The Experts

Greville Pabst
Expert
+ About Greville Pabst
Greville Pabst is a leading Australian property expert with over 30 years’ experience in the industry. He is on Channel 9’s The Block’s buyer’s jury and a regular commentator in media, helping everyday Australians make more educated property decisions.

Putting the property market into perspective

Monday, March 18, 2019

There has been plenty of negativity in the media over the last 12 months about house prices falling off a cliff, but to put it all in context, the current correction is simply a part of a healthy real estate cycle. Here is a breakdown of the property cycles over the past 150 years.

1800 to 1900s

To put this in perspective, let’s rewind back over 100 years. Ever since the first Land Boom in 1837, property prices have gone up and down. The most well-known boom was the Great Gold Rush that reached its peak in the 1850s, then again in the 1880s when Melbourne had a land boom on the back of high wool prices and expanding railway companies. Then came the collapse of many Financial institutions in the early 1890s and subsequent property crash. 

1900s to 2000s

This century was counted by many peaks and troughs starting with the prosperous 1920s boom followed by The Great Depression between 1929 and 1933. Post war, we saw a long boom when Melbourne became the Financial centre of Australia, this all ended in the early 1970s with a rise in oil prices.

In the early to mid-1980s the market went into another trough followed by the biggest commercial property boom that I have witnessed between 1987-1990. This boom was then shadowed by the commercial property crash in 1990-91, which flattened our real estate markets for five years. Property Prices did not start to recover until 1995.

2000s to 2019

Source: WBP Group

During the last 20 years there have been four upswings with the latest ending in November 2017. The two largest upswings occurred between December 2003 and September 2016, resulting in a massive 142% upswing over 29 quarters and most recently the upswing between September 2012 and November 2017, which ran for 21 quarters including a price rise of 44% approximately. During this time there have also been four downturns, including the present one, which to date has been running for approximately five quarters. 

What does this show us?

Learning from the property cycles, particularly over the last 30 years, we know that prices go up and down, and historically the down turns have been short and not as deep, compared to the upswings, which historically tend to be longer and rise higher. It’s important to remember that property is a long-term investment and must be reviewed on a 10-year horizon, due to the higher transactional costs in buying and selling. Over the last 10 years the median house price has risen approximately 77% and approximately 44% over the last five years. The most recent downturn commenced in late 2017 and so far, has run for five consecutive quarters. To date, the median house price is  down approximately 9%.

With transaction volumes tracking at historical lows, while interest rates and unemployment remains in check, I don’t see a catalyst for large price falls if the current supply/ demand balance stays the same and lending restrictions ease. To finish off on a positive note, we have seen clearance rates rise to over 50% over the past four weeks, largely supported by the shortage of quality stock available for sale. Who knows if this will continue in 2019, as the end of this property down turn is still being written. 

Greville has 30 years’ experience in the industry. He’s on Channel 9’s The Block’s buyer’s jury and a regular commentator in media.

http://www.grevillepabst.com.au/

 

What do we want? Certainty!

Friday, February 22, 2019

In my three decades of property experience I have not before seen so many factors that are contributing to the current price correction. Usually it’s a single event, such as a spike in interest rates or unemployment, a rise in oil prices or a commodity price crash.  

This time we have political uncertainty, a fear of change to negative gearing and CGT policy, credit tightening by the banks, an oversupply of new and off the plan apartments, valuation settlement risk, a sharp decline in dwelling commencements, buyer sentiment and confidence at an all-time low, foreign buyers have exited the market caused in part to changes in FIRB rules, additional stamp duty charges and changes to withholding tax, major lenders have stopped new lending to self-managed super funds to buy property, borrowers buying capacity has fallen by 20-25% and finance approvals have fallen by 10%.

Governments need to be clear with their direction. This uncertainty does no favours for the property market that relies on the availability of finance, which is the oxygen that fuels our market. On the flip side we still have low unemployment, the lowest interest rates since the 1960's, strong population growth, solid government spending and investment in infrastructure.  

Where’s the market really at?

A way to measure where the market is at is through clearance rates. Clearance rates around 60% usually represent a balanced market, and between 55%-58% a price fall of 2-3%, 50%-55% a drop of 3%-5% and 45%-50% a drop of 5%-8%. At the moment we are currently sitting on a 9% price drop for houses in Melbourne and approximately 11% in Sydney.

It’s important to remember that markets operate in cycles, and over my career I have seen our market fall down and back up many times. Keep in mind that prices in Melbourne had risen 44% in the 5 years, from May 2012 to November 2017, and 77% in the 10 years to November 2017. In this context, we are hardly falling off a cliff. Property must be viewed at as a minimum 10-year investment. There will always be rises and falls.

The correction we are currently experiencing is necessary and will help many people, particularly first home buyers, to enter the market and drive affordability. It is difficult to predict how much more prices will drop, but I expect that we will see a further drop of 4%-5% in 2019, followed by a fall of approximately 3%-4 % by the middle of 2020. Top to tail I expect the fall to be no more than 15% to 20%.

A few things will protect the fall

Interest rates could fall further before they start to rise, which will help the property market. The government will also have to consider stimulus in the form of grants or incentives to attract developers/investors back into the market.

Population growth and strong labour markets are other positives, as is strong infrastructure spending. An expected lower Australian dollar is going to make us look very attractive to foreign buyers. Importantly the acute shortage of housing will protect housing prices from collapsing. When funding returns to the new norm, I believe our property market will recover quickly.

For more information see www.grevillepabst.com.au

 

A look through the crystal ball for property in 2019

Thursday, January 17, 2019

The property market saw some large fluctuation swings in 2018 ending in a downturn. Here are my top predictions for the new year:

A 2018 throwback 

Before looking at the New Year, let's reflect on the surprising fluctuations and the speed of correction which the property market faced in 2018. Unlike most corrections, this was not supply driven. Rather, a correction forged by prudential controls, government policy, the Royal Commission into Banking, and targeted investor lending controls.

The speed at which developers left the market, and that they have almost completely abandoned the small residential development market, was also surprising. Investors retreated almost completely. Recent statistics show investor lending has fallen to 30 percent - the lowest in 30 years - caused by reduced borrowing capacity by as much as 25 per cent, which has now affected the owner occupier market.

Foreign investors had already retreated due, in particular, to the Chinese government making it more difficult for nationals to take their money out. Tightening of FIRB regulations, double stamp duty and increases to withholding tax have had a severe effect on foreign buyers.

The one highlight has been the participation from first home buyers, who saw the decline as an opportunity to enter the market. Property is all about confidence, but consumer sentiment appears to have weakened, and most participants are choosing not to participate in these conditions. Prospective vendors of quality family homes are choosing to sit tight as with interest rates and unemployment rates low, there remains no tension or need to test the market. 

2019 property market 

This year I am expecting market conditions to remain subdued, especially in the first half of the year. A prediction that housing prices will fall another 5 to 10 per cent before we hit the bottom of this cycle. Confidence will not return overnight. 

Most market participants will be wary of the Hayne Commission findings to be released in February and little will occur in the market until after the result of the Federal Election is known in May. 

As we noticed last year, the rise in demand of apartments, driven by downsizers and first home buyers, doesn’t look as though it will diminish. In junction, there is no significant pressure for vendors to sell at the moment, so they are waiting on the side lines to see how this plays out.

Rentals however, are very strong and there is little good quality rental accommodation available. I am hearing rentals are being signed up at first open for inspection and rent asking prices are moving upwards.

Victoria 2019 housing prediction 

In this current market the main driver will be the price of homes. There is growing demand for sub-$1,000,000, and the sub-$600,000 market will continue to perform well, as first home buyers continue to re-enter the market. Properties with a stamp duty concession below $600,000 will continue to drive regional markets such as Geelong, Ballarat and Bendigo. Growth will continue in Melbourne’s north and west corridor. The prestige market will continue to be challenged until lending constraints ease and foreign investment markets reopen.

A strong indicator will be stock levels. We have seen numbers decreasing and decreasing. Early indicators in 2019 are increasing numbers at open for inspections which is a positive.

Having said that, household debt is at record levels. It seems unlikely we will return to business as usual (10 per cent growth year on year), the best-case scenario is nominal growth or that the markets continue to move sideways. I could see the market drifting downwards another 5 to 10 per cent in the first half of 2019 and expect peak to trough to be no greater than 15 per cent. The market is then likely to stagnate for some period of time, but I believe we will see a bottom in this cycle by spring this year. I expect flat conditions for the next 18 months before the next upswing toward the end of 2020 through to 2025.

 

5 tips for buying property the right way

Thursday, January 03, 2019

What factors determine a quality real estate asset? Whether buying as an investor or an owner-occupier, buying a property is a tricky business. Here are five top tips to point you in the right direction.

1. Never speculate

When it comes to buying real estate don’t risk everything on a guess. Base your decision to buy on the available facts including comparable historical sales history. A long-term consistent performance history is the most reliable indicator of future outcome. Basing your decision to purchase on a location’s proposed future development such as improvements to local infrastructure or amenities can provide some disappointing results. Also, consider property that is in limited supply rather than those that offer a ubiquitous quantity of similar available stock. Quality scarce dwellings such as Victorian terraces offer limited opportunity to buy, and benefit from significant demand and subsequently higher levels of capital growth.

2. Value land

Land size underpins the value of a property, and in some instances accounts for 70 per cent or more of the total value of a property. Before deciding to purchase, consider how the value of the physical site compares to the value of the dwelling. If the value of the property is weighted towards the dwelling itself, such as is the case for high-rise apartments; it is unlikely to benefit from significant levels of future capital growth. When assessing a property remember one simple thing; land appreciates and improvements (buildings) depreciate.

3. Avoid main roads

While access to transport infrastructure is important, avoid buying on main access roads and near train or tramlines. Properties in these areas can suffer from traffic congestion, impeded access and significant noise disturbance – all these factors can influence the property’s growth potential. Select property located within walking distance to a bus route or train line in quiet streets or cul-de-sacs.

4. Ditch off the plan

Like any business, developers need to make a profit and a typical development is likely to have a minimum profit margin of 25 per cent. This means that every unit or apartment in the complex must sell at 25 per cent or more above cost. Off the plan buyers also absorb the cost of expensive marketing campaigns and advertising, additional costs that can take years to recoup in growth terms.

5. Buy for capital growth

The majority of property wealth is achieved through capital growth. In the long run a property with a high capital growth profile and moderate rental return will outperform those properties with seemingly high returns. It is also worth noting that rental guarantees are in fact no guarantee of long-term growth performance, so be wary.

Adhering to these simple steps will assist you in differentiating between an average property and a high performing investment-grade real estate asset that will bring you that step closer to securing your long-term financial goals.

 

4 smart property purchase tips

Thursday, November 22, 2018

Property investment is one of the most lucrative assets that should generate capital growth in the long run, if you invest smart. Whether the asset is to set you up for retirement, a secondary source of income, or potentially as your only income, choosing the right property can often be a difficult choice. 

The real estate market has changed dramatically in recent months and we are experiencing a downward price cycle. Property selection is now more critical than ever before. Buy the wrong property and you are on a downward slope that could take years to recover from. Buy the correct property and you are in seventh heaven.

Here are a few fundamental acknowledgments to consider before starting your journey.

1.     Can I afford it?

There’s no denying that a real estate transaction usually involves a large initial outlay. The best time to buy real estate as an investment is when you can afford it. The last thing you want is for this investment to impact negatively on your lifestyle. You still need to be able to afford a night out at a restaurant and go on an annual holiday for example.

The best place to start is to set a budget and go and see a financial planner. Secondly, make sure you have set a firm price limit and you have a preapproval from your lender. Thirdly, seek out the experience of a valuer and/or professional buyers’ agent. You cannot afford to make a mistake.

2.     Building the brick work (where to start)

With a daunting decision ahead of where to purchase, you need to research what type of property you would like to invest in. Is it a smaller house in the inner-city, an older style refurbished apartment, ground floor with a courtyard or top floor front, a villa unit, a town house or is it semidetached? Should I buy in the outer suburbs or in a regional area?

These are very complex decisions and I see many people make poor decisions either because they do not know what they do not know, obtain the wrong advice or they have blind trust in an accountant, financial planner, mortgage broker, developer or friend that may or may not be independent and have very limited property knowledge. The best advice I can give is to seek independent advice before signing the contract from a property professional like a buyer’s agent, but preferably one that also has technical property qualifications and experience like a valuer. 

3.     Property’s historical performance 

To get a good return, you need to be in the game for the long-term and avoid selling three to five years later. In my opinion, real estate is a minimum of a 10-year investment if not more. If you choose to sell within five years, unless you manage to time the upswing well, you will usually come off second best due to the high transactional costs that comes with buying and selling property.

Further, most people do not select property very well. In my 30 years’ experience as a valuer, licenced agent and buyer’s agent, less than 5% of all property is of investment grade. Do not stress, do your homework, investigate the capital growth profile over the last 30 years of the property and take notice of suburb profiles or median house price statistics. Engage a property professional who is independent. Use someone who negotiates for a living. Someone that understands the local values. Someone that turns up to an auction with a clear and concise plan. Someone that will be happy to look you in the eye in 10 years’ time and say now that was a good investment.

4.     Using the tax system to your benefit

Whenever, I see a property advertised for sale with tax benefits, rental guarantees, free appliances, developers paying my stamp duty, free rebates, no deposit I usually turn and run the other way. I would never take a client into this situation unless there was a very good reason.

In my experience, the property must perform and stand on its own without all the bells and whistles and tax incentives. If a property cannot stand up without this, I simply do not buy it. The secret to buying good investment grade property is actually quite simple. Buy a very good property in the first place and then hold onto it for a very long time. That is why selection is critical.

If you would like to learn about the best streets and suburbs to buy in, that have proven growth history, please contact me: gpabst@wbpgroup.com.au.

 

The Block apartments under the hammer

Thursday, October 25, 2018

One of Australia’s most viewed TV shows, The Block is coming to an end. For 12 weeks, five couples have transformed the iconic Melbourne building The Gatwick and on Saturday, 27th October, these five apartments will be placed under the hammer.

I have been involved with the show for seven seasons. As part of the buyer’s jury, I have been providing the contestants with feedback along the way, to help them achieve a better result on auction day.

St Kilda – balance of the buzz and the beach

St Kilda is one of Melbourne’s most known bayside suburbs, located just 6 km from the CBD. The Gatwick is a well-known building in the area, built in 1937 as a luxurious hotel that later fell into a rough low-budget rooming house with a notorious bad reputation. As the 12-week renovation commenced, the contestants were able to bring the estate back to its former glory, by creating five impressive million-dollar apartments. The Gatwick is located in the heart of St Kilda on Fitzroy Street, that caters for many trendy Melbourne cafes, bars and restaurants, a couple of hundred metres to the beach and intergraded into the exciting Mardi Gras and St Kilda festival.

Two separate competitions

The apartments we have seen on this season of The Block are very different and I feel that there are two competitions happening, one between the penthouses (apartment 4 and 5) a second one between apartment 1, 2 and 3 in the “original Gatwick”. The last mentioned are larger in size with traditional Art Deco features and out of these I see the front runner as Kerrie and Spence due to the extravagant kitchen. They received great reviews for their kitchen worth over $100,000 of appliances, which will attract the cooking lovers but depending on reserves, if that will be enough to win The Block. I predict that both penthouses will perform well thanks to their soaring 4-metre ceilings. In apartment 4, Norm and Jess have gone for a bright and fairly look, while Bianca and Carla have gone for a more New York style loft feel, which is north-west, meaning it will be warmer in summer.

Anything can happen at auction

All apartments have an estimated price starting at $2,200,000 up to $2,700,000, which is considerably higher than the areas medium house price of $1.29 million. With that said, these apartments are unique and it’s not often we see apartments of this size on the market. As we know from previous seasons, anything can happen on The Block, but I wouldn’t be surprised if we see one of the apartments pass-in, as the auction conditions in today’s market is very different compared to last year.

Potential buyers are likely to be downsizers, young professional buyers, small families and, as always, investors will be strongly attached due to the strong tax depreciation rates and corporate rentals, that will attract higher than usual investment yields. With two apartments facing Fitzroy Street, you get the true buzz of St Kilda and the other three facing the quieter Middle Park at the rear, these apartments have attributes that cater to all.

What’s next for The Block?

Although we haven’t finished this season quite yet, I’m already excited about the project they will be taking on in 2019. The Block will be staying in St Kilda, taking over another hotel on the notorious Grey Street, The Oslo Hotel. It’s great to see how shows like The Block are supporting the local community, giving it a well needed boost. Like the Gatwick, next year’s project is perfectly located with the beach, shops, cafes, restaurants and transport right on your doorstep. St Kilda is undergoing a fresh new wave of developments, it’s an exciting time for the property market with two Block transformations.

 

How much can the property market take?

Thursday, September 27, 2018

Spring is the busiest period in the real estate calendar but the spring we’re entering in 2018 is very different from a year ago. 

Ever since the market started to cool down in December last year, we’ve experienced a softening in the market with lower clearance rates, more pass-ins and a decline in house price growth. 

Starting after the AFL Grand Final this weekend, the typical spring selling period runs through to December, concluding in the lead up to the summer holidays. During this season we usually see an increase in property listings due to the warmer weather together with the Spring bloom that ensures our gardens are looking their best. This is one of the reasons why Spring is considered the best time of year to sell a property. This year, however, listings are tracking about 15% lower than this time last year. There are a number of reasons for this, but primarily vendors are reluctant to list their properties for sale in a weakening market. The pool of buyers has also dispersed with lending conditions much more restrictive and tighter than spring 2017. APRA has played a role in this, as has the Royal Commission into banking. Afterall, property is about confidence and eventually the negativity feeds into the psyche of both vendors and buyers.

I expect stock volumes this Spring to be lower than the previous year. I base this on the fact that the banks have tightened their lending and made it harder for people to get the finance they need for a property purchase. The uncertainty of the current political climate, with the Victorian state election in November and Federal election at the start of next year, will also impact market activity resulting in fewer transactions as people adopt a more cautious approach to property investment. Many vendors will wait until market conditions improve before listing their properties for sale. Uncertainty, around taxation policy concerning proposed capital gains tax changes and negative gearing is another factor playing on the mind of both buyers and sellers. Investors have also found it more difficult to fund their purchases with changes to interest only lending.

In reaction to the potential for higher interest rates and the banks increased lending restrictions, buyers have become more cautious, which explains why we’re currently seeing clearance rates under 60%. That’s about 10% lower than this time last year.  

This Spring we’re not likely see as many homes sold under the hammer as before. I believe there will be in increase in pass-ins and homes sold before auctions. Clearance rates will remain in the 55 – 60%, which certainly turns this Spring into a buyers' market, providing that the buyer can qualify for a loan.

 

Flipping a property for profit

Thursday, August 30, 2018

Flipping a property isn’t as quick and easy as it may appear to be on popular renovation shows. There are many variables to consider before taking this big leap and embarking on a new property flipping project.

Plan a budget

First things first, budget. Before starting, you will need to set a clear budget. This doesn’t only include the cost of the initial purchase price but also materials, labour and appointing an agent to sell the property post-renovation. Mapping out a plan where funds will need to be paid is a good suggestion. Keep in mind to allow budget for potential problems that may occur, which could potentially exceed your budget. This allows you to be prepared if disaster does strike.

Find a property

When choosing a property, compare it with the price of renovated equivalents in the area to determine the potential profit. Properties scarce in kind, such as period homes or older style flats, in lifestyle locations close to employment opportunities, transportation, cafes, restaurants and recreational facilities. Areas with these lifestyle attributes make for rewarding renovation projects with interest from both tenants and buyers.

Finding the right property also depends on your skillset. If you are confident in your ability to assess a property and understand what needs to be done successfully, you may choose a property that requires a larger renovation and structural improvements in the hope to get a higher return. However, if you aren’t confident in a total house flip, and looking at a smaller return, consider a property that doesn’t require too much work.

Before buying, obtain a building inspection. This is imperative as you don't want any hidden little surprises appearing that may impact your future property.

Begin renovation

Determine how much work you are planning to do on it and whether you’re willing to tackle structural changes. Some renovators make the mistake of customising the home improvements after their own taste and style, but to get a good return you need to identify the needs of the local demographics in the area. If you’re unsure of what to do, it may save you thousands to engage some independent advice who can give you a better understanding of what future buyers or tenants are looking for in that specific area, so that when you do sell or lease it, you’ll get the maximum return on your investment.

Once you start the renovations, keep in mind that you could save costs by doing parts of the renovations yourself instead of completely relying on trades. Just remember that certain parts will require a qualified professional, like a plumber or electrician, in order to pass building approval.

The risks

Flipping property can come with its fair share of risks. Some risks to take into consideration is overcapitalizing, you don’t want to spend too much on features that might not give you any return on your investment. Keep to your budget and allow extra planning before purchasing a property to minimise the risks and potential additional expenses.

As flipping houses has become more popular along with the constant changes on the market, you may find it more difficult to sell certain properties. If this were to happen, you might consider renting it out until you can find a buyer, have this as a backup plan and take it into consideration when first buying.

Good planning and preparation is crucial to a well-executed and profitable renovation project. Before buying a property, seek a local real estate agent, town planner, a builder and a valuer in order to understand the local laws, regulations and market conditions that impact the property and your proposed renovation.

Greville Pabst is CEO of WBP Group. www.wbpgroup.com.au

 

 

The science to your address

Tuesday, August 07, 2018

Purchasing a property is one of the largest financial decisions many people will do in their lives. You would therefore think that buyers would have a rational approach when choosing a property to buy, but in some cases, pre-existing beliefs can influence consumer psychology and decision-making processes, which may not always be for the better. Particularly when it comes to superstitious beliefs and their impact on property purchases.

Superstition is something that most of us are familiar with. Whether we consciously attribute significance to it is arguable, but it’s not uncommon to “knock on wood” and avoid black cats or walking under ladders to safeguard against jinxing oneself.

In America, each time Friday 13th occurs, the US economy sustains a loss of an estimated $850 million, as people on this day avoid marrying, travelling and even working. Our superstitious belief of the number 13, among others, has historically seen many high-rise buildings skip or rename the 13th floor, or use it as a plant room. Even at some airports and hospitals there is an absence of gates and rooms with the number 13.

When it comes to buying property, many real estate agents claim that buyers from some Asian cultures, in particular, won’t even consider a home if the street number doesn’t stack up, and in some cases will pay a premium for those that do - with 4 and 14 considered among the unluckiest and 8 and 9 the luckiest.

Some buyers may be put off purchasing a property with a certain street number, but it doesn’t reflect the property’s value and potential performance and should therefore not be the main factor when choosing a property to buy. If you’re not a superstitious person, homes with certain numbers could in fact benefit you as a buyer, as the competition might be slightly lower.

A property’s value is typically impacted by location, land size, building improvements (the type, size and condition of the dwelling), orientation and aspect, with no widely evidence to support the claims that a property’s street number has a bearing on its value. 

www.propertyduo.com.au

www.wbpgroup.com.au

 

 

 

Property recap and forecast for the next 6 months

Tuesday, July 03, 2018

After a few years of strong growth in real estate, we’ve seen a considerably softer market during the first six months of 2018. The overall dwelling price growth has slowed from double figures in 2017 to single figures in first half of 2018.

Despite this, the key economic indicators are still strong:

          Interest rates remain at their lowest levels in living memory.

          The employment rates are high, and most sectors of the economy are growing.

          There is still strong interstate and overseas migration to Australia with around 100,000 new entrants each year to Victoria alone.

          We have an acute shortage of housing stock, which usually leads to a growth in capital value.

So why has the property market stalled?

Money is the oxygen that fuels the property market. But with major banks tightening their lending requirements it has become harder for investors and first home buyers to qualify for a loan, lowering the number of people able to buy property. The current negative sentiment and tightening monetary policy environment has without a doubt contributed to the slowdown of the property market.

With less room to negotiate with the banks,  consumer confidence has fallen during the past seven months (according to Westpac Melbourne consumer confidence index), which has made people more hesitant and less confident to invest in the current property market.

We must also consider the upcoming Elections. The Victorian State Election will take place in the middle of the typically booming spring property market and will be followed by a Federal Election in 2019. There is a common trend that during election years the market becomes more uncertain and generally buyers pause to assess the outcome and effect of a policy change. As we approach the Federal election the debate around negative gearing and capital gains tax will be loud.

What sectors are still performing well?

Even though we have seen signs of a cooler market, all sectors have not been affected. The residential new land and first home buyer market remains strong, in fact, residential land purchases, in some of Melbourne's outer north and western suburbs, have grown 30 per cent price over the past 12 months.

Some of Victoria’s regional towns, such as Geelong, Ballarat and Bendigo, have also experienced above long-term capital growth rates.

Good properties are still sought after and are performing very well. Older style apartments have outperformed dwellings during the last year, however, new, high density investment

grade apartments and off the plan remain sluggish. Large family sized owner occupier targeted apartments are faring better.

Properties priced in the $1million - $3million price range seem to be experiencing a slowdown in demand, with more of properties within this bracket tending to pass in at auction. Interestingly, there is evidence to show that renovations are becoming more popular, perhaps in part due to the popularity of television renovation shows such as The Block but also because it is also often cheaper to renovate and extend rather than to sell and buy something else.

My forecast for the second half of 2018

With both State and Federal Elections looming, consumers are going to become even more cautious about spending until the election results are known. The Banking Royal Commission has the eyes of the media on our major banks and we are clearly in an environment whereby there is less appetite for risk.

My role as a Property Advisor is to ensure I provide the best advice to my clients so I keep a close watch on:

          Any increase in interest rates

          A rise in unemployment

          Global economic outlook

          Credit squeeze

We’re currently in the middle of a buyer’s market where one can afford to be choosy. Good property will still sell, but we are seeing more buyers becoming auction shy and properties passing in, right now and for the remainder of the year both vendors and agents are more likely to consider genuine offers before auction.

It’s a good situation for those looking to enter the property market with improving housing affordability.

However, it’s not so good if you are planning to offer your house for sale this coming spring – the key is to engage an agent with strong credentials and seek independent property advice to ensure that your always in a position to make smart property decisions.

www.propertyduo.com.au

www.wbpgroup.com.au

 

 

 

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