Spring Real Estate Market Update – Buying Property – Search to Purchase and Beyond

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‘With over 20 years real estate experience in Melbourne,

Master Advocates strength is our true personal focus to deliver excellence across independent

Buyers Advocacy and Property Management services.’

 

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It’s the time of year again when Melbourne is most alive, the sun is shining, gardens and nature are in full bloom, AFL footy finals leading to the big day in September, the Spring Racing Carnival and Melbourne Cup just around the corner. People are out and about enjoying every part of “The World’s Most Liveable City”. This is also the time of year when people, Buyer and Vendors are embracing one of the greatest assets of our nations wealth being the property, real estate and housing market which has recently been estimated at $6.5 trillion value of residential property in Australia and is the nation’s single largest and most valuable asset class by a substantial margin.

People love to inspect property to buy in Spring and one of the main reasons is that more property generally is listed and put on the market for sale to benefit from the Spring weather, warm sun, natural light, lush full bloom landscaped gardens that will enhance the emotions and attraction from buyers that are investing great amounts of money. The unwanted issues such as damp and mould, roof leaks, poor drainage systems in gardens and roofing are not as noticeable in Spring as they are in Winter.

There are high clearance rates at auction and property value in Melbourne, especially in the Northern and Western suburbs that are receiving high demand and attention from local and interstate investors and owner occupiers based on the promise of strong Capital Growth and Rental Yield in the next 5 to 10 years. South Eastern suburbs are performing at a higher dollar value in comparison though the Capital Growth and Rental Yield rates are much more moderate and the forecast for the next 24 months may not improve. On a national level Melbourne is performing well and should be on top within next 5 to 10 years in comparison to other capital cities.

Melbourne’s moderate and consistent Housing Capital Growth rate at present seems sustainable and rental yields being at an all time low, in line with current record low Reserve Bank Interest Rates, being the lowest they have been since the 1960’s. This should remain moderate within a 20km radius of the Melbourne CBD providing there is no major economic trigger that can effect the property market. Rental yields can only rise, especially over the next five years as property prices in metro areas where people need to live and work will be less affordable to buy to occupy or invest, we predict more people needing to rent longer term and the average age of first home buyers exiting the rental market will increase well into the 30 year old age group. Decades ago, the average house cost and mortgage commitment was x5 the average annual income, now the average house cost is x10 and greater the average annual income.

One thing that will always be constant to balance the rental/investment or property owner occupier market is that people will always need a roof over their heads and a place to live. To buy for profit, one should always assess buying for Capital Growth as a priority, location, value add potential, land to asset ratio, then Rental Yield and Tax benefits and correct structure, being selective with these factors is highly important when buying property for investment or to occupy.
The right property selection with considered due diligence on location, access to amenities, key infrastructure, employment access, comparable property for quality and price, building type and land area will maintain value and demand in any market and come out on top over a period of time of 5 to 10 years. “Profit When You Buy”, this is the key to your Property Portfolio long term wealth.
In this Spring edition of our newsletter and market update, we have provided reliable and accurate real estate news updates from peak industry bodies, associations and data resources. Some quarterly market figures can be confusing. Comparing data on a 6 to 12 month period is a better approach to observe the market trends. Median prices do not take into account specific property quality and type, high or low density, over supply or unique property, macro areas of suburb performance and demand, location distance to key amenities, public transport, schools, local shopping and business precincts, capabilities to value add from existing structure, fixtures and fittings to renovate or extend, land capabilities to re-develop or subdivision subject to position in suburb and council approval which can add a high premium to the value of the property and land. Other key aspects of selection and property value can be the vision and planning for the municipality, town planning, key Activity Zone or Growth Zone within the suburb. This can impact market Capital Growth and Rental Yield, vacancies. This is a reason to take your time, do your research and accurate comparative analysis or hire a professional independent REBAA Accredited Buyers Agent to translate the right data and have a strong understanding of the market with first hand knowledge and frequent experience.

 

 

 

 

 

 

In This Issue:

  • Core Logic RP Data Quarterly Review – Australian Residential Property Market and Economy August 2016

 

  • REIV Monthly Research Bulletin September 2016

 

  • Long Awaited First International Market Launch of Viridian Energy Australia – Power With Purpose

 

  • Due Diligence Stages For Buyers Property Selection Process: Master Advocates 4 Step Process Advice

 

 

 

 

 

 

 

 

 

Core Logic RP Data Quarterly Review – Australian Residential Property Market and Economy August 2016

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Australian National Wealth

 

$6.5 trillion

Value of residential property

 

$2.0 trillion

Value of Australian

Superannuation

 

$1.7 trillion

Value of listed equities

 

$0.88 trillion

Value of commercial real estate

 

 

Residential property in Australia is the nation’s single largest and most valuable asset class by a substantial margin. The total value of residential property was estimated at $6.6 trillion as at July 2016. The total value of residential property is significantly larger than the value of listed equities ($1.7 trillion) and Australian superannuation ($2.0 trillion). Over the 12 months to March 2016, Australian gross domestic product (GDP) was recorded at almost $1.65 trillion indicating that the value of residential property is around four times larger than the annual output of the Australian economy.
While Australian residential housing has an estimated worth of $6.6 trillion, the Reserve Bank’s (RBA) private sector credit data indicates that the total value of outstanding mortgage debt to Australia Authorised Deposit-taking Institutions (ADIs) was approximately $1.57 trillion as at June 2016. This indicates that the level of mortgage debt remains comparatively low relative to the overall value of the national housing portfolio, at around 24%.
The private sector credit data also shows that lending by Australian ADI’s is heavily tilted to residential mortgages. According to the data there was $1.57 trillion (61.1%) outstanding for housing, $144.9 billion for other personal lending (5.6%) and $853.5 billion (33.2%) for business lending. Mortgage lending has consistently been a larger proportion of lending by Australian ADI’s since April 2001. Banks have continued to favour mortgage lending over business lending with good reason. Mortgages have generally performed well with low arrears, the return on equity is strong, earnings from mortgages are consistent, higher risk loans are generally insured via lender’s mortgage insurance (LMI), home values have generally trended higher and Australian’s tend to prioritise repayments of their mortgage. It is also important to remember that anecdotally many small businesses are actually funded through housing equity rather than via business loans. The high level of mortgage lending has been a contributing factor to the escalation of property values and the subsequent record-high level of housing debt.
Since June 2012, combined capital city home values have been rising following a fall of 7.4% over the previous down phase which ran from October 2010 through to May 2012. While this represents a strong level of value growth, it has been heavily biased towards Sydney and Melbourne, this was also the case over the previous growth phase between 2009 and 2010. The rate of growth in each of these cities is now slowing however, it is still much stronger in these two cities than in all other capital cities. The rise in home values across the combined capital cities has been accompanied by an increase in the number of property transactions however, the number of home sales is now also starting to trend lower, as accompanied by a rise in the level of new dwelling approvals.

 

Core Logic RP Data Quarterly Review – Australian Residential Property Market and Economy August 2016

Click here to view Core Logic RP Data Quarterly Review – August 2016

 

 

 

 

 

 

 

REIV Monthly Research Bulletin September 2016

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Geoff White’s REIV Market Wrap

LATEST SALES & AUCTION RESULTS    –    MONDAY 12TH SEPTEMBER – SUNDAY 18TH SEPTEMBER

A clearance rate of 81 per cent was recorded this weekend compared to 77 per cent last weekend and 74 per cent this weekend last year. There were 756 auctions reported to the REIV, with 611 selling and 145 being passed in, 63 of those on a vendor bid. More than 1000 auctions will be held next week, before the market eases over the week of the Grand Final.

CEO – REIV

Geoff White

 

Following its September 2016 meeting, the RBA left the cash rate
unchanged at 1.5 per cent. In making its decision, the RBA noted that
commodity prices overall have increased since the beginning of the
year. Australia’s terms of trade are forecast to remain close to current
levels over the next couple of years.
The Westpac Melbourne Institute Index of Consumer Sentiment
increased 2.0 per cent in September to 101.4 from 101.0 in August.
Consumer Sentiment has been very stable over the past six months,
averaging 100.3.
There have been about 22,800 auctions held in Victoria in the first eight
months of 2016 with 74 per cent selling. The number of auctions from
January to August 2016 is 9.0 per cent lower than the same period in
2015, where the clearance rate was 77 per cent. The middle Melbourne
region recorded the highest number of properties sold by auction so far
this year, with around 6,770 sales, and a clearance rate of 75 per cent.

REIV Monthly Research Bulletin September 2016

Click here to view REIV-Research-Bulletin-September-2016

 

This month’s spotlight: Suburbs of the North to Watch

Click here to view suburb list and latest sales results

 

 

 

 

 

 

 

Long Awaited First International Market Launch of Viridian Energy Australia – Power With Purpose

 

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Viridian FB_IMG_1474234517746

 

The day we’ve all been waiting for. Viridian’s first international market is live for customer enrolment in Australia.

Choose Affordable, Responsible Energy. Watch Your Earnings Grow.

Click Energy + Viridian Energy Australia:
Creating a path to a more sustainable world, together.

Just click on the link below to learn more about Viridian Energy Australia and how to become a customer or an associate supporter.

carbonmindful.viridianenergy.com.au

Due Diligence Stages For Buyers Property Selection Process: Master Advocates 4 Step Process Advice

"Experience A Better Way"®

“Experience A Better Way”®

Click here to view Due Diligence Stages For Buyers Property Selection Process: Master Advocates 4 Step Process Advice

Due Diligence Checklist Consumer Affairs Victoria

Buyers Advocacy Service Disclaimer (Please read or download the attached file and contact us for any further information)

 

 

 

 

 

 

 

Buyers Advocacy Complimentary Buyers Criteria Wish List Consultation: Buying Property – Search to Purchase and Beyond

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Schedule a complimentary independent personalised consultation and receive a criteria analysis report based on your property buying needs and wish list

Payment Plan Options Now Available For Consultancy, Investment Property Advisory and Buyers Advocacy Services

Comprehensive Buyers Advocacy Service – Value Offering Package

(Includes up to five (5) Independent Building & Pest Inspector Reports)

Complimentary Solicitor Pre-Purchase Contract Reviews Available

 

Post Purchase and Settlement:

Comprehensive Landlord Ongoing Leasing and Property Management Service

 

 

 

 

 

 

 

A Superhuman Buyer’s Agent – REBAA (Real Estate Buyers Agents Association of Australia) News Article September 2016

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Picture1 Michelle Paralympic

Picture2 Michelle ParalympicPicture3 Michelle Paralympic

REBAA published a news article about our journey and how Master Advocates began. My wife Michelle Winkler Errichiello being the strength and inspiration behind our business.

Proud to be a REBAA Buyers Agent. The core values, code of conduct and what it means to be a REBAA member are aligned with our passion and values and a large part of why we do, what we do.

 

Buy with a REBAA Accredited Buyers Agent – “Buy With Confidence” TM

 

Best regards,

Mark Errichiello, 

Licensed Estate Agent, CEA (REIV), Accredited Buyers Agent Member (REBAA), Director (OIEC)

Watch: Our Journey

Master Advocates – Real Estate Services Pty Ltd

“Experience A Better Way” ®

 

 

 

 

 

Supportive information sources: REIV, Core Logic RP Data, REBAA, Viridian Energy Australia in Association with Master Advocates Real Estate Services and Viridian Energy Australia published September 2016

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