More surprising, however, was the fact there were only 488 private sales called in to the REIV. This is very much lower than the same weekend last year. I thought it was also notable that of the four properties we purchased over the weekend, two were purchased prior to the weekend and the other two were negotiated after passing in.

Most open for inspections for properties under $700k were very well patronised. I think there are a lot more people out looking this year. After last year’s drop in turnover, in some market segments the numbers of sales were down as much as 30%, I believe a balance is likely to occur this year. No matter what the market is like, no matter what economic or political issues are prevalent in the papers, people still have to buy and sell a certain number of houses. There will always be births, deaths, marriages, divorces, people moving for jobs, or lack of a job. These people must change their accommodation needs and this means that sales of properties will occur regardless of external forces. This year we should see those people who had put off changing residence last year, making their return to the market this year and this will increase turnover above and beyond what market trends will allow.

Anecdotally there are more people in the market place than last year. If the supply does not grow to well above last years totals, we will see prices rise. This will have nothing to do with economic outlooks, both good and bad, it will be all about supply and demand. If price goes up, more vendors will enter the market and this will cool things off a little. If supply is flooded then prices will ease, however vendors will again withdraw from the market place and we could see prices move accordingly.

This year the market will be overall flat when looking at a macro level. Melbourne statistics and even suburb statistics will not give a full picture of the market. At a micro level I believe prices will be all over the place. The volatility will be at an area level. For example, when talking about Glen Iris and the 4 distinctly differing areas within, price will come down to choice within these quadrants. A lot more so than in the past. I believe there will be a higher level of scrutiny of the properties on the market than ever before. And it will not just be looking at comparable sales; it will be looking at the volume of sales of this type in this quadrant. In other words, if I miss this one, how long will it be before I get another chance at something like this?

Conversely, if there are multiple properties on the market at the same time that are similar, and in the same distinct area, and understanding there is a limited demand, the smart agents will be doing deals before auction. The statistical analysis we are used to seeing in the papers and online will not differentiate this. In fact the clearance rate includes all those properties that are sold before auction.

Overall there may be bargains out there this year, but more than likely if you pay a reasonable price for a good property you will do quite well over the coming years. If you are considering purchasing this year, please feel free to book an appointment. There is no cost, nor obligation at our first meeting.

Ian James
Director
JPP Buyer Advocates

Two of the big four banks raised their standard variable rates (SVR). Westpac and ANZ increased their SVR by 0.1% and 0.06% respectively. Commonwealth and NAB may do the same this week. As far as these behemoth companies are concerned, the more we pay the more they will take. Most manufacturing businesses are reducing profits to keep afloat, most small businesses are keeping their doors open by cutting their own wages and retailers have been hit even harder. Although it is not only the banks gouging ever greater profits, the world economy is playing havoc here as well. The Australian Dollar at well over $1.06USD means all our exporters are struggling to compete with overseas markets.

What does this mean to house prices? We need to consider that the vast majority of people in Australia and especially Melbourne are employed and are actually paid very well. We can look at the fact there is a greater number of people being born than those that are dying and there is a greater number of people moving into Melbourne than are leaving. If we built enough homes to cover this population increase then property prices at the moment and in the short term would remain flat. However, we are not building enough homes to keep up with demand, let alone catch up with the shortfall. It means that in the medium term (approximately the next decade) you can safely assume that property prices in the top third performing suburbs in Melbourne will more than double their current value. We also know that Many Billions of Dollars are going to spent in Australia this year and for the next three years in the mining sectors. This money will flow back to individual Australians and they will spend a percentage of this on accommodation.

We can easily assume that rents will most likely increase by around 6% p.a. and therefore take a little over 10 years to double. Rental vacancy rates have grown last quarter, with the REIV saying that 4 out of every 100 properties are now awaiting tenants. The rental situation will be alleviated by further high density development over the next decade. There will be a lot more people looking for rentals and I believe they will become less fussy. They will live in smaller apartments in high rise and high density living environments.

To the average person who has been saving, potentially with a partner and are now in the market for their first home, or a family that is running out of room in their first home and are looking for something bigger, and have been waiting for the right time to buy: This year will probably be that time. Many people avoided getting into the market last year. Most companies offering housing statistics have all said the market was down almost a third in turnover last year. This would normally mean there will be an increase in turnover regardless of market forces (ie a catch-up on those that did not purchase last year)

Last week we talked about what property to choose, the week before about how to accurately assess the property you wish to buy. There are four main areas you need to think about when purchasing property. What to buy, where to buy and how to find it, what’s it worth and how do I negotiate with an experienced Real Estate Agent. I will talk about all these areas and break them down into great detail over the next few months. These articles will be written alongside my market comments. If you have specific questions about real estate please do not hesitate to leave a comment or email directly and I will endeavour to answer your questions.

Ian James
Director
JPP Buyer Advocates
www.jpp.com.au

I do not know what will happen in Europe through 2012. I do not know whether the US will get out of their woes. Don’t forget it’s an election year over there!! I also don’t know whether the banks will pass on any interest rate changes that the Reserve Bank makes on Tuesday. What I do know is that everyone; vendors, selling agents, financiers, buyers and even politicians are quite nervous. Everyone is trying to work out what will happen next week. But it isn’t next week, nor next month that should be the focus of the buyer. It is the next decade. And unless our population stops growing, which is the one thing Australia cannot afford, then property prices in the top third of suburbs in Melbourne will most likely double.

A buyer should, however try to mitigate risk through reducing drains on cash flow. It is very unlikely you can buy revenue positive in the top third of suburbs in Melbourne, however you can get close to revenue neutral, especially if we get one or two more rate cuts. Looking for homes that will offer good rental return as well as a reasonable depreciation will assist you toward revenue neutrality. BUT this comes at a cost. If you eventually sell the property the depreciation is added back to the Capital Gain that you will pay tax on. So whilst the deduction has made life a little easier along the way, if you have chosen a property specifically for its massive depreciation, and it did not have a good capital growth, you will still be taxed when you sell and the growth will not be as good as it could have been.

Many property spruikers will tell you to buy off the plan or brand new in Mining towns. The reasons will be compelling. They will show you spread sheets and graphs. They will tell you the tax benefits are fantastic. You will actually get a few dollars a year back to you from the rent before you pay the expenses. These all sound good but when you go to sell all that depreciation on the building and goods within the property gets added back to the CGT equation. It is imperative that you seek good financial advice prior to purchasing any investment property that seems too good to be true. It probably will be!

Property area choices for investors can be simple as those for owner occupiers. Both should buy where owner occupiers want to live. Owner occupiers drive prices up. Investors only drive up rents. It can cost a little more to get into an area where there will be competition from those who may have an emotional attachment, but in the long run, when you go to sell the property or better still, refinance it, you will have achieved a much higher capital growth.

Once you have chosen the location, then you need to break down the suburbs into areas. For example there are 4 distinctly different sections of Camberwell. These areas have different property styles, such as period homes circa 1900, 1930’s Art Deco and Spanish influenced Californian Bungalows up to sections where a lot of contemporary homes are. There are differences in dollar per square metre prices, as well as land sizes. It is important that you have decided which style you want, and that it suits both your budget and your reason to purchase and that the area supports this. It is no use looking in an area that the land suits your budget but does not have any Californian Bungalows if that is the style that you like!!

Property choice is not all about rental returns; it is not all about capital growth. It is not all about working out what land you can afford, then hoping to find the house of your dreams if the style is not prevalent in the area you are looking.

It is always a good idea to get some help when making the biggest financial decision of your life. Some forethought and an experienced Buyer’s agent will not only save you a lot of money, but also a lot of wasted time and energy that could be better spent with your family and friends

Ian James
Director
JPP Buyer Advocates

The town planner talked about due diligence which was all good and well. He gave advice similar to: Talk to council to work out whether the area can be developed, and into what. Is it an area that will allow for high density etc. All very good advice! He did eventually get around to talking about the “plus” as being up to or more than 20%, however he also said he didn’t put too much stock in what the agent said. It was really worth what others will pay.

There are four main parts to buying property in Victoria. Working out what your needs are, searching and identifying possible properties, assessing target properties accurately and finally successfully negotiating the sale.

Today we will talk about assessment, which is really what the caller was asking the town planner to do without even seeing the property. There are many options when it comes to assessing a property that is for sale.

Many people will say to look at the papers, or buy information on line to get sales results. This is fine if all the sales in the area were auctions. In the State of Victoria, resellers of real estate information cannot identify the private listing past Street and Suburb. Numbers are not supplied. So, if you know that a property sold in Smith Street for $800,000 and another sold for $400,000 you still do not know what the difference is.

You can do this if you are diligent. You must physically take note of every sale. If you are looking to buy in “Smith Street” then you need to look at every property that is on the market and when it sells try to identify the property and then it becomes useful. You need to look at every paper, every website and all the online sellers of information. This will still only give you some idea as historical sales over the last 2 years will be difficult to gauge without street numbers. But it can be done. It is extremely time consuming and tedious. But if you have three to six months to build up a local database then it will be useful.

The actual sales price is only the first step. You need to visit as many of these properties as possible. You need to segregate your data into properties that have valuable houses on them, properties that have recently renovated houses and properties that have houses with renovation options. You then need to look at individual land sizes. Is there a development option? Is there an option to rebuild a new home, renovate the existing home whilst subdividing the block? Is it a corner block that is easier to renovate, what is the street frontage (properties that can be split with both new dwellings having street frontage are more valuable than those which are split front to back) What you are trying to do is calculate whether a property was sold for “land value” or was there some additional value in the house.

When there is some additional value in the house you need to look at how many bedrooms and bathrooms, car accommodation, quality of fixtures and fittings, particularly in the bathroom and kitchen. How big are the individual bedrooms, is there a flow to an open floor plan or is it a compartmentalized rabbit warren. You need to look at these questions with each individual style of property in mind. If we are looking at a Victorian home, we know that the bedrooms will be of good size, at least 3m x 3m. The ceiling heights will vary from 10ft to 16ft and if there has been little renovation the bathroom will be at the back of the house and the kitchen in the middle. Because this is how they were added over time. A structurally renovated Victorian home should have the bedrooms at the front, followed by bathroom and hopefully ensuite, then the kitchen and an open plan living zone leading directly on to the outdoor entertainment area. However, you would not expect a 1970’s “Estate Style” home to be set up this way. In fact the master bedroom is usually near the front with the others to the rear. A big house would have an “L” shaped lounge/dining room with a large central kitchen. Unfortunately, these houses usually have limited rear access unless a further rumpus room has been added and then it would be good to see the outdoor entertainment area run off this.

Finally, you need to put all this together to try and guesstimate what someone else is likely to pay.

If you do not know what someone else is likely to pay then you will waste almost a month of your time and effort waiting for the auction, waste money getting pest and or building inspections done. Waste money getting the contracts checked by a solicitor and then when auction day comes around and the auctioneer is calling for opening bids and you have a figure in mind, DO YOU REALLY KNOW WHETHER YOUR NUMBER IS ANYWHERE NEAR ACCURATE.

You cannot use the agents estimate to work out what a property is worth. The “plus” does not mean 10% or 20%. When a range is quoted it does not mean the reserve is within these numbers. The selling agent does not need to, and actually cannot give you, any assistance that would be seen to be to the detriment of getting the highest possible sale price for his client – THE VENDOR. Some agents will quote high and try to negotiate from this point; others quote low and will try to push up a potential purchaser. Your best negotiation tool is to have an accurate appraisal of what someone else is likely to pay: ie your competition.

When it comes to purchasing a property there are actually three numbers we need to calculate or guesstimate. What is it worth to us? In other words how much are we happy to pay for this particular property. Secondly, what is it worth to someone else? In other words, what is likely to happen on auction day? And thirdly, and by far the most difficult, what does the vendor want!

Once we have these numbers we can then begin to set up a buying strategy. We will talk about different buying strategies at another time. You can get an accurate assessment of a property from a experienced and licensed Buyers Advocate or a Valuer. You need to engage them and pay them in order to guarantee they are working for you.

Ian James
Director
JPP Buyer Advocates

What we do know is that over the next decade property prices will double. People have to live somewhere, whether they buy or rent; after food, housing is the next most important item for any person. And whilst high end property prices may stagnate for a few more years, the lower to middle range median properties in good suburbs of Melbourne will begin to grow as our population does.

If you are purchasing a property this year you will need guidance. It is an appalling situation that our Government does not adequately warn purchasers of their rights when purchasing property or the need for good counsel. But then it is not in the State Government’s best interest to assist purchasers in any way. The more somebody pays for a property the more stamp duty the government collects.

Anyone spending $200,000, $500,000 or $1,000,000 should get assistance from a licensed Real Estate Agent who is acting in their interests to help them make their purchase. In most situations of sales of property in Victoria, only one side of the most important financial decision of your life, has counsel. And our government does not care. In fact they probably prefer it this way.

If you went to court to fight any type criminal or civil case and one side has counsel and the other does not, you would be counselled by the presiding member of the court. The proceedings would be halted and you would be asked if you would like legal counsel, and you would be given time to organise it.

When you are purchasing property the opposite occurs. You are actually led to believe the selling agent is there to assist you. The agent is usually very polite and very nurturing. Asking you what your needs are and also what special conditions you would require on an offer. They will then tell you they will write up an offer for you. They are under no obligation to explain to you when a three day cooling off period begins. In fact if you read the “Consumer Affairs website and look at the case study, “Buying by Private Sale” you can see that even the Government website can make errors. The example explains that the purchasers have made a written offer (signing the contract) and the next day the offer is rejected, they make a further written offer and then another verbal offer which is accepted. They sign the contracts two days later. Consumer affairs then say they have three clear business days to “cool off” This is absolutely incorrect. The cooling off period of three business days starting the day following the first written offer. The agent has very smartly used the purchasers cooling off period up during the negotiations.
www.consumer.vic.gov.au

Selling agents are under no obligation to write a special condition for a pest and building inspection that will allow you to exit the contract if these inspections are not satisfactory. In fact they are obligated to try to persuade you to have very soft conditions or none at all if they can. A standard clause written by most selling agents for an offer to be subject to a building inspection, will usually say that a purchaser can withdraw if there is a major structural defect. This doesn’t help if there are massive issues with the property that will costs hundreds of thousands of dollars to repair, but cannot be deemed structural issues! There has already been one court case in Victoria over what actually constitutes a major structural issue. A good buying agent will include a building clause that can allow a purchaser out of the contract if he is not “satisfied” with the report.

The selling agent is being paid by the vendor to get as much money out of you as they possibly can. THAT IS THEIR LEGAL, CONTRACTURAL OBLIGATION.

How good a negotiator are you? How many properties did you purchase last year? The selling agent may have been involved in hundreds of negotiations. They are usually well qualified and trained in property negotiations. If you attempt the negotiations yourself, you could be throwing money away.

If you are considering purchasing a property this year, you should seek the advice of a qualified Buyer’s Advocate. The agent should be licensed, a member of the Real estate Institute of Victoria and have at least five years real estate buying experience and selling experience before that. You can find out how long an agent has been working in the industry by going to the Business Licensing Authority website and looking at the Real Estate Agents’ list.
www.online.justice.gov.au.

Ian James
Director JPP Buyer Advocates

Exactly what will occur this year is anyone’s guess. There are many different variables that will all compete and complement each other in the movement of the housing market for 2012. We can also look back over the last decade to see what movement there have been in house prices.

Last year saw the introduction of monthly statistics for median house prices in Melbourne. We now get bombarded with media comment telling us our properties are going up and down in value each and every month. What’s next? Will the statisticians try to put the median house prices up every night on the news with the “All Ord’s” index??? House price trends should be measured in years not hours!

Over the past decade house prices have achieved excellent returns with capital growth in Melbourne at or exceeding 10% p.a. over the past 10 years, and similar over the past 5 years. Even last year over the 12 month period there was still a growth in most suburbs in Melbourne. Add this to the rental return (yield) then you have a very good performing asset; whilst the same cannot be said for average stocks on the Australian Stock exchange. The “all Ordinaries index” has shown a 2.5% growth over the decade, it has been in negative territory over the past five years.

The convergence of so very many financial factors will make predictions the most difficult for the next twelve months. However, with the mining investments beginning to build this year until about 2015 I believe house prices will increase about 8% – 10%p.a. in Melbourne metro areas over that same time frame. I think it will be a slow climb before a very big jump that will start with a catalyst. The jump will be similar to 2007 not 2010, where the climb will be relatively uniform but quite a sharp increase from the flat market of last year.

The catalyst could be anything from a sharp drop in interest rates to a special economic factor out of the U.S. or Europe. For example, the European debt crisis is resolved, or the U.S. economy has a dramatic recovery. It is at this point in time you will make very good money from the properties that you already own.

Properties to target this year should be apartments close to the CBD with strong rental returns and good depreciation prospects for those on a high income. And also properties with development or value add options that have good land components in suburbs with excellent infrastructure.

The real estate market in Melbourne is just beginning to fire up with agents returning from Christmas holidays to find plenty of people interested in seeing what’s new. If you are in the market for a property this year please feel free to call for an appointment and we can have a chat.

Regards

Ian James
Director JPP Buyer Advocates

As we move towards the summer break from weekly auctions, we enter a far more difficult season of private sale negations. Many vendors will decide very soon that they have had enough and just want to get a sale happening. Many vendors will instruct their selling agents to re-canvass interested parties, especially those that showed interest but price became a factor. You may find that a property you were interested in but was too expensive for you suddenly has a massive price drop or the agent calls you and says the vendor needs to sell!

There are a few things to remember about putting further offers down on the same property over the Christmas hiatus. The main one is to remember what your cooling off period is. Everyone who places an offer on property in the state of Victoria gets a 3 day cooling off period with some notable exceptions. Neither land that is used primarily for industrial or commercial purposes nor land that is more than 20 hectares and is used primarily for farming have any cooling off.

There are 4 other exceptions that you must understand regarding cooling off. You do not get a cooling off period if the property is sold by publicly advertised auction. This includes three business days prior and three business days after. This is not as much of a worry over summer break as there are rarely auctions, except on the peninsulas. You also do not get a cooling off period if you are an Estate Agent.

The main two exceptions you have to think about are as follows. Firstly, if you receive independent advice from a legal practitioner before signing the contract you do not have a cooling off period. Secondly, if you have previously entered into a contract for the same land with substantially the same terms, you do not have a cooling off period. This means that if you had previously made an offer and it was turned down and now they are going to consider the same offer, if more than three business days have passed since your first written offer, then YOU DO NOT HAVE A COOLING OFF PERIOD. You may have made the offer in November and it was turned down straight away. If you didn’t bother to get the documents checked and then made the same offer on the same property sometime in January, it would be an offer without cooling off.

The other thing to remember about legal advice in January is it is sometimes difficult to get. Solicitors have holidays as well.

Finally, you need to understand when the cooling off period begins. The law is very clear; you must rescind the contract within three clear business days after the PURCHASER has signed the contract. In other words, when the offer is made not accepted. Many times during negotiations the initial offer and subsequent negotiations have taken well over three days. Once you have formally put forward a written offer, GET THE CONTRACT CHECKED BY A LEGAL PRACTITIONER.

If you are considering a purchase in January our office will be manned or the phones monitored tight through the Christmas break. If you require assistance, please call the office 03 9523 1054 and we will try to assist.

Ian James
Director JPP Buyer Advocates

I wrote last week about where property prices will go over the next decade and that for all intents and purposes it is a “no brainer”. We did have the usual comments from people saying that I have no idea what I am talking about. However, not one response offered any other alternative, or even any factual response. In fact the Valuer General data for the June Quarter was released last week showing that house prices increased in the Melbourne Metropolitan area by 2.2% from the previous quarter.

The median house price has risen from $489,000 in March to $500,000 in June. Volumes are however at the lowest quarterly level since June 2009. It has remained unchanged from the median of the same quarter last year. These statistics are not educated guesses or samples of less than 10% of the market. These numbers are a statistical analysis of all the sales collected by the Valuer General of Victoria.

Unit prices have also risen this quarter: up 2.4% on the previous quarter. But the number of sales last quarter was 5353 and the same period last year had 7969 sales.

The biggest movement was vacant land sales. Down in numbers by a whopping 65%, the numbers in the same quarter last year were 5249 and this year are 1848. However, the median price has moved from $185,000 to 213,000. This is a 15% movement.

Tomorrow the Reserve Bank will try to read the tea leaves and have to decide whether to decrease the interest rate again or remain on hold and see whether Europe actually implodes. Further to this, the banks have had a credit rating cut and suddenly their multi-Billion dollar profit margins might be pulled back a touch. Even if the RBA decides to cut 25 bps, there is no guarantee it will be passed on and therefore may be of little use to consumers anyway.

Now throw in the housing figures above. Mining is still surging ahead with investment, retail sales figures were up 0.6% and even some investment into our manufacturing industry was welcomed last month.

I do not think the RBA will cut interest rates tomorrow. I think they will “keep their powder dry” and if the need warrants, will drop 50 or 75 bps in one hit to make sure a substantial lowering of interest rates hits the consumer.

Early next year investors will re-enter the property market. Renters are already having a difficult time finding accommodation, and rents will increase steadily next year. There are still many potential tenants offering over and above asking price for rental accommodation. When we do see a cut in interest from the Reserve Bank, and loans are available around 6.5%, there will be a veritable flood of investors pushing prices in the range of $400k – $700k upwards. For an investor with good equity, who can borrow 106% for an investment property, the shortfall can be as low as $4500 for the year to purchase an excellent long term growth property in Metropolitan Melbourne.

I am not talking about off the plan sales in some mining town in the middle of nowhere where capital growth is usually non-existent, or an apartment block of several hundred, some of which are never even built. I am talking about established A – grade properties within 10 km’s of the CBD. And if the interest rate were to fall to 6% then it is nearly revenue neutral.

2012 will see the slow but steady rise in values, of both houses and units in Melbourne. This assumes our interest rates do not go up, our unemployment rate stays around the same as it is now and Europe remains a mess. If rates drop, unemployment goes down and Europe works out its problems, then our property prices will very quickly revert to a growth near 8% p.a.

The next couple of years will be very interesting for property buyers. If you are interested in buying a property and what some assistance please do not hesitate to call for an appointment

Ian James
Director JPP Buyer Advocates

When that proves wrong, there is no change to the media’s view point, we just wait for a year or two and then put the same experts back up with a different set of “proofs” and again champion their “expert.” Two years after the first academic to say the market is falling 40% we have more people saying the same thing.

The Valuer General figures show that Melbourne’s median house price between 2008 and 2010 moved up 12.66%p.a: the opposite direction to the experts’ opinions.

Earlier this year some of the same academics, and a few others that had a vested interest in luring people away from the Melbourne property market, began running with the “property prices to drop 40%” line again. This time with the global economic woes firmly entrenched on the front page of every paper, some people began to believe a 40% drop in property values was possible. The Valuer General tells us that the Melbourne median house price actually grew 1.8% from March 2010 to March 2011. These are real numbers! These are genuine statistics that are collected from people who pay stamp duty of property transfers. Basically it is accurate data.

Over the weekend I heard one of the TV stations running with the line, “The property market will drop 25%.” This is plausible, if you are assuming it relates to volume. I do think the turnover of properties will drop. If you think it relates to price, then there is no evidence this is actually happening. In fact if volumes keep dropping, and the better properties are more tightly held, I know which way property prices will definitely go over the long term. They will Rise and rise faster than they have in the past.

Australia is called the lucky country, and although we have dreadful fires, floods and all kinds of natural disasters, we still live in one of the best countries on the planet. And you will not get that much argument from many other people around the world. Our unemployment rate is the envy of every country on Earth. Our natural resources put Australia at the forefront of world economies over the next 20 years. Our only major problem is our lack of population. We should be striving to double our population within the next 40 years. Net migration should be allowed to increase to facilitate a reduction in skills shortages that our great nation has.
Global economic woes and another credit crunch will stifle property price growth in the very short term. But with our economy booming along relative to the rest of the world, our unemployment rate is almost a little too low, creating a skills shortage, and the outlook throughout most of Asia looking very good, I think people, in general, will feel comfortable to settle down and make a long term property purchase.

With a shortage of houses where people want to live, with the building industry slowing down in the wake of First Home Owners grants drying up from their peak in excess of $30,000 and with the population growing at a rate nearly twice that of the world averages, I cannot see how the humble Supply vs Demand economic rule will not prevail.

House prices over the next ten years will most likely increase at a rate equal to or greater than the last thirty years. Properties are not overpriced in this country. Australia is setting new benchmarks for global prosperity and people from all over the world will want to live here. And they will pay for the privilege. Expatriates are returning home from overseas to ride out the GFC. Many of whom are happy to purchase property here at very low prices comparative living in major capital cities around the world.

The media tend to report “Gloom and Doom” because it markets better than a “steady as she goes!” story. So here is a little gloom and doom for you. Over the next ten years property prices in the Melbourne will reach record highs and it will be just about impossible for first home buyers to even enter the market. For those of you who want your children to have the best possible start in life, think seriously about buying a property within the next decade for each of your children and setting them up as an investment property. Property prices will double within the next ten years across the top third of suburbs through Melbourne.

Ian James
Director JPP Buyer Advocates

16 Gowar St Camberwell
A 4 bed 2 bath fully renovated Cal Bung on excellent land. It is in one of the prized sections of middle Camberwell near Frog Hollow Reserve. Flogging rain caused an inside auction with about 30 people
Opening bid 1.45m was a vendor bid. Asking for 10k, after receiving No bids auctioneer called the half time break He came back out and offered another Vendor bid 1.475 before the eventual pass in.
The agent was chasing something in the $1.5 – $1.6M range. The published reserve was $1.55M
This property last sold in 2007 for $1.471M and yet no interest at this level now

41 Highfield Rd Canterbury
Again flogging rain caused the auctioneer to have the auction indoors in front of about 30 -40 people
Asking $1.35M – $1.5M
The 3 bed 1 bath fairly dilapidated period home has 2 living zones and garaging for 2 cars. The advertising blurb read “This original period style home set on the corner of McGregor Street and Highfield Road, offers outstanding value and exciting potential to extend and renovate, build a new luxury home or 2 stunning townhouses (subject to council approval).”
I would class the house as having little value.
As the auctioneer went through his usual spiel, and began talking about the merits of property development, calls from the audience directed at the auctioneer during the preamble set an ominous tone: Hecklers from within the small group of onlookers were saying that the council has said this property cannot be knocked down. A further audience member said that the overlay was on ¾ of Canterbury.
The auctioneer handled himself quite well by saying that if the successful purchaser wanted to renovate or develop the block that it would need to be approved by council or VCAT.
There were a few more exchanges and then the auction started
With the auctioneer beginning proceedings with an opening vendor bid of 1.2m we were underway.
Asking for 20k it wasn’t long before he had a genuine bid of $1.22M
With nothing else forthcoming, the auctioneer called the half time break
After coming back out, the auctioneer decided to one final Vendor Bid to $1.240 and the original bidder very smartly remained quiet and allowed the property to pass in. The reserve was listed today as $1.35M
The vendors may have trouble selling this if there is a concerted effort by neighbours to express vocal disapproval of any development. It seems quite sill as it is a corner block on a fairly busy road. To me it seems sensible to develop this type of property into two townhouses!!

Ian James
Director JPP Buyer Advocates