The “clearance rate” continues its course towards 50% and there were only 840 total sales last weekend. The government is talking more gloom and doom than the media and the “R” word is being talked about more openly than the previous whispers in the corridors of our politicians.
Interest rates around the world are dropping sharply; our own Reserve Bank dropping 0.75% off the cash rate and the Bank of England 1.5% last week. Our big banks are grabbing a small slice of the profit each time the reserve does this. Most of the banks passed on 0.58% – 0.65%. If the banks continue to profiteer on each deduction the Reserve makes, the government and the Reserve Bank will need to come up with another solution to stimulate the economy.
It can also be said that, whilst most people that were polled by the Herald Sun today, wish to see a drop in Australian immigration, more and more people are still travelling to Melbourne from other states and settling in the “Most liveable city in the world”. This is continuing to put pressure on our infrastructure, our accommodations and our property prices. With more and more people looking for houses either to rent or buy, our demand for housing is still rising. Our supply, whilst slowly increasing thanks mainly to the First Home Owners Boost, is still falling short.
All of the above factors will lead to an increase in housing prices and will make it nearly impossible for future generations to afford to buy property. In the market under $700,000 we can see that every well located property, that is presented well and marketed accurately, tends to sell very well. We attended an auction in Murrumbeena on Saturday that was a great 2 bedroom villa unit, in an excellent location. 9 different people bid on this property and it sold above where it should have. The Agents, Gary Peer and Associates, did a good job on behalf of their vendor. Another property we purchased on the weekend in Northcote was bought under the hammer just shy of $700,000. This property was extremely well located and presented and had several potential purchasers.
The first home owners grant is beginning to kick into play. Good properties around $300k – $500k are becoming scarce. If you can get into the property market, now is the time to do it. “Find” the right property, “Assess” it accurately and then have a professional “Negotiate” it for you. The best properties will not be bought without competition, nor will they be given away by the Real Estate Agents.
JPP is running another seminar with information available to First Home owners and Investors. It is being run this Thursday evening at the Glen Eira Town Hall. Places are limited so please follow the link to book your seat.
Ian James