Market News

As we can see from the weekends 66% clearance rate, the market is continuing its balanced state. This means we can assume to see a very small consistent growth that will be imperceptible on a weekly basis but at quarter�s end will be close to 3%. After 6 months the $500k properties you can purchase now will be pushed to up towards $525k - $535k. It will not be enough to get the bank to refinance, it will not be enough to sell and make a profit: stamp duty, solicitors� fees and selling fees would easily eat up any profit on that short a term. However, anyone thinking property prices will be 3%-5% lower by September will be sadly mistaken.

The Herald Sun have said there were 8612 properties up for sale or auction in Greater Melbourne. This is down from the previous week of 8649. For the prices of properties to begin to retract, we will need to see clearance rates in the 50 - 60% bracket and we will need to see the total numbers of properties on the market increase significantly.

For those that follow the clock theorem, I believe we hit 6 o'clock at Christmas. We will see reasonable growth through the first half of this year and an accelerated growth in the latter half of this year for Melbourne�s top third of performing suburbs. Around the middle of the year we will see whether the governments first home buyers discounted stamp duty will reinvigorate the �New Estate� sector. I am uncertain as to whether this will be significant. Developers are still not being well funded as banks have better options in the average mum & dad borrowing 80% for a standard house. Finance is still in short supply worldwide and banks are continuing to mitigate risk.

There were some exceptional results on Saturday. 5 Gaynor Court sold under the hammer $2.743M. This was after a third bidder entered the fray after arriving just before the auctioneer wrapped up proceedings at $2.685M. The third bidder asked the auctioneer what the last bid has been and the auctioneer made a good natured comment that $2.7 would be a good bid and seemed rather surprised when he received a positive response. The bidding went back and forth but was finally won by the original bidder.

The lower end of the market, $400k - $700k is not getting ridiculous prices, however it is getting good results. 3/11 Selwyn Street Elwood sold over the weekend at $450k. This was as predicted as was 12/7 Dickens Street Elwood. We estimated this to be a low to mid $500's property and it sold for $541k. No surprises here!

If you are considering purchasing a property this year why not come and have a chat. There is no obligation and the first meeting is free.

Ian James

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Staff News

Busy, Busy, Busy...
Another exciting month for JPP Buyer Advocates staff,
We would all like to wish Courtney James & Chris Thursfield the best for the wedding this coming weekend,
And hope they have a great break In Thailand.
Ian & I are now ready to sit back & relax, well not really,
Just being able to not think about weddings for a change now both our children will be married...Yeah!!!

Sam James

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Recent Articles Of Interest

Auction v private sales in 2010 December quarter

Auction results dominate property discussion most weeks despite the fact that most homes are sold through private sale. Anyone watching the market needs to ensure that they take that into account, otherwise they will only have part of the picture.

This is highlighted by the most recent December quarter, when the difference in demand and prices between homes sold through private sale and auction was quite significant.

The median price of a house sold at auction was $710,000; there was a small 1.4 per cent increase over the quarter and 2.4 per cent over the year. This indicates that from the general perspective, auction sale prices have been very stable for a year.

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

Melbourne residential vacancy rate: below three per cent since 2005

The vacancy rate for residential properties has now been below three per cent for six years, according to the REIV January vacancy rate release.

REIV CEO Enzo Raimondo said that the vacancy rate in January was two per cent and that the last time the market was in balance was in January 2005, when a vacancy rate of 3.3 per cent was recorded.

"Whilst the vacancy rate remains below three per cent, renters are likely to face higher rents due to supply shortages and higher competition.

"In the past five years, according to the Victorian Government's Office of Housing, the median rent for a three-bedroom house has increased by 43.5 per cent, compared to 21.1 per cent between 2000 and 2005. The median rent for a two-bedroom unit has increased by 54.5 per cent, compared to 25.7 per cent between 2000 and 2005.

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

Sam James

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Choosing The Right Suburb

One of the main reasons a property's location is so important can be captured neatly in the old adage 'you can change a house, but you can't change its location'. However, searching for the perfect location involves more than simply looking for the worst house in the best street. It's owner occupiers that underpin property values, so choosing the right property, in the right suburb, is important from both a lifestyle perspective, as well as an investment perspective.

It's essentially 'community spirit' that makes a suburb a thriving hub of activity attractive to home buyers. Therefore suburbs that have been established for a period of time - usually evident in the architectural landscape - will offer the widest range of amenities and attract a diverse demographic which increases both buyer demand and therefore fuels capital growth.

If purchasing a family home look for suburbs with good schools, neatly maintained homes, and abundant park land well suited to a family lifestyle. Bear in mind future buyers or renters of your property will be looking at homes with the potential to provide accommodation for at least the years their children are at school. Therefore properties that have room to expand, or offer at least three bedrooms, two living areas, and two bathrooms, will be most desired. Purchasing a two bedroom villa unit in a popular school zone for example, somewhat misses the point!

If purchasing an apartment concentrate on suburbs that are close to the city where they are more popular due to scarcity of land. Make sure they're located near to shopping strips & restaurants, offering lifestyle options more suited to the Gen Y demographic. Don't forget off street parking is essential, as is enough floor space to provide the level of accommodation needed to make the property a 'home' - not a hotel room. Renters value their privacy just as much as home owners, so steer clear of noisy areas and main road locations. The idea is to attract long term tenants and avoid periods where rent has to be reduced or the apartment stands vacant.

Perception also plays into the aspect of a good suburb, and different suburbs will attract different types of people. More affluent areas tend to be populated with trophy style homes and neighbors less likely to mix outside of their small 'gated' communities. Buyers in these suburbs are usually older families working in established professions and therefore generally have their social network already in place. On the other hand, newer suburbs further away from the city will attract younger families still working their way up life's long ladder. They tend to be more open to community style activities such as street carnivals & church fates, and therefore emanate a more socially friendly atmosphere

There are obviously many shades of gray in-between so it's important to understand the type of buyer each suburb attracts if you want to ensure the home you buy - or develop - will hold value when it's time to sell. Familiarize yourself with popular property styles in the locality and spend a day perusing the local shopping to help pinpoint the right suburb for your needs.

Broadly speaking, the closer to the city you look, the higher your budget needs to be. However a high suburb median doesn't mean the annual capital growth rate will be higher. For example, out of Melbourne's 320 suburbs, 180 record growth rates in excess of 9% over a 10 year period, therefore there are plenty of options to choose from if this is your main criteria. Concentrate on getting the most suitable property, in the best location, within a suburb that has a median value you can easily afford to service.

Catherine Cashmore

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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

Abbotsford

Municipality: Yarra
Population: 4327 (2006 census)
Postcode: 3067
Location: 2km from Melbourne CBD

Located approximately 2km from Melbourne's CBD and home to 4327 of Victoria�s population (2006 census). There is a rough 50/50 split between renters and owner occupiers. Population under 15 yrs - 444. Population over 65 yrs - 453. Streets are narrow and the suburb has significant industrial zones. However in contrast to this the Yarra River and near by Victoria Park help maintain an attractive residential atmosphere. Abbotsford is home to the famous Skipping Girl Sign.

Amenities

Abbotsford�s main schools are:

• Abbotsford Primary School
• Sophia Mundi Rudolph Steiner School
• Abbotsford Christian School

Transport - Abbotsford has two train stations servicing the Epping and Hurstbridge lines

Shopping - the main shopping centre is Victoria Gardens Shopping Centre and Victoria St Shopping Strip

Abbotsford's home to Carlton and United Breweries who produce Victoria Bitter and Fosters Larger. The area is also famous for the 'skipping girl Vinegar' heritage listed sign.

House Styles

Abbotsford contains an abundance of semi detached period homes which are commonly single and double fronted Edwardian and Victorian in style. Apartment accommodation is growing more prevalent as the suburb gentrifies. Due to the scarcity of land, detached houses are less common and therefore attract a premium. Land sizes are generally small - the average being approximately 300sqm.

Median House Prices

Median Unit Prices

Sam James

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Special Conditions In Contracts Need To Be Carefully Worded

Many times before finalising a deal, prospective purchasers want some surety that the property they are buying is structurally sound. It is prudent to have a deal in place prior to expending $600 - $700 with a pest and or building inspection firm if you can. When going to auction this is not usually possible as the bidding at auction is on an unconditional basis.

However, when buying outside the auction process a great many purchasers will buy subject to an acceptable inspection. This means they have secured the property at the price and terms they are comfortable with but have the right to withdraw if the property inspection is not up to standard. As a purchaser, if you expend money prior to securing the deal a good selling agent can use this to leverage the price up, exactly as he/she should. Don't forget, they are working for the vendor.

For many years now selling estate agents have offered a clause to purchasers for this purpose. In essence it says that if any "Major Structural Defects" are found the purchaser has a right to withdraw from the contract and get his/her deposit refunded immediately. This is all well and good if both parties agree on what a "Major Structural Defect" is. It is not good for either party if this wording is left to interpretation. As was the case in 2008. A contract between a purchaser and vendor was signed late in 2008 with a condition that stated the purchaser could withdraw if there were any "Major Structural Defects". It was found to be damp under the property and of major concern as rust had started to affect the base of the steel posts. It went on to say this required further investigation from a licensed plumber.

Whilst the purchaser wanted to withdraw under the special condition the vendor did not agree there was a "Major Structural Defect" and did not refund the deposit. In short it took until July the following year to get to court and the judge ruled in favour of the purchaser. The deposit was refunded with interest. But both the vendor and purchaser were "ON HOLD" for over 6 months. The purchaser could not purchase anything else in case they lost in court and the vendor could not sell and move on with their life either.

All of this could have been easily avoided by using a condition that allows the purchaser to withdraw if they are not "satisfied" with the building inspection or pest inspection report. This alleviates any inconclusiveness for both vendor and purchaser. If done in a timely fashion, say during the 3 day cooling off period, then there is no downside for the vendor and a tremendous upside for the purchaser. If the report had shown no structural defects, however many very costly minor defects, under the initial clause they would have no right to withdraw.

Whilst the outcome of the court case in the Victorian Supreme Court (Clarke v Mariotis 15/7/2009) did not criticise the wording of the clause using "Major Structural Defects" it is easy to see how this clause could be detrimental to both vendor and purchaser alike. About the only people who seem to benefit from a clause like this would be the lawyers!!

Be aware, a real estate agent should not draw up their own words for a special condition. They are not employed in a legal capacity. A Licensed real Estate Agent should only use special conditions that have been written by a solicitor. Whether they are a Buying Agent or a selling agent.

Anyone considering purchasing property would be well advised to get good advice before purchasing a property. If you take counsel from the selling agent, you must understand they are contractually obligated not to assist you. In fact it is there job to put you in the least advantageous position if that puts their client, the vendor, in a better position in the negotiations.

When purchasing a property consider a buyers advocate. Consider one that does not sell real estate and has been licensed for a long time. Buyer Advocates can assist you to purchase the right property, in the right time frame for the right price.

Ian James

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Technology Monthly

Pandora Follow-up

After two and a half years of waiting, it has finally arrived....I am now one of only fifteen hundred or so people on the planet with a Pandora console

After the initial problem of the unit being sent to the wrong address twice, the unit arrived and to my delight had 40% battery, meaning I could use it straight away....at first the joystick didn't work properly and the stylus was stuck inside the unit, but a software upgrade later and some repeated jiggling of the stylus and these problems were fixed....the unit is very small, about the size of a Nintendo DS, but a bit thicker and can be used in a laptop like position of open all the way. The battery lasts 8-10 hours depending on it's use and the mouse can either be controlled using the touch screen or the two joysticks.

In the way of external hardware, it has 2 SD card slots, a volume slider, a headphone jack and the power/lock switch on the front, a pop-out stylus on the right hand side, and on the back it has a USB host port, an OTG mini port, TV-out port, power connector and the two gamepad shoulder buttons. When you open the device, you find a full QWERTY keyboard as well as a full gamepad...both the gamepad and keyboard are very nice to use.

The device comes pre-loaded with Linux Kernel 2.6.x and has a custom OS based on Angstrom, it also comes with some basic software such Midori (a web browser), XFCE (a window manager) and office software such as Abiword, Gnumeric and Clawsmail. The best thing about the unit though is as it is open source, software can be developed for it by anyone who knows how to code in the correct language....there are already hundreds of programs out for it, including: opensonic (a fan made sonic game), Pandora panic (a reflex game similar to Warioware), openbor (a port of Beats of rage, which is a fan made version of Streets of Rage for the Sega Megadrive) and an emulator for virtually every console ever made up until the PlayStation 2 and Dreamcast.

I pre-ordered the Pandora in September 2008, and I think most people would agree that is a long time to wait for anything, and although technology has changed a little since then, the Pandora is still a very powerful and capable little machine and I will definitely be using it as my main portable games machine for the foreseeable future (at least until Sony's NGP is released).

Below is a picture of the Pandora next to my 10-inch netbook.

Chris Thursfield

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Recipe: Beef And Guinness Pies
(makes 4)

Ingredients:

• 1/4 cup (40g) plain flour
• 800g beef chuck steak, cut into 3cm pieces
• 2 tbs olive oil
• 4 large brown onions, cut into thick wedges
• 3 garlic cloves, finely chopped
• 440ml Guinness draught beer
• 1 1/2 cups (375ml) beef stock
• 2 dried bay leaves
• 8 fresh thyme sprigs
• 1 sheet (25cm) ready-rolled frozen puff pastry
• 1 egg, lightly whisked
• Mashed potato, to serve
• Steamed peas or beans, to serve

Method:

1. Place the flour in a large bowl and season well with salt and pepper. Add the beef and gently toss to lightly coat with the flour mixture. Heat half the oil in a large flameproof casserole dish over high heat. Add one-quarter of the beef and cook, turning occasionally, for 5 minutes or until brown all over. Transfer to a heatproof bowl. Continue in 3 more batches.

2. Heat the remaining oil in the pan over medium heat. Add the onion and cook, stirring occasionally, for 5 minutes or until onion is lightly golden. Add the garlic and cook, stirring, for 1 minute or until aromatic. Add the beef, Guinness, beef stock, bay leaves and thyme and bring to the boil. Reduce heat to very low and cook, covered, stirring occasionally, for 1 1/2-2 hours or until beef is tender and sauce thickens slightly. Remove from heat and season with salt and pepper. Set aside for 30 minutes to cool slightly.

3. Preheat oven to 200 degrees C. Spoon beef mixture evenly among four 1 1/2-cup (375ml) ovenproof dishes. Cut the pastry into quarters and lightly brush with egg. Place a piece of pastry over each dish and use a small, sharp knife to cut a small slit in the top of each pie to help release steam. Place on an oven tray and bake for 15 minutes or until pastry is puffed and golden. Remove from oven and serve immediately with mashed potatoes and peas or beans.

Chris Thursfield

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