Sydney property bubble: The harsh reality

Andrew Bruce, Riverview Realty

Real Estate March Madness…

While there’s some talk we are in a property bubble, the harsh reality is that with 100,000 babies being born in Sydney each year, and the inflows of immigration into greater Sydney, it’s hardly any wonder why demand is exceeding supply. As we go into our 5th year of solid growth, what we are seeing is a paradigm shift in both the Sydney and Melbourne markets – Sydney is becoming a true global city and a destination.

Every property listed receives hundreds of email enquiries and there’s no doubt that demand is outstripping supply and will continue to do so in the years ahead. The mere thought of trying to find cheaper housing solutions within the Sydney basin is akin to trying to stop a tidal wave of demand. The banks have tightened their lending criteria for developers, which will have the knock-on effect of tightening supply even more.

We are in the very lucky position to have a number of really interesting properties listed ranging from brand new units in Kensington, to premium properties in Willoughby and Riverview, and mid-range properties in Riverview and Lane Cove.

For those looking for a renovation project or re-build, we have a property coming up in Greenwich very soon. We have more listings that are being prepared for market and encourage you to register your interest and join us on Facebook for real time updates.

The rental market fluctuates with good months and bad months. There’s low stock of houses in Lane Cove at the moment, however there is ample apartment/unit stock within the Lane Cove precinct with rents holding steady.

regards,

Andrew Bruce 

Riverview Realty is a boutique agency focused on achieving the maximum price, with a client engagement that is above the industry standard.  We call it the “Ultimate Experience” which forms part of our unique selling proposition.

Ph. 02 9420 0083, 59 Tambourine Bay Road, Riverview.

You’re welcome to connect with us on social media: 

 

Underquoting: Is it still alive?

I have recently approached the NSW Government Minister for the Office of Fair Trading to raise concerns over the lack of full transparency with when it comes to agent/buyer, and agent/agent discussions over the disclosure of sales results.  In “Will Underquoting Ever Actually Stop?” Sasha De Bilde states:

Whilst it is all good and well that the Office of Fair Trading has brought in major changes to what agents can say when it comes to the marketing of a property, in reality, nothing has actually changed. Not the fault of the OFT, obviously something had to be done, but the changes have made no real impact into the actual problem… ‘Under-quoting’.

Whilst an agent can no longer say “offers over” or put a ‘+’ symbol after a price, the truth is, the agents that were most guilty of doing it before are still doing it now – in a slightly different way.

I totally agree with Sasha. The total market is entitled to have a better understanding of the actual dollar values properties are being sold for at the time of sale, rather than waiting 3 months to get the information via the Lands Title Office when the information is out of mind and out of date.

Non-disclosure?

Some agents could be using blanket non-disclosure of nearly all of their property sales as a potential cover up of underquoting. While on the subject – when it comes to reporting of sales many agents are advising the public and buyers when asked the question “what did that property sell for?” with a response along the lines of “that information is confidential” or “the vendor has requested non disclosure of the sale price”. That has to be absolute rubbish as only about 2-3% of vendors have ever requested non-disclosure of the sale price with my sales. I took the liberty and personally checked the validity of other agent’s claims of non-disclosure with vendors of other agent’s sales. The vendor’s response was they had no knowledge of that arrangement or ever gave those instructions to their agent.

I have been in sales for 37 years and with some authority can say good sales people are more than willing to tell of their sales success results.

The last word on the subject:

This week I received a direct marketing piece in my letterbox from a large franchise agent who was proudly advertising the fact she sold a property over reserve by $360K. Well sorry, but one has to ask the question: Isn’t that a case of underquoting?

Or does the agent not have a clue on what they are doing? With a sale price of just over the $2.M mark and other recent sales in the area to support that sale price, well it does appear to be over the 10% range the office of Fair trading allows agents to quote in. Can agents get it that wrong? I will let you be the judge.

regards,

Andrew Bruce & Samia Malouf

Riverview Realty is a boutique agency focused on achieving the maximum price, with a client engagement that is above the industry standard.  We call it the “Ultimate Experience” which forms part of our unique selling proposition.

Ph. 02 9420 0083, 59 Tambourine Bay Road, Riverview.

You’re welcome to connect with us on social media: 

 

Local Property: Right Here, Right Now

At a recent Partners Wealth Group / AMP function, economists and advisors gave a brief and broad overview of the state of the global economy and its impact on Australia.

From a property perspective, Australia’s housing market is the most stretched in the world. There is an over-supply issue with apartments, but if interest rates level out or decrease further, this issue should work itself out. It was noted that China central govt is pumping a lot of money into the economy to drive more activity.

From a political perspective, they commented that Donald Trump’s bid for the Republican nomination is producing some uncertainty, however if elected, it appears he will have to play to the interest groups. It’s a line ball game between Trump and Clinton. So not much to worry about.

Global growth is difficult to predict, Europe is tiring but should bounce back. The question asked at the function was “If you had $100 where would you put it?” The panel noted European shares (but wait for growth) or wait for local interest rates to pick up.

In Australia we’re looking at a low interest/lower return for equity markets for some time to come which raises the question about where people will park their money?

Now is a great time to be selling real estate in Sydney. Stock levels are down by 25% and these low stock levels are still driving prices in an upward direction.

regards,

Andrew Bruce, Samia Malouf, and staff.

Riverview Realty is a boutique agency focused on achieving the maximum price, with a client engagement that is above the industry standard.  We call it the “Ultimate Experience” which forms part of our unique selling proposition.

Ph. 02 9420 0083, 59 Tambourine Bay Road, Riverview.

You’re welcome to connect with us on social media: 

 

Two of Sydney’s best-kept secrets

Two of Sydney’s best-kept secrets? No, it’s not Samia and I, it is of course Lane Cove and Riverview. Last Sunday, our thoughts on the local market were featured in Domain. Please see the story below.

click on the image above for a larger version

Lane Cove and Riverview are perfectly situated to advantage of close proximity to the CBD, Chatswood, North Ryde, and the Macquarie Park business district. Families and young professional couples make up the bulk of the local population, and enjoy a variety of local shopping and dining options, parks and outdoor spaces, and access to excellent private and public schools. Quick access to Chatswood and Macquarie Centre provides residents with greater shopping and entertainment options.

Due to recent development in Lane Cove, Lane Cove North and Linley Point, unit stock is in good supply. Housing stock has been in over supply for the spring season and will tighten up for Christmas and the New Year. Lane Cove house stock consists of three main property types: Original Post War, Original renovated, and new build. The price points for these homes are $1.8-$1.9m, $1.9-$2.5m, $2.7-$3.4m respectively.

Both Andrew and Samia have lived locally for over 20 years and believe Lane Cove and Riverview are Sydney’s best kept secret. There’s good buying at present. Who knows what is ahead for 2016? Recent commentary suggests low single digit growth next year.

regards,

Andrew Bruce, Samia Malouf, and staff.

Riverview Realty is a boutique agency focused on achieving the maximum price, with a client engagement that is above the industry standard.  We call it the “Ultimate Experience” which forms part of our unique selling proposition.

Ph. 02 9420 0083, 59 Tambourine Bay Road, Riverview.

You’re welcome to connect with us on social media: 

 

Effective real estate search?

We market a number of Riverview and Lane Cove properties, so you would think that someone searching for properties in Longueville and surrounding suburbs would see Riverview (the next suburb) when they widen their search to surrounding suburbs using www.RealEstate.com.au correct?

No.  When both us and our vendor tested Real Estate’s surrounding suburbs option, when searching Longueville properties, we saw, Balmain, Rozelle, Hunters Hill, Artarmon properties, but nothing for Riverview! Why is this important? Well you may think we’re just worried about our own listings (which we are of course!) BUT we’re concerned for all potential buyers who aren’t seeing all the possible properties bordering Longueville.  We are responsible to our vendors to ensure the maximum number of potential buyers view their property. RealEstate.com.au isn’t helping our commitment to our customers and is literally wasting the vendor’s valuable marketing dollars.

When we complain  to the REA’s customer service desk they take very little interest, don’t really understand the issue, and don’t want to do anything about it.  We just receive a diatribe of excuses as to why it cannot be fixed.

regards,

Andrew Bruce, Samia Malouf, and staff.

Riverview Realty is a boutique agency focused on achieving the maximum price, with a client engagement that is above the industry standard.  We call it the “Ultimate Experience” which forms part of our unique selling proposition.

Ph. 02 9420 0083, 59 Tambourine Bay Road, Riverview.

You’re welcome to connect with us on social media: 

 

Real Estate Agents: Trust in Results?

Don’t trust an agent who doesn’t publish their results on their marketing collateral.

I’m sure you’ve seen it. You check your mail box and find glossy post cards from local real estate agents. Despite all the words and photos of recent properties sold, the price of recent sales are nowhere to be seen.

There’s plenty of “New Street Record” or “Quickest Suburb Sale” headlines in these brochures but not much else.

The only thing we take seriously is delivering the ultimate experience to our clients.

When contacting these agents, there is the usual: “my clients haven’t provided us with permission to publish results” or “in the current environment we can’t release these figures.” They will of course be more than happy to do an appraisal or meet with you to offer “guidance” using other agents’ published results.

A search on Domain.com.au or RealEstate.com.au won’t help much with these agents, as they won’t post results their either.

Experience counts in a changing market. Sydney’s boom is returning to a stable growth phase and experience in such a market is extremely valuable. It’s easy for some agents to claim they have sold X amount of properties in the past month, but at what cost to the vendor? Did they underquote to the buyer? Did they work on the vendor to drop their sales price expectations and achieve a quick fire sale? They may have sold X amount of properties in a month, but were they at the best possible market price?  I would prefer an agent to dig in and work to achieve the best outcome for the vendor regardless of how long the process takes.

Some agents stand tall by their results. Evidence talks and pretty pictures walk.

regards,

Andrew Bruce, Samia Malouf, & staff.

Riverview Realty is a boutique agency focused on achieving the maximum price, with a client engagement that is above the industry standard.  We call it the “Ultimate Experience” which forms part of our unique selling proposition.

Ph. 02 9420 0083, 59 Tambourine Bay Road, Riverview.

You’re welcome to connect with us on social media: 

 

 

Sydney market doesn’t show any real let up

The latest data provided by CoreLogic, shows house price growth continued to surge in Sydney with capital growth of 18.4 per cent over the last year.

The question now is: Are we seeing the top of the market?

Especially after recent rate increases on investor loans and changes to loan-value ratios? APRA (the Australian Prudential Regulator) flagged to banks that investor lending growth that is over 10 per cent will be viewed as a risk indicator in considering whether further action should be taken.  With approval from the Reserve Bank, commercial banks have independently raised rates on new investor loans by between 0.27 per cent and 0.29 per cent. Many have also lowered the acceptable loan to valuation ratio (LVR) for new loan applications.

Sydney’s house price growth is not out of control when viewed over a longer time frame.

Debate about Sydney’s property boom bombards us almost every day, but as the chart from CoreLogic shows, even in Sydney, house price growth has been reasonable. An average annual growth rate of 5.7 per cent over the last 10 years is nothing to be alarmed of.

 

regards,

Andrew Bruce & Samia Malouf

Riverview Realty is a boutique agency focused on achieving the maximum price, with a client engagement that is above the industry standard.  We call it the “Ultimate Experience” which forms part of our unique selling proposition.

Ph. 02 9420 0083, 59 Tambourine Bay Road, Riverview.

You’re welcome to connect with us on social media: 

 

A new addition to the Riverview Realty team

Riverview Realty is pleased to welcome Gus Tanudji to the team.

Riverview Realty is pleased to welcome Gus Tanudji to the team.

Throughout a career in IT solutions architecture, which included a stint at Oracle, Gus always kept an eye on the property market. With a keen interest in investing, Gus regularly came across real estate agents (both good and bad) and realised he would like to contribute to the industry with open and honest service.

“I naturally love property, and am always thinking of ways in which a property can be improved from an investment or purchasing point of view. I was attracted to Riverview Realty due to my positive experience as a client. I always found Andrew Bruce to be very straight forward and open,” said Gus.

An Artarmon local, Gus knows the Riverview, Lane Cove, and Longueville areas very well. He brings a high degree of analytical and process-driven experience to Riverview Realty which will benefit the local community.

“I’m most excited about meeting people, helping people through what is often the biggest transaction of their life, and solving issues. Delivering a ‘no hassles’ approach to property is the key to good service and I look forward to working with Andrew and Samia at Riverview Realty,” said Gus.

Samia, Gus, Sue & Andrew – The Riverview Realty Team.

“We’re very pleased to welcome Gus to the team. His appointment comes at a time when our boutique real estate agency is growing on the back of providing authentic service to the local community,” said Andrew Bruce. “Gus’ knowledge of property and local connections will make him a great team member and valuable asset to our clients.”

regards,

Andrew Bruce & Samia Malouf

Riverview Realty is a boutique agency focused on achieving the maximum price, with a client engagement that is above the industry standard.  We call it the “Ultimate Experience” which forms part of our unique selling proposition.

Ph. 02 9420 0083, 59 Tambourine Bay Road, Riverview.

You’re welcome to connect with us on social media: 

 

No Property Bubble in Lane Cove

There was a very healthy turnout for one of our recent auctions in Lane Cove. There’s strong demand as a recent Domain article by Kate Farrelly suggests.

A strong turnout at one of our recent auctions.

With a swath of apartment developments under construction or newly built, there are plenty of units to choose from, but only nine houses on the market as Domain went to press.

So it’s little surprise that the median house price rose 19 per cent in the 12 months to March this year and now sits at $1,538,750, edging closer to the traditionally more expensive suburb of Willoughby, which has a median house price of $1.63 million.

Properties close to the newly upgraded village centre are keenly sought, with large family homes pulling record prices. There have been eight $2-million-plus sales over the past year, the highest in Little Street, which sold for $2,875,000 in November.

Locals like

It’s less than 10 kilometres to the CBD via the Gore Hill freeway and a short drive to the shopping and dining mecca of Chatswood. There are large expanses of bushland, including a slice of waterfront reserve, good primary schools and a growing choice of shops in the village and on Burns Bay Road, where a new IGA Express has opened its doors.

Andrew Bruce, Principal of Riverview Realty said: “We’ve seen massive price increases in the Willoughby Council area including Chatswood, Willoughby, Naremburn, and Chatswood West and it appears that some of this is rubbing off in Lane Cove with strong, above-market prices. The value-proposition of Lane Cove is finally being understood.”

Bubble?

Riverview Realty auction time in Lane Cove.

“There’s a lot of talk in the market of a bubble, but according to Alan Kohler’s Eureka Report the Sydney market is about 14% above the historical trend line. What we’ve seen is not your classic property boom as it is now going on three years and it’s been front of mind for quite some time. According to recent reports, housing is set to grow by low single digits next year, suggesting a softer landing as opposed to a crash.”

“It would be fair to say that within the property clock cycle, we are coming up to the 12th hour.”

regards,

Andrew Bruce & Samia Malouf

Riverview Realty is a boutique agency focused on achieving the maximum price, with a client engagement that is above the industry standard.  We call it the “Ultimate Experience” which forms part of our unique selling proposition.

Ph. 02 9420 0083, 59 Tambourine Bay Road, Riverview.

You’re welcome to connect with us on social media: 

 

 

 

Scaled Commission: Don’t be mislead

Be wary of a scaled commission approach

Following on from my previous blogs on setting the right expectations, we have heard that some agents, who are over pricing properties to get listings, are also combining a scaled commission approach with the offer.

This may seem reasonable and in some cases scaled commission is normal, but when coupled with over-pricing it becomes a “dodgy” sales technique to mislead the vendor in an attempt to validate the potential for the agent to achieve the highest and most ambitious price promised in their appraisal.

If we peel back the layers of this offer, the difference between the base commission and the higher end commission is only a matter of a few thousand dollars to the agent and structured so that no matter what the property sells for the agent is basically getting close to his full commission anyway.

In the end, the vendors get their expectations reset to the lower sale figure and are “short changed” on the promise of a higher sale price that was never going to materialise in the first place.

Recruit your agent carefully.

Andrew Bruce & Samia Malouf

Riverview Realty is a boutique agency focused on achieving the maximum price, with a client engagement that is above the industry standard.  We call it the “Ultimate Experience” which forms part of our unique selling proposition.

Ph. 02 9420 0083, 59 Tambourine Bay Road, Riverview.

You’re welcome to connect with us on social media: 

 

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