to June for a house was only 5.7% so in fact the growth for the other three quarters was basically nil. This actually makes sense because the massive growth of the first quarter last year had to correct and it did so over the following three quarters. Looking at quarterly figures gives us these ridiculous movements.

Property is a long term venture and large long term gains are probable in many areas of Melbourne that you can purchase in. It is long term information that you require to make good choices. It is accurate information that will assist you in buying well. It is the experience of knowing what is a fanciful sound bite and what is good advice. Every time I hear that "property" is going to drop 40% I shudder. There is absolutely no evidence, foundation or even premise to base this on, but the media love to print it.

Good advice comes from sound information. The Valuer General of Victoria released its 2010 annual figures, which are for all intents and purposes, are as close to 100% accurate as any can be. For the period 2000 - 2010 during which we have had a downturn in the market in 2001 and also the GFC, the median house price in Melbourne have appreciated at 10.10% p.a.

Overall, Melbourne property prices are considerably lower than that of capital cities around the world. New York, London and Shanghai, are cities that people would pay almost double for a similar property to that which they can buy within the 5kms of the respective CBDs. I think you will find that over the next ten years we can envisage a similar or higher growth rate to that of the last ten years.

Property prices will continue to rise in Melbourne. Will the market take of next week, next month or next year, I am not sure. However it is not a matter of timing the market but time in the market. If you are buying for the long term in order to make money with very low risk, then buying as soon as you can afford to makes perfect sense.

Ian James
Director JPP

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Recent Articles Of Interest

Dwelling types over time

Next weekend the REIV will release its June quarter median prices for houses, units and apartments.

It is therefore interesting to reflect on the relative changes in capital gains in each of those property types over the past decade

In the 10 years 'til the March quarter this year the median price of a house had increased by $295,000, or 109 per cent, from $270,000 to $565,000. This takes into account the fact that the median price dropped in the March quarter.

In comparison, the median price of a unit or apartment increased by $244,000, or 113 per cent, from $216,000 to $460,000.

Read the rest of the article here (source:REIV).

Publication Of Sales Results

The publication of the sales results collected by the REIV each week provides a very clear indication of the state of the market to sellers, buyers, governments, the media and the public

There is an increase in the homes sold at auction for an undisclosed price when the clearance rate is low, as is currently the case.

It is not clear why this occurs, as it is based on the individual decisions of each vendor. The REIV has to respect the vendor's right to privacy if they choose not to declare the result.

Reviewing auction sales in the months of March and November over the last four years shows that when the clearance rate is in the 80s, the proportion of results not disclosed by the vendors is around 13-15 per cent and when the clearance rate is in the 50s and 60s, the proportion of results not disclosed is around 13-19 per cent.

Read the rest of the article here (source:REIV).

Standards must remain high in real estate

The REIV has called on the Victorian Government to ensure that licensing and educational standards for Victorian real estate agents are maintained in the move to national licensing.

REIV CEO Enzo Raimondo said that a national licensing regime was welcome as long as it did not result in the removal or reduction of licensing requirements.

"The current requirement for all persons engaged in the buying or selling of property on behalf of others to meet certain educational and experience requirements ensures high standards in the profession and confidence in the transacting of well over 100,000 properties every year.

Read the rest of the article here (source:REIV).

Sam James

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Where to get advice on Buying Property

I read an article on Saturday in The Age talking about property advice. The reporter had spoken with the Financial Ombudsman, Alison Maynard. She spoke about commissions and fee for service and all manner of things but mainly related to shares and securities.

She also spoke about conflicted advice in the financial sector and how an unregulated property market is not a good thing. Nothing could be further from actuality if you understand the law.

Any person or company offering assistance in the purchase, sale or leasing of property where they are being paid a fee must be a licensed Real Estate Agent. Whoever is paying the Real Estate Agent is deemed to be the principal and the agent can only have one principal in any transaction.

THIS IS ENSHIRINED IN LEGISLATION!!

There is no ambiguity, there is no room for error, and there is absolutely no conflict of interest unless someone breaks the law. If you want advice on property simply employ an experienced, licensed, competent Real Estate Agent and make sure you are the one paying for their property advice.

The majority of people I speak to who have had woefully inadequate advice have usually received it from:

1. A selling agent who is being paid by the vendor.
2. Their mortgage broker, accountant or financial planner recommended a certain development.
3. Spruikers offering free advice

Let's break this down. The selling agent is contractually obligated to assist the vendor. His main focus is to get as much money from the purchaser as he can. This is what he is being paid for. Any advice you receive from the selling agent that actually assists you to get a better deal would mean the vendors agent has broken his contractual obligation.

The financial planner or accountants are very important in your overall investment strategy. They are there to organise loans, tax minimisation, cash flow projections and all things financial, but unless they are competent, licensed Real Estate Agents, they cannot assist you with the purchase of a property unless they do not wish to be paid. And any recommendation about the value of a property is not deemed professional information and therefore not liable to any comeback from you! HOWEVER, many of these individuals earn extraordinary sums of money from property developers. When Docklands was being developed in the early 2000's almost any financial advisor recommending that a client purchase a "sure thing" in Docklands could earn around $10,000 or more simply for directing a potential investor there. This still happens today with off the plan sales all over Australia.

The third group are the very difficult group to manage. Some of these people will be Licensed Real Estate Agents, and very good ones. They will advertise themselves as property investment gurus. They will enshrine themselves in groups with names like Property Investment Professionals. They will explain what a good investment property is and will have fantastic spread sheets to back them up. These people will make it very clear they are there to assist you to find the perfect property. ASK THEM FOR A WRITTEN AUTHORITY TO ACT ON YOUR BEHALF AND EVEN IF THEY DO NOT WANT TO BE PAID – DEMAND TO PAY THEM SOMETHING. $1 IS ENOUGH. If you are not paying these people someone is, and there is only one other party in any property transaction - The seller (developer/vendor)

AND IF YOUR ADVISOR IS BEING PAID BY THE VENDOR ACCORDING TO LAW MEANS THEY MUST ACT IN THE BEST INTEREST OF THE VENDOR.

If your property advisor does not give you an authority to act and you are not paying for their advice, they are most likely working for the seller. I am yet to meet anyone who goes to work and doesn't want to be paid by someone. AND THERE ARE ONLY TWO PARTIES IN A PROPERTY TRANSACTION - YOU - THE BUYER, AND THE SELLER.

Caveat Emptor or "buyer beware" is not just a saying about the physical property. If you are thinking of purchasing any property you should get professional Real Estate Advice from someone who is legally obligated to assist you. I am a Licensed Real Estate Agent in Victoria, I only assist people who are purchasing or leasing property. We do not sell any property. I charge a fee for my service and use an authority that has been approved for use by Consumer Affairs Victoria. It means I am obligated to assist the person who is paying me. There are many other reputable Buyer Advocates, or Buyer Agents in Victoria. You can see whether they are licensed real estate agents by going to this government website Justice.vic.gov.au

You can search by agent or company and you can see how long they have been in business and whether the Business Licensing Authority has put any restrictions on their license.

Ian James
Director JPP Buyer Advocates

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Spotlight On Melbourne Suburbs

In our regular spotlight section we examine a selection of Melbourne suburbs, highlighting what's happening in these areas right now

Altona

Municipality: City of Stonnington
Population: 9685 (2006 census)
Postcode: 3143
Location: 13km from Melbourne CBD

Amenities

Altona's main schools are:

• Altona Primary School
• Altona College
• St. Marys Catholic Primary School
• Joseph Girls' College

Transport - Altona, Westona and Seaholme railway stations and bus routes 411, 412, 415 & 903

Shopping - Altona Gate Shopping Centre and the Pier Street shopping strip with markets, restaurants, coffee shops, supermarkets, and boutique stores.

Most of the housing stock in Altona is detached, low density and post war architecture. Land sizes tend to be large (600 sqm). Subdivisions are common and new town houses are replacing the older style homes as residents move in. Villa units - typically 6-8 on a block - are also prevent and mainly found close to the shopping zones and bay. Blocks of flats are not a notable feature in Altona.

"*Image from Wikipedia

Catherine Cashmore

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The Block Update

As you would be aware The Block is now in full swing on TV. They have renovated a few of the rooms and are beginning to make the houses look great. It does look like Josh and Jenna with the double fronted house are doing very well, winning the first 2 rooms!!

The houses are looking great externally at the moment

As you can see it was a very busy day down there with people having a bit of a look to see how things were coming along.

The agents have all been picked so we should see the auction campaigns starting shortly. As long as the properties are priced correctly for the location and size they should sell. The main concern however is the location with the car park to the shops on Bridge Road directly opposite. These properties lack parking space and with the difficulty that we all have in finding a car space this close to Bridge Road, it will be an issue when it comes to the final price.

It is going to be very interesting to see how things go over the next couple of months and we do hope that these properties sell well for the agents that are involved.

Courtney James

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A buyer's market - but is life really any easier for home buyers?

You can analyse as much statistical data as you like, and in many cases twist it to argue any point you want to make, but ask the average home buyer if they're finding it any easier to purchase property, and I doubt the answer would be an out and out yes.

Bear in mind a home buyer is not like an investor. An investor can pick and choose the areas they search in. They don't have to warm to the 'feel' of a home. They can be walking distance from any cafe, not their favoured one. They can purchase close to any good school, not the one their children attend. Investors don't need to buy until a good opportunity presents itself - and for this reason - they can step in and out of the market at will whilst targeting those 'need to sell vendors'. In such cases, there are often multiple properties that tick the right boxes and we're currently in a perfect market atmosphere to take advantage of them.

However home buyers rarely have such a luxury. When home buyers purchase property it often follows months of searching through limited suburbs of choice for a property with the particular idiosyncrasies to suit individual tastes. More often than not, when a home buyer finds their 'dream home', there are half a dozen other people who have targeted it as well and a vendor who is less than willing to compromise.

If we do a rough breakdown of the dominate players currently in our market place, they fall into two main camps. Around 30% are investors (who can step in and out of the market as they see fit) and 60% Home Buyers (single first home buyers make up a smaller less influential demographic and therefore are not included in this example). Most investors target apartments close to the CBD which are both low maintenance, and easy to tenant. However the dominate demographic of home buyers are either young couples looking for a family home, or current owner occupiers looking to upgrade. They also tend to fall in the 600-800K price range - (or in the case of upgraders - the $1Mil + price point.)

On top of this we have a largely a discretionary market. Most vendors don't 'need' to sell - especially if they can't get their price - they're happy to sit and wait for better times, and this has an effect on how much further we can expect prices to drop. Indeed, if there was really a wide spread belief of a housing 'crash' - or houses irreconcilably slipping on a downward slope, vendor's would be settling for any number they could get, and this is simply not happening.

It's OK releasing reports of high numbers of stock on market which give the impression of 'over supply', but without a break down of where and what type of stock this bumper crop represents, it's impossible to draw conclusions about its effect on our current home buyer demographic. In fact, with simple reasoning, it's fair to conclude if turnover is down, and prices are not falling at a rate to signify underlying economic concern outside of cautionary sentiment, it's more likely that those homes currently representing the largest supply in the market place are simply not suiting the major current 'home buyer' demographic.

This comes as no surprise when you consider the major bulk of development has been concentrated on going 'up' rather than 'out'. In Melbourne for example, there has been approval of more than 20,000 high rise apartments over the last two years - most being situated in the CBD. Whether these developments will be completed is debateable, however it points to an abundance of accommodation which is largely aimed at the investment/rental market (particularly overseas investors).

Whilst most buyers have been forced to accept apartment living if they want to stay in inner city ring suburbs, given the choice, Australian's have always preferred larger floor space. In fact Australian houses lead the world in floor space per capita, and in this respect, the Australian dream is far from dead! Furthermore, whilst apartments tend to appeal to young single home buyers - particularly first home buyers - they do not fulfil the needs of the largest 'current' home buying demographic actively shopping in the marketplace.

Detached family accommodation close to schools and transport is in anything but oversupply, and considering the cost of new homes is set to increase, supply is not accumulating fast enough to meet demand. Therefore, it doesn't matter how much stock is on the market, if that stock doesn't suit home buyer's needs, it can hardly be called a 'buyer's market' and in the current climate, would probably be better termed an 'investor market'.

Catherine Cashmore

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To believe or not to believe

Each week we as a company are called asking what our thoughts are of the current property market by papers, journalists, property buyers & friends.

As a close working company we sit together and discuss this as a group, we hear see & read the same information as everyone else, yet still everyone has their differing views.

So my big question is - Who do you believe?

Do we believe Julia Gillard's Carbon Tax / Emissions trading Scheme is not going to cost us?

Do we believe our Police Force (who do serve & protect us daily) is not honest?

Do we believe our Newspapers are any different to the News of the World Newspaper?

All these questions and more can be over dramatized and stories sold to sell papers, aid reporters and news readers to make us listen & buy / vote for their products / groups. This is what they are paid to do.

Within the property market we hear & see so much of this also, when selling companies in Queensland report that the Melbourne Property market has crashed!! Or we read that an economist will give his view on the weekend auctions around Australia!! Or Real Estate agents not reporting Auction results because there company won't look as good if it shows they have Auction pass ins, or agents opening up real estate agencies & buyer agents companies after obtaining a licence on a 4 day course costing a few thousand dollars, purporting to know all??

Accurate information is hard to get now unless you work in the field & are involved in the current market. I am unsure how agents in Queensland or Sydney who want Melbourne Investors to buy there off the plan properties in their rural areas, can predict our market has crashed...Other than to hope someone will believe them & invest in Qld or NSW...Again media & news can manipulate what can & will happen. We need to do our own investigations, to get the most accurate information we can.

The only person you can trust is yourself, you need to listen to people you believe are giving you the information which can assist you. Yes sometimes this information they give you will assist them also, but trust yourself & do your own homework to ensure they are a reliable source. Do they work in the business / industry you are wanting information regarding, can they give you references of people they have dealt with, not just fictional testimonials.

Unfortunately in life bad news, get rich schemes, & politics sells papers & floods our news. What we need to do is differentiate the good, the bad & the ugly.

If something is free, or you are told it won't cost you a cent - Think about it, read the fine print, it is always going to cost some one something.

May be not today, maybe not tomorrow. But it will cost you eventually.

Sam James

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Technology Monthly

Quiet Month

I would have liked to have something to say on the new iPhone by now, but Steve Jobs is keeping quiet this year, even though a new model is expected in September...and E3 was fairly disappointing as well, sure there is a new console, but Nintendo didn't show anything on it except tech videos. I really don't have anything to talk about this month.

I will have something very exciting to talk about next month....but for now:

Minecraft Follow-up

I have created a minecraft server for a bit of fun...if anyone would like to participate/contribute please contact me at [email protected]. I already have 2 builders working on it and it is coming along nicely.

Server details are on my website if you would like to take a look.

Here is a little something I whipped up (with the help of an online generator)...it is comprised of 13,312 blocks and 19 different materials...Click for a closer look:

Chris Thursfield

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Recipe: Sausage rolls

Ingredients:

For The Filling:

• 1 tsp rapeseed oil
• 1 plump shallot, finely chopped
• 100g green lentils, drained weight from a 400g can
• 300g lean pork mince (8% fat), preferably organic
• 50g fresh white breadcrumbs
• 2 tsp finely chopped tarragon
• good pinch dry mustard powder
• good pinch grated nutmeg




For The Pastry:

• 1/2 x 375g sheet of ready-roll puff pastry
• 2 tsp semi-skimmed milk, to glaze

Method:

1. Heat oven to 220C/200C fan. Line a baking sheet with baking parchment.

2. Heat the oil in a small, non-stick frying pan. Tip in the shallot and fry for a few mins until softened. Leave to cool. Meanwhile, mash the lentils in a bowl with the back of a spoon, then stir in the rest of the ingredients, the shallot, a small pinch of salt and a good grating of black pepper. Chill for 20 mins (not essential but makes it easier to shape).

3. Halve the filling. Lightly flour the work surface and, using your hands, roll each half, one at a time, to a 28cm-long sausage shape - dust more flour on the work surface if it starts to stick. Set aside.

4. Roll out the pastry on a clean, lightly floured work surface to a 28cm square. Cut in half to give 2 rectangles. Lay one of the sausage shapes along one of the long edges of one pastry rectangle. Roll the pastry around it to almost enclose, then brush a little milk down the opposite long side. Roll the join underneath and press lightly down to seal. Trim off the ends to neaten if necessary, then slice into 8 rolls. Place on a baking sheet, with the joins underneath. Using the blunt side of the knife, make 3 indents on top of each roll. Repeat with the rest of the pastry and filling. Brush the tops with a little milk.

5. Bake for 18-20 mins until golden and slightly puffy. Remove from the sheet and cool on a wire rack. Serve warm or cold.

Chris Thursfield

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