Units catching up on detached properties

From Rpdata.com’s national research director Tim Lawless: Over the five years to June 09, units around parts of Australia have rallied to take on detached housing for capital growth. Historically, home buyers and investors believed that houses would always outperform units, and that the underlying value of the land associated with a house is the real driver for capital growth. However, over the past five years Rpdata's results prove that there has been little difference between the two property types, based on the rate of capital growth

Competition

I am writing this while watching Insight on SBS, about competition in the market place, discussing the impact of Woolworths, Coles, and increasingly Aldi. It all makes me realise how lucky Beecroft is to have just Franklins, our friendly neighbourhood supermarket. Somehow Franklins fits in well with the whole ethos of the Beecroft village shopping centre. Thank you, Franklins!

I hate web sites that con you!

I found an interesting sounding site on Google, and clicked it. Up came the offer "Find Agent", and "Find the right agent. Enter your post code" and a four digit entry window. Interested to see which of our local agents they would recommend, I typed in my post code, and all I got was an opportunity to register with SellmyCastle.com.au.
There was no response at all to my request to find the right agent!
Just for fun I went ahead and registered, which meant entering all my house details, and now I await the results.
It infuriates me how some sites use such gimicks to suck you in. If they are not going to attempt to tell me "the right agent in your post code" then why have that offer on their front page?
Oh, and it's not just on the front page. Further into the site I found a finance page, and again was invited "Find mortgage broker" and again "enter your post code" and a four digit entry window. And guess what? Entering my post code had no effect at all, just another invite to register with them.

West Pennant Hills drug house

Almost half-a-million-dollars worth of cannabis plants were seized earlier this month during a police raid on a hydroponic house in West Pennant Hills. Power company technicians disconnected an illegal and potentially dangerous link to the mains supply.
To show this wasn't a one-off, Pro-Active Crime Team officers also seized 205 cannabis plants with an estimated street value $420,000 in a raid on a house in Parkland Road, Carlingford, on July 30.
Property management officers need to be on the lookout for suspicious indoor gardens with unusually powerful lighting systems!

How Australia Escaped Recession?

Ross Gittings of the SMH makes an interesting point in today's Business Day. "Rapid growth in Australia's population has held up the economy." In the year to March, our population grew by 2.1%, the fastest in 40 years. What that means, of course, is that if GDP per head is considered, you need a rise in GDP in excess of 2.1% just to hold your position. On that basis, our GDP fell in three of the last five quarters (ie recession!), contracting 1.5% in the last 15 months.
Ross's point of course is that all this population increase requires investment in infrastructure to support the newcomers. Ross makes the significant point that while it's the Federal Government that decides to increase immigration, it's the state governments that will have to provide roads, hospitals, schools, etc to accommodate the new arrivals. And any failure to make sufficient land available will push house prices even higher.

Auction Clearance Rate Dips

Last Saturday the residential property auction clearance rate fell to 62%, off from early 70% plus sucessess. This was the steepest decline among the last five record weekends.
Average sale price in Sydney inner west was $842,000.
Northern beaches and upper north shore recorded below average 55% clearance rates.

"Death of Democracy"

Great slogan, let's hope the organisers of the protest can use it to make some progress! The Sydney North Shore protesters claim the NSW government planners are ignoring residents, taking money from developers, and turning pleasant communities into high-rise concrete jungles. Some 1500 people joined the protest and passed a resolution calling for local planning rights to be restored. NSW Planning Minister Kristina Keneally was invited to speak at the protest but didn't show.

Concern about NSW rents

The NSW Government intends to increase public housing rents for single aged-care pensioners by $7.50 a week, which is about 10% of their typical food budget. The justification for the increase is that the Federal Government is increasing their pensions by $30 a week.

First Home Buyer loans grow

SMH Business Day reports that the average loan size of new home owner loans was $269,100 in July, up from $246,500 same month last year. By comparison the average loan size for all owner-occupied housing this last July was $266,900. New home buyers are taking a third of all new mortgages, compared with 20% before the introduction of the recently introduced incentives.

Aldi made profit

Aldi announced a $72M profit last callendar year, and says it is expanding by adding another 25 stores each year alont the east coast.

New Mortgage Group?

SMH Business Day reports that Macquarie Group is setting up a new collection of mortgage brokes with the aim of increasing competition in home lending.

Foxtell Free to Air Channels

Foxtel changed the frequencies of some channels recently and got it a bit wrong, and many customers have lost free-to-air. Apparently they need to make some changes to the feed to our area, after which all should be fine.

It's all in how you say it!

An email is going the rounds describing how US Congressman Harry Reid responded to a journalist's enquiry about his great-great uncle, Remus Reid, who had been hanged in Montana in 1889 for horse stealing and train robbery.
"Remus Reid was a famous cowboy in the Montana Territory. His business empire grew to include acquisition of valuable equestrian assets and intimate dealings with the Montana railroad. Beginning in 1883, he devoted several years of his life to government service, finally taking leave to resume his dealings with the railroad. In 1887, he was a key player in a vital investigation run by the renowned Pinkerton Detective Agency. In 1889, Remus passed away during an important civic function held in his honor when the platform upon which he was standing collapsed."

Agency expanding after making a loss

The Sydney Morning Herald reports that the real estate agency McGrath, that has concentrated on prestige Sydney suburbs, reported an annual pre-tax loss of $4.8M in their latest lodged accounts. However they are confident they will make a profit in 2009 and are planning to expand into Western Australia. McGrath sold their share in REA Group, owners of http://www.realestate.com.au/, for $14.4M.

Beecroft in Bloom a stunning success

Francis of the Lions Club of Beecroft - Cheltenham reports that this year's Beecroft in Bloom was the best ever, with high attendance, excellent income to the charity, and for the first time in years excellent weather! As usual the jumping castle didn't appear, but the little black pony worked strenuously all day and lots of small children will remember their pony ride for years to come. The art gallery achieved excellent sales, and there is even talk now of forming a Beecroft Art Society!

Beercroft!

Douglas Macarthur of Ray White Beecroft found that his latest letterbox flier went out with the town called "Beercroft"! He tells me the people at the local bowling club brought it to his attention, saying they thought it was a great name for the suburb. Which at least showed that they had read his flier.

Beecroft Cocktail Party

A most successful cocktail party heralded the start of Beecroft in Bloom on Friday evening. Sponsored by Ray White Beecroft, the cocktail party heralded the opening of an art gallery held in two empty commercial offices on the upper floor of The Module.
Nearly a hundred people attended! The consensus seemed to be that the party was a great success and should happen again next year.

Lions Website

The Lions club of Beecroft cheltenham has their own web site,
http://lionsbeecroftcheltenham.org.au/activities/beecroft-in-bloom, with details of the Beecroft in Bloom festivities this weekend.
Entertainment will be provided by students from McDonald College who will perform street theatre. Music ensembles from local schools, an animal farm, a jumping castle, a small market and our Town Crier will keep all attendees informed of the activities.

Beecroft estate agency now has its own blog

Ray White Beecroft real estate agency now have their own blog, "rwbre", http://rwbre.blogspot.com/. They will be reporting on property sales locally, and on the property rental market in the area. Ray White Beecroft has by far the largest residential property rent roll in the Beecroft and Cheltenham areas, and their cover extends out to Ultimo in the city, Parramatta, and Kellyville.

Property Management Horror Story

A council raid on a south Brisbane student house has found 37 people living there.
The house mainly housed international students and had backyard portaloos and makeshift garage bedrooms to accommodate tenants.
The raid followed a Brisbane council sitting last week, where changes to the housing code were adopted to cut the number of unrelated people permitted in one dwelling from six to five.

Traffic Flow Information

A quote from Google's latest release: "Starting today, a new feature is going to make those decisions a bit easier. Traffic information on Google Maps will show you the current traffic status of many motorways, major and minor arterial routes in Sydney, Melbourne, Brisbane, and smaller areas like Wollongong, the Central Coast, Geelong, the Sunshine Coast, and the Gold Coast, to help you avoid congested areas and plan the best route from A to B. It's part of our commitment to making Google Maps an essential tool for Aussies as they go about their daily lives."

Luxury Home Prices Slashed

Relax, Beecroft owners, this headline relates to Gold Coast properties. I must say anyone who followed the hyped marketing methods used to sell those properties over the last ten or so years can hardly be surprised to see what is now happening!
The Australian today reports "the number of luxury properties selling at mortgagee auctions has soared as receivers and banks cut prices by up to 50% to meet the market". About 500 appartments and houses from new projects that have failed during the global economic crisis, or are in financial distress, are expected to be sold before December, mostly in Queensland.
This time last year, Ray White Beecroft helped Becton, the big Victorian property developer, with their takeover of two large failed developments in Kellyville and Gosford, and Becton seemed to be delighted with the service Ray White provided. Not only that, but RWB now manages about fifteen of the properties in Kellyville, after Becton sold them to mainly foreign investors.

Beautiful Tree Recovers

This incredible tree nearly died of dieback a couple of years ago but I am pleased to see it is growing back. Bare of foliage you can see the true beauty of its trunk, and I wish it a long life!

Another lovely tree felled

This beautiful tree in Murray Farm Road had to be felled because it was split, possibly by lightning. So sad, but all lovely things come to an end.

House Sale Auctions Declining?

Residential property auction clearance rate in Sydney last Weekend was 66%, the weakest since May, despite being the third busiest auction weekend this year, with 330 auctions compared with 230 this weekend last year.

MyHouseValue.com.au

They got back to me! My house is worth - ummm well it's not very clear. Their response gives the fascinating statistic that the average value of houses sold in my postcode last year was $920,000, and of flats the average was $614,500. How that helps me determine the value of my particular house is not clear.
I suspect that soon I will be contacted by a real estate agent who will ask to come and see my house to discuss its value. This is what other real estate agents do all the time, for free, without needing to go through this complicated process. It just seems unethical to me to make promises on the internet about "we will value your house" when all they really mean is "please invite me into your house so I can do an appraisal like any other real estate agent".
Interestingly, when you Google "ethical real estate agents Beecroft" the only genuine local agency that turns up on Page 1 is Ray White Beecroft.

YourEstate.com.au

I am fascinated by the range of strange real estate agencies you can find on Google. YourEstate.com.au shows up when you Google "Real Estate Agents Beecroft", but when you go there it shows one house as "withdrawn" and one house with no address given, and that's it. That house is shown as listed with five other agencies including Century21 Carroll & Partners, an agency that folded four years ago, and Chessel First National that isn't even listed by Google any more. The advert says the property is a seven bedroom house and lists the property as selling for $749,000, which makes me suspect the listing might be many years old? How do these agencies work? Why does Google still show them?
It's so much more sensible to go to a reputable agency which actually exists!

MyHouseValue assessment

I just submitted my property for valuation by MyHouseValue.com.au. I will let my many faithful followers know how the result fits in with my estimate of its value. I still remain sceptical about the benefit of doing this over the internet instead of inviting an expert like Douglas Macarthur of Ray White Beecroft to come and give you a real valuation. Except Douglas doesn't pretend to give a "valuation", he gives you an appraisal. Because neither he, nor MyHouseValue, are qualified property valuers!

Startlocal has it wrong

I checked out the startlocal website, which purports to show such things as "The Most Popular Real Estate Agents Beecroft NSW". It lists three companies that are no longer in business in Beecroft, and doesn't list the most successful real estate agency in Beecroft, which is undoubtedly Ray White Beecroft!

Cracker

I was doing some Google searches, and entered "houses for sale Beecroft". Just below Ray White Beecroft on page 1, I found a site called Cracker.com.au/beecroft. I opened it wondering what Real Estate service Cracker provided, and found there were no beecroft properties advertised for sale or rent, but there were landcruisers and shoes and anything else you could think of. You could even get "lesbian personals" if you clicked the explicit tag. I just wonder why Google selects them to be on page one for "houses for sale Beecroft"!

Luxury Homes

The total value of the top ten Sydney property sales fell 45% since this time last year, $110M compared with $198M last year. However before getting too depressed it is worth noting that in 2006 the total of the top ten sales was $87M, which suggests more that the year before September 2008 was pretty exceptional. Even in these bad times, by this statistic sales are still up on three years ago. So despite this apparently bad statistic it still looks as though Sydney homes for sale are a good place to invest.

Swimming Pools and Building Surveys

I know someone who bought a property after a building survey, and after moving in found that the swimming pool was breaking up and starting to slide down hill. Nothing in the survey report about that, except the small print saying the survey covered only the building, not other features like the swimming pool or sheds. The problem was pretty obvious when you inspected the pool, but the buyer hadn't bothered to do that because he assumed that problems would be listed in the building report. Buyer Beware!

Strata Stress

There's a good article in the Sun Herald's Investor magazine today about the research you need to do before buying a strata property. The danger is that long-term owners tend not to put money into the sinking fund to cope with major problems, preferring to have a whipround amongst the owners when the problem comes up. So if you buy into the strata just before the problem needs fixing, you pay over your fair share of the costs. The article explains how you can do a strata search through the relevant state authority and obtain a building report before purchase. These will show you the funds in the accounts, any active disputes, etc.

Beware Ozhomevalue!

I reported earlier how my wife tried to get her home valued by responding to an Ozhomevalue letter drop. Well guess what? We still haven't received any useful valuation, but we are now getting spam email from the group.
The latest email says "Recently a shocking story involving bank errors relating to your home loan aired nationally on Channel 7's Today Tonight program", and asks me to contact someone. Sounds suspiciously like those emails about Nigerians!

Ray White Sales Rocketing!

Sales for June, July and August for the Ray White real estate group were almost $2Billion, compared to $1.4Billion for the same period last year!
And that period last year was before the main credit crisis happened.

More views on House Prices

SMH Business Day Business Focus says "The NSW housing market is expected to bloom in spring as it recovers from the downturn, helped by low interest rates and the first home owners grant."

New thoughts on the Global Money Crisis

An interesting article in SMH Business Day explains how the sudden credit crunch one year ago was caused more by a loss of confidence in commercial paper, than by individual bank failures or crashing house prices. The article explains how, just 13 hours after the failure of Lehman was announced on 15 September 2008, a crisis of confidence had led to enormous withdrawals being made. Reserve Primary bank had $US785 million invested with Lehman, which was quickly revalued to 80% of that, which in turn meant RP had to sell assets to meet its legal obligations. And they found there were no buyers! As one industry veteran said, "how do you set prices for securities when nobody is buying?"
But the experts, such as Poulson and Bernanke, were concentrating on the headline grabbing problems like AIG, and the article suggests they just didn't notice what was happening to the money markets.
On the 16th September RP's trustees valued their Lehman assets as worthless. RP could no longer raise cash to meet withdrawals. "The best way to get your dollar back is to ask for it before anybody else." And everybody was asking for their money back. And the rest is history.

Rental Situation in the Beecroft area

It's strange how the statistics for rentals change so rapidly. Normally Ray White Beecroft has something like 15 properties for rent, but I notice that now they only have five. In Realestate.com there are only 12 properties advertised by all agents combined for the Beecroft and Cheltenham areas (Post Code 2119)!
The Real Estate Institute of NSW says that Sydney’s rental vacancy rate is at its lowest level in 12 months.

New housing developments

In July 824 private sector townhouses and appartments were approved in NSW, compared with 425 in June. The prime reason for the sudden increase was probably the halving of stamp duty for purchases below $600,000, introduced by the last NSW budget, and effective from 1 July to 31 December, giving savings of up to $11,000.
Although probably not very relevant in the Beecroft and Cheltenham areas, it is likely that the Northern Suburbs area of Sydney will see increasing ratios of appartments and townhouses from this refocussing of development.

Property Beats Shares

RP Data research director Tim Lawless says his data shows that Australia's residential property market has "provided superior returns compared to shares, commercial property, superannuation, hedge funds, and private equities".
Note that this blog does not attempt to evaluate such claims, but RP Data should know what they are talking about. It depends what period of time you cover. Shares have done spectacularly over the last five months or so, but they fell disastrously last year, and are still only marginally recovering from those falls. Property has not had the same fall, and is now climbing above values of a year ago.

Sydney House Prices are Going UP!

RP Data - Rismark International home value index shows Sydney remains the most expensive capital city (surprise surprise) and it recorded the third highest growth rate of 6.6%.
Rismark boss Chris Joyce says "this has eviscerated the myth that the recovery was being driven exclusively by first-timers at the cheaper end of the market".

Beecroft in Bloom flowers are out!

The Lions Club of Beecroft/Cheltenham continue preparations for Beecroft in Bloom next weekend.

Want a map, quickly?

I have found an easy-to-use quick way to get directions between any two places in Australia. Put raywhitebeecroft.com.au in as a favourite in your internet home page, and when you want directions, just click the site, click the "Contact" button, and when the map appears just type in the two addresses and up comes a Google street map with detailed directions!

Granny Flats Rules Changed

The NSW Government recently changed the rules, so that secondary dwellings will now be allowed in all residential zones and can be approved within 10 days by private certifiers.
In a recent newspaper article on this, seeking comments, one comment I liked was
"It’s about time! We have too many rules anyway. There is plenty of space around the Northern Beaches, and granny flats will help young adults, the elderly, and foreign students to find cheap accomodation."
Ray White Beecroft are researching the issue for a number of their landlords, and warn of the tax issues involved if you later sell your home after converting part of it into a rental flat.

Sales of Houses Priced over $1M are slumping!!!

Australian Property Monitors report that some 2650 houses and units were sold in Sydney for more than $1M in the past six months, compared with some 3400 over last year. The head of research says that the reason house prices have not dropped is that prospective sellers are holding off selling their property, which is made easier for them to do while interest rates remain low.
One must assume that if, as now forecast, interest rates start rising at the end of the year, more forced sales will happen and prices of these expensive properties might start falling. One property bought last year for $5.04M that failed to sell at two recent auctions was finally sold by private treaty for $3.45M last month.

Jobless Forecast Drops

All the mainstream forecasters now predict that unemployment will peak below 8.5%. Newspaper adds have increased significantly. Dunn and Bradstreet business survey found that more employers are planning to hire staff than to fire.
Obviously this should boost house prices as buyers regain confidence.

Beautiful Things in Beecroft

The "beautiful things by" shop in Hannah Street Beecroft is having a Japanese theme this week. As part of that a Sushi cooking and tasting display was held outside Jean's shop on Saturday.

Lower North Shore Sydney prices up 7.4%

Cameron Kusher of the Sun Herald says on 6 September "I am surprsised at how well the Sydney market has bounced back during the first seven months of the year". He says Sydney house prices have outperformed the nation, while units have underperformed slightly.
A key remark as far as Beecroft home owners is concerned is "It is clear that it is not just the first-home buyer segment that is performing strongly. Values in the middle and upper end of the market are also climbing."

Trees and Telephone Wires don't mix!

We had an email from a tenant early this morning saying tree branches were threatening to bring down her telephone wires (see the photo). Fortunately I have a tree pruning device, and went there and trimmed it before she got home from work! All part of the service for a top Property Management real estate agency.

Sydney house prices are already soaring!

According to property analysts Residex, Sydney prices are rising at an annualised rate of nearly 30%!
Residex suggests this is due to the various government grants and the record low interest rates.

Housing Prices Set to Soar

According to the Sunday Telegraph 6 Sep, Australia could be heading for a rampant house-price boom! The article says this will be fuelled by superannuation fund investors exploiting generous goverment concessions.
The Treasury is trying to dampen demand by winding back the First Home Owner Grant at the end of this month. But meanwhile thousands of super savers are using super funds as a deposit on an investment property. Finance firms say the amount of super savings used for property investment rose by 25% in 2008 to a record high of $44 billion!
The other reason for optimism is that the super funds are flush with money and if just $5 billion of new money entering the funds each month was invested in propeties, this would easily pick up the slack from withdrawal of the First Home Owner Grant.
"The capacity for the super industry to boost house property prices is enormous."

Investors sniff the winds of change

Interesting quote from the Weekend Australian Financial Review this last weekend.
"Rents may have stalled but that hasn't put off investors who are out at the auctions again, looking for bargains."
The article says that the rental market has weakened because first-home buyers are moving into their own properties. That's probably true in the less expensive housing areas, but in Beecroft we've seen no sign of the bottom-end rental market weakening. However I agree with the article when it says "the upper end of the rental market - properties that cost more than $1200 a week - was the first to weaken. There are fewer companies sending employees to Australia." Absolutely what we see, and what I have blogged about before.

Trees and Swimming Pools dont mix!

The other day I was helping dig out tree roots over a leak in a rental property's swimming pool pipework. Although the tree had been small, the roots were enormous! See the pic!

Free Home Value Appraisals

There is a new home value estimation, called ozhomevalue. To check it out, my wife applied, and received a printout of data from RP Data showing all the sales in our postcode over the last few months, including 3 and 4 bedrooms and a block of land. Our house has six bedrooms, so this wasn't a lot of use to us. Also of course you don't know anything about the condition of any of these homes. Why did one four-bedroom house sell for $632,500, another for $1,240,000?
The email report we received says we will be given "an estimated price", and in a follow-up phone call the caller confirmed this estimated value would be given without entering our house. How can they do that? Some houses have been extensively and expensively refurbished, with no external sign of that, yet surely that must affect the sale price? We wait with interest for this estimation of our home's value.

Economy improving

Interest rates going up next month? It's possible but so much of the improvement in the economy is due to the stimulus package, it seems unlikely they would raise interest rates and hit everyone.

Poaching Customers - Unethical not illegal

A number of real estate agencies in the Beecroft/Cheltenham area are contacting landlords of managed rental properties, trying to poach their business. In the property rental area, this is not actually illegal, although the real estate industry considers it to be very unethical.

But the privacy issues are more significant. Unauthorised use of personal information is nowadays illegal.

Having the largest local rent roll, Ray White Beecroft is the obvious target for this activity. Lydia Merrill, proprietor of RWB, never gives out personal details of her clients, so if another agency has such personal information then they must have obtained it by deception or theft. If they use that information then to contact her clients they are breaking the law. Lydia would like any of her clients who are contacted by other agencies in this way to contact her.

Rental prices in Beecroft are going up!

At the upper end of the property rental market, prices have dropped dramatically over the last year. Beecroft agencies used to advertise a number of residential properties with rents of $1200 or more a week, but the Expats and Senior Executives who used to drive this market are now in short supply. However at the other end of the market rents are definitely rising, according to Ray White Beecroft property managers. Given current low interest rates, investors are seeing improved overall returns from home ownership and there has been a lot of interest in the lower to middle price brackets in the Beecroft and Cheltenham areas.

Big Four Banks capturing home loan market

Before the economic crash last year the major banks were handling about 60% of new mortgages, but in July this year the big four captured nearly all new mortgages.

Pressure is growing on the Government to unwind the funding guarantees that have given the big four banks a huge advantage over their rivals. Smaller banks and non-bank lenders are being forced to pay twice the borrowing rate of their AA-rated bigger rivals to raise funds to provide mortgages.

Beecroft in Bloom Cocktail Party

The Lions Club is organising Beecroft in Bloom for 18 and 19 September. An art gallery is being held upstairs in the Module, commencing with a cocktail party on Friday evening sponsored by Ray White Beecroft. Tickets at $20 each are on sale from Lions Club members, Ray White Beecroft, and other participating retail outlets.

Don't risk getting on a Bad Tenant Database

How many people know about Tica and other "bad tenant" databases? These exist so that landlords and real estate agents can be warned of people with bad rental histories, typically not paying rent, damaging property, or departing without settling outstanding debts. We recently had an application to rent a property, and found the applicant's name on Tica. It seems there had been a dispute with his previous managing agency, and rather than resolve it through the Tenancy Tribunal he had just walked away from it. Now he finds himself unable to rent! In order to recover his situation, he contacted the previous agency and settled their claim against him, so the landlord was happy. However it might have cost the applicant less if he had taken the agency to the Tribunal for a ruling at the time, as the Tribunal might have ruled in his favour.

Sydney house prices rising

According to RP Data, house prices in Australia continue to rise. Capital city house prices have risen 5.9% since the beginning of the year and the national index is now 1.8% ahead of the last peak in February 2008. Of all the capital cities, Darwin came top with 10.8%, Melbourne next 8.5%, and Sydney rose 6.6%.
Perhaps the key comment is "while first home buyers did initially furnish the early momentum, upgraders and investors have now taken over the baton". Also interesting is the finding that detached house sales jumped 9.8% in NSW.