US Returns to Growth

Global stockmarkets surged yesterday when the US gross domestic product for the third quarter showed stronger than expected positive results. Meanwhile Norway followed Australia's lead and raised interest rates 0.25%.

How to boost your agency's listings

Did you hear the story of someone who just happened to notice his house listed as having been sold, on an estate agency's window displays? That was the first he heard about it! It seems the agency was a bit short of real listings and sales to brag about, so they just photographed a few nice looking houses and put them in the window! As sales, so people wouldn't walk in wanting to see round them.

"Housing Sales on the Wane"

A Housing Association survey found that sales of houses were down by 4.3% last month compared with August. The association attributes this to the cut in the first home owner grant.

"Prices Through the Roof"

According to Peter Hawkins of the Sydney Morning Herald "solid residential price rises in Sydney's inner west provided the springboard for a 3.6 per cent rise in Sydney house prices over the September quarter". Median price for inner west rose 5.6% to $760,000, against $700,000 in 2003 that fell back to $620,000 in 2005.
The data indicates the second consecutive quarter of price growth above 3% in the Sydney property market - the best six months since 2003!

Swimming Pool Property Management

It's the time of year when owners and tenants start wanting to use their swimming pools. And this means that property management departments of real estate agencies have to respond quickly to problems. The main problem seems to be leaking pools, and most people assume it's leaking pipework. A good clue for this is bubbles in the return water flow.
But a leaking hydrostatic valve is another common problem, that Ray White Beecroft has just rectified with one of their rental properties.
http://www.aqualinepoolresurfacing.com.au/Hydrostatic_Valve.html provides an excellent article on this - "Aqualine Pool Resurfacing recommends all swimming pool owners consider the age of their pool's hydrostatic valve when their swimming pool first starts to leak. It should be your first line of attack before obtaining expensive pipe pressure testing and leak detection services. In 50% of cases most of the water is being lost from the old worn out Hydrostatic valve."
I wouldn't agree with the 50% statement, we have had many more proven leaking pipes, but the point Aqualine make is still valid. And remember, never empty a pool negligently! If the hydrostatic valve fails, external water pressure can push the pool out of the ground!

Interest Rates Trends

Consensus seems to suggest interest rates will be raised 0.25% each of the next three months, to reach 5%, which is what people seem to believe is the appropriate rate once the financial crisis is over.

Auction Clearances Dip

Auction clearances in Sydney dipped to 62% compared with 65% the weekend before. However Ray White Beecroft had a hugely successful auction in Albert Street Beecroft, with about 80 people present and fifteen registered bidders. After over 40 bids the property was finally sold for $999,000, against a reserve of $900,000! The owner sent Douglas Macarthur a hugely grateful and congratulatory testimonial.

Harry Triguboff's views

The managing director of Meriton says the Reserve Bank raised interest rates too soon. He predicts that interest rates will peak at 5.5 per cent. "Rents will keep going up and the government will realise they can't allow the Reserve Bank to go on with their interest rates. Rates will have to come down. We have a big shortage of accommodation.
His advice to property owners - "have a little bit of patience. Hang on, charge them more rent, and enjoy".

House Sales Forecasts

The Weekend Australian Financial Review says "House buyers are expected to pursue property until the mortgate rate rises above 7%". Analysts and lenders expect little to no effect on the market following the past week's interest rate rise.

"Delinquent Loans to Jump"

Or so says Eric Johnson in today's SMH Business Day. "A rush of first home owners taking advantage of government cash incentives will result in headaches for banks over the next year as most brace for a surge in customers falling behind in payments."
Eric says that the second year is the time when most new home owners start falling behind on their loans. So if that trend is matched by rising interest rates, as now seems certain, there could indeed be a jump in delinquencies.
JPMorgan issued a report saying that australians were vulnerable to interest rises because their housing debt was close to record levels.

The Fed increases Interest Rates

What a change in the climate! Just a month or so ago everybody was convinced rates would stay on hold for months. Now suddenly after a rush of stronger than expected data the Fed has raised rates to 3.25%.

Where do Appraisals Come From?

The survey mentioned in my last blog also explored the source of buyer enquiries to real estate agencies, and found that real estate portals accounted for between 45% and 90% of buyer enquiries! However for appraisals (ie potential vendors), the results were less favourable to the portals. The majority of those surveyed reported that less than 30% of appraisals resulted directly from those enquiries. This suggests a lot of internet users contact real estate agencies from portals like realestate.com, but serious vendors are also heavily influenced by other inputs, presumably advertising, letter drops, and agency reputation.
The experience of my house sale professional contacts supports that finding. An agency like Ray White Beecroft, with its excellent location on the main Beecroft shopping arcade outside Franklins, with four superb digital window displays showing off its wares, a large property management department, and a reputation for efficient and ethical performance, gets appraisals from many sources, certainly not just directly off the web portals.

Real Estate Portals Survey

Business2 Real Estate News and Technology web site has conducted a survey of customer satisfaction covering all the major Real Estate portals. Perhaps not surprisingly realestate.com.au comes out a clear winner with 68% of respondents satisfied and less than 15% dissatisfied. By comparison Domain.com.au had only 40% satisfied and 27% dissatisfied. Apparently Homehound and Myhome both had more dissatisfied than satisfied. Google Real Estate registered 38% satisfied and 20% dissatisfied. The survey author calls this a good result given the short time that Google Real Estate has been operating, presumably on the assumption that Google Real Estate is just starting, whereas the other portals have been around long enough to have got their act together!
The survey found 85% of respondents believe Google Real Estate will increase their share of the market.

Beecroft Commercial Sale by Ray White

Ray White Commercial Eastern Suburbs sold 5 Wongala Crescent by auction for $4.95M! The block is a mixed use neighbourhood shopping centre comprising seven retail tenanceies at street leel, five first floor office suites, and four two bedroom residential appartments. The site is approximately 2043 sq m.
Well done Ray White Commercial.

Other ways to sell houses

Many years ago I met Tony Wiles of ANREPS (Australian National Real Estate Private Sales) in Perth, we were glider pilots competing in the WA State Championships. This was long before I got started in the real estate industry. I was interested in what he was doing, assisting people to sell houses themselves, without using estate agents. I confess that I didn't hold out much hope for his business.
I only got involved with real estate after I came to Sydney, ten years ago, and had no further contact with Tony, until the other day when I found Tony on Twitter. ANREPS is still going strong, twenty five years later! Well done Tony. One thing ANREPS achieves is to keep real estate agents honest! His website provides an interesting description of the battles he has had with the local real estate industry, at this URL http://www.anreps.com.au/wa/aboutus.php.

Rent of buy?

A good article in the Sun Herald today presents the good and bad sides of renting or owning a house. I liked the advice to renters "work out what type of house you want to buy later. Then invest the difference between the rent you are paying and what you would have to pay on a mortgage."
The article doesn't discuss the alternative, of buying a rental property as an investment, and living in rented accommodation. The key to that is to have a good property management agent that will look after your property effectively.

Chinese Spending Boom?

Li Yanping makes an interesting observation in today's SMH Business Day. The celebration of 60 years of Communist Party rule in China, and an eight day holiday associated with those celebrations, could trigger a tourist boom, boosting consumer spending and helping the Chinese economy to grow. And of course that would help Australia's exports.

Building Approvals Surge

According to the SMH, approval figures foreshadow a surge in non-residential building activity. Approvals in August were $8.6B, 54% above the monthly average for the last financial year.