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The Experts

Charles Tarbey
+ About Charles Tarbey
Charles Tarbey is the owner of Century 21 Australia ( and Century 21 New Zealand (

Myth busting the Australian real estate market

Tuesday, September 12, 2017

By Charles Tarbey

With so many different opinions and information on the property market available, it can be difficult to make sense of the truth behind what we read, see and hear.

Here are three myths about the real estate market that I believe should be dispelled to help Australians make the most of property transactions in the coming months.
1) That stabilising growth is a bad thing  

According to CoreLogic’s August home value index, national dwelling values remained flat over the month, with capital city values edging 0.1 per cent higher. Simultaneously, regional dwelling values slipped 0.2 per cent lower.

CoreLogic’s head of research, Tim Lawless, said this steady result provides further evidence that the national housing market has moved through its peak growth phase.

Whilst some may believe slower growth conditions are something to be alarmed about, I believe it also brings with it a number of positives.

It may enhance the opportunity for some to come off the sidelines and enter the market. Affordability issues may be lessened to some degree, as people’s wages and savings may be able to grow at a pace more in line with housing price growth.

People may also be faced with more time to weigh up a transaction in a marketplace that is not as hurried. Buyers may face less pressure to rush in and purchase the available stock, as we have seen occurring in more heated areas such as Sydney and Melbourne. This may also prove beneficial to investors who may have the chance to purchase an investment without getting caught at the top of the property cycle.

Vendors on the other hand may face less risk of selling and being priced out of the market when looking to buy again.

Moderate short-term growth can often lead to more sustainable growth over the long term so Century 21 is not overly concerned about cooling conditions.
2) That foreign buyers have put pressure on affordability

Australia is naturally an appealing market for international buyers - boasting a great lifestyle, climate and appealing property prospects.

Plenty of discussion has surrounded the influence of foreign investment on the real estate market, and whether this is preventing some Australians from getting on the property ladder. This appears to have resurfaced in recent times with increased taxes, changes to investor lending policies and new regulations in China.

I believe it is a myth that international buyers have caused a great deal of grief for our local market. Rather, they have helped our building industry to remain a strong and stable part of the national economy while likely increasing housing supply.

Not all properties built in Australia can easily be sold to the domestic market. For example, much of the stock that Asian buyers are purchasing here is not really in the first home buyer market, such as apartment stock.

It could be argued that our real estate and construction industries may suffer if foreign investors are increasingly pushed away, as they will look to invest into other parts of the world.
3) That agents don’t need to work that hard to make a sale

During market booms, the belief seems to circulate that properties virtually sell themselves. Some may see the agent’s role as a simple one that allows them to reap the rewards of high commissions.

It is important to dispel this perception as agents play a valuable role in facilitating successful transactions.

In a more stable market, the role of a good agent becomes critical. In these types of conditions it can be a little less easy to bring buyer and seller together, and to reach an acceptable meeting of minds. Agents may work for weeks, or even months, and put in significant effort without even earning a cent if a sale is not achieved.

Many also tend to forget that real estate can be quite an emotional game. Selling one’s home can be a stressful, confusing or intimidating process and this is where the experience of an agent will be invaluable to navigate the transaction and manage the emotions of all parties involved.  

Whilst cheaper options may suit the circumstances of some, choosing a skilled agent with refined negotiation abilities should be a key consideration for vendors in the coming months. It is worthwhile considering that a little extra investment in an agent who will tirelessly negotiate and market on your behalf could pay dividends in a sale price beyond your expectations.

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Bursting the property bubble talk

Wednesday, August 02, 2017

By Charles Tarbey

Australians are understandably very passionate about property considering it is one of their biggest and most valuable investments. 

Signs of a cooling market appear to have generated a slightly nervous sentiment of late, as speculation about a dramatic property market downturn is becoming more fervent. Some are concerned about what changing market conditions may mean for their property’s value and their financial position. 

However, I encourage Australians to take a step back and to evaluate the realities of the data behind the hype and the headlines, as things may not be as critical as many believe. 

Auction clearance rates

Over the June quarter, CoreLogic reports that clearance rates have eased slightly from 74.8 per cent over the first quarter to 71.7 per cent at the end of second quarter in 2017. A downturn of 3.1 per cent is arguably not a dramatic one, considering we are in the characteristically quieter winter season.

While we have been seeing less people at auctions, this does not mean the clearance rates are struggling in all markets. Clearance rates were 3.8 percentage points higher nationally in the June quarter of 2017 compared to 12 months ago, and all capital cities are performing better than they were this time last year according to CoreLogic.

Australians should remember that all it takes is one interested buyer for a successful auction, and it appears the underlying demand for property is still present in most areas.

It is also important to remember that while clearance rates are a reflection of market activity, they do not give the full picture of what is happening in a marketplace. For example, while auction clearance rates in Perth are struggling compared to others, it is a market that may be more conducive to positive results through refined negotiation in private transactions. 

Steadier growth

While some pundits were calling the top of the market after flat growth results earlier in the year, we are now seeing that many markets are back on track in terms of growth, albeit at a cooler pace. Across the combined capital cities, we find ourselves with property value growth of 1.5 per cent in July.

A steadier pace of growth is preferable in my opinion, as the past few years have seen growth in the market propelled at a faster rate than many expected, largely due to low interest rate climate.

It is interesting to see that Melbourne has now overtaken Sydney as the growth leader, with Melbourne recording a 13.7 per cent increase in dwelling values compared to a 12.2 per cent increase in Sydney over the last financial year.  

Ride the cycle

Recent CoreLogic data has reported that Sydney and Melbourne are seeing significantly higher numbers of new listings coming on to the market. Sydney, in particular, is seeing strong listing numbers of late. According to CoreLogic, total advertised stock levels across Sydney are now 13.3 per cent higher than the same time a year ago. 

This may be attributed in part to vendors deciding to exit the market in anticipation of a downturn, however I encourage vendors not to act too swiftly in making a decision to sell.

If homeowners do not have a pressing need or wish to sell, they may be wise to consider riding out this cycle until the next one invariably comes along. By doing so, they may be placing themselves in a better position to capitalise on their investment and maximise its potential. 

CoreLogic's Pain & Gain report showed that the majority of the selling public has experienced respectable gains selling property, with only 9.6 per cent of all dwellings sold selling for less than their previous purchase price over the first quarter of 2017.

While the marketplace is still very different from city to city, this data shows that most Australians are achieving positive results from property investments. However, Darwin might be the exception as it continues to be the capital city that has been most negatively affected by loss-making sales.

What lies ahead?

Spring is fast approaching which generally brings a more active period of real estate activity.

Speculation about market movements is inevitable, however, despite all the bubble predictions, I believe real estate has continuously proven to be, for the most part, one of the safer investments that a person can make if it is approached with a long-term outlook. 

I believe that the prospect of a dramatic fall in property prices is unlikely and the Australian property market remains healthy and vibrant.

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What will the new financial year bring for property?

Tuesday, July 18, 2017

By Charles Tarbey

The new financial year heralds a time for change and new things, and this may be particularly true for the Australian real estate market this year. 

Not only is the market demonstrating signs of shifting conditions and changing dynamics between buyer and seller, but recent legislative changes related to housing (which commenced on July 1) may further change the way Australians approach property transactions over the coming financial year.  

Return to seasonality

The latest CoreLogic Home Value Index has shown a slight recovery from the slower results recorded in May, where dwelling values fell 1.1%. In June, CoreLogic recorded a 1.8% increase in dwelling values over the month. 

CoreLogic suggests that despite the short-term recovery, signs are pointing to less steam in the market.

I am of the view that we may see the first ‘real’ real estate cycle kicking in over the coming months, and we may experience a more seasonal market. Strong market conditions, buyer demand and cheap finance mean we haven’t really seen distinct differences in seasonal activity over the past few years, however, a traditionally quiet winter market appears to be emerging.

We are seeing less people at auctions, and less energetic bidding conditions. Clearance rates are trending downwards. While this may be perceived as a negative by some, I believe buyers may be faced with better prospects for property purchases in some situations.

A quieter winter season can actually be a good time to buy, as many are turned off venturing out to open homes in the cold or wet, and there may be less competition when inspecting a property. Not only this, you may be able to see a property in a truer light, or even note how it holds up in less-than-favourable weather conditions. This scenario may help you accurately value a property and decide what you would pay for it.   

It is likely that spring this year will see the traditional increase in stock that is characteristic of the season in real estate, particularly with an influx of completed apartment complexes filling supply lines in some markets.

First home buyer legislation

Recently released data from the 2016 Census shows that home ownership rates have declined, from 68.6% in 1991 to 65.5% in 2016.

In a bid to improve prospects of home ownership, the Victorian and New South Wales state governments introduced new measures to assist first home buyers, including the removal of stamp duty concessions, and grants for builders and purchasers of new homes up to a specified thresholds. These came into force on 1 July 2017.

As such, there has been talk about first home buyers re-entering the market from July and becoming a bigger force to be reckoned with.

I encourage first home buyers to balance the short-term benefit of concessions with a smart, long-term investment decision. It is important not to rush in and buy any property for the sake of getting into the market or utilising concessions. They should carefully consider their financial positon now and if rates changed in the future, and ensure that the property they purchase sits within a predetermined budget that takes these factors into account – not just short-term concessions.

Shift to buyers’ market

It appears that the market is shifting in favour of buyers. While the outlook may be looking a little cooler, there is still a solid, underlying demand for property. Sellers may have to work a little harder to make their property stand out, and when the offers roll in, they may have to be more open to negotiation in reaching an acceptable outcome between parties.

It will also pay for buyers to remember that the financial year ahead may hold the potential for rate increases. While we cannot predict movements with certainty, rates can move quickly and I remind Australians to plan for such scenarios to ensure they don’t come under future financial pressure in a changing market.

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Australian property: More than a tale of two cities

Wednesday, June 07, 2017

By Charles Tarbey

When discussing what is happening in the Australian property market, many tend to focus on the capital city markets of Sydney and Melbourne. There is plenty of chatter about affordability concerns, competitive auctions and avocado brunches that are supposedly preventing young Australians from achieving home ownership in these cities.

While these markets will naturally attract attention due to their size and active buying and selling conditions, many tend to overlook the fact Australia is actually an incredibly broad real estate market that is changing rapidly.

Different markets, different points in the cycle

Markets across the country are at different points in their respective cycles. In Sydney and Melbourne, we hear stories about record prices achieved for properties. However, in other parts of the country, we are seeing properties that are struggling to sell and owners facing negative equity.

CoreLogic’s latest Hedonic Home Value Index showed a 1.1% drop in dwelling values for the month of May. I believe the data highlights the importance of investigating and understanding markets on a state-based, and even suburb-based, level.

This headline figure was largely influenced by a drop in dwelling values in Sydney and Melbourne, with Sydney values down 1.3% and Melbourne values down 1.7% for the month. It appears that the cities may be nearing the top of the market, with increased supply and fewer buyers likely leading to a new phase of softer growth conditions.  

If we look elsewhere, growth was still evident in some markets, albeit moderate growth. Adelaide experienced a 0.8% lift and Brisbane was up 0.3%, taking the markets 2% and 1.2% higher over the quarter respectively.

Perth saw a 0.4% decrease over the month, which may point to the fact the Perth market is nearing the bottom and may be starting to show signs of balance. 

It is important to note that CoreLogic finds May to be a seasonally weak month and Tim Lawless, CoreLogic Head of Research, said that values have fallen during May in four of the past five years.

I am of the view that moderating market conditions are not signalling a dramatic crash in property prices in the near future (as some may suggest). Moderating growth may be better for the property market over the longer term, as it arguably becomes more sustainable.

Markets such as Tasmania, Canberra and parts of Queensland are increasingly attracting investor attention, likely due to the affordability concerns and competitive market conditions faced in the Sydney and Melbourne markets. The ‘halo’ or ‘wave’ effect appears to be hitting these areas, where there are plenty of affordable property options available with appealing lifestyle benefits.

Investors may be able to sell their properties in more heated capital city markets and then utilise the equity to purchase property in a more affordable location, while keeping some money in the bank. This may be particularly true for downsizers seeking locations with lifestyle benefits, either by the beach, or in the country.

Other parts of the country have been heavily affected following the end of the mining boom, and the states have been attempting to find the bottom of the market again. It appears markets such as Perth and Darwin may begin to plateau over the coming months.

These markets also seem to be attracting investor attention as property can be secured at cheaper price points, however I encourage prospective investors to remain cautious. Too much investor interest has the potential to lead to rental oversupply, which can quickly damage an investor’s position. Recent CoreLogic data has shown a large number of Perth residents migrating interstate, therefore investors should carefully consider their potential to find and maintain good tenants in light of this. 

As signs point to softer growth conditions for Australian property over the coming months, professional advice and careful consideration will be as important as ever in navigating Australia’s varied market conditions. I encourage Australians not to rely on headline growth figures, but to investigate conditions within individual states and suburbs when weighing up their property options.

Talk to agents and financial experts to assess your position, and ensure your commitments are manageable should the year ahead hold any changes in interest rates. A level head and an informed position may enhance your prospects to make the most of investments in your respective markets.   

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Has the housing market reached its peak?

Tuesday, May 09, 2017

By Charles Tarbey

At the tail end of last year, I was of the view that more stable market conditions were likely on the cards for Australian real estate. In recent times, growth in the market has been propelled beyond what many expected, and there has been much discussion of late about whether the housing market has finally reached its peak.  

Weaker housing growth has been recorded in April, with CoreLogic data showing a 0.1% increase in dwelling values across the combined capitals over the month. CoreLogic reports this as the slowest month-on-month growth since December 2015. Interestingly, growth in Hobart surpassed the two heated capital city markets of Sydney and Melbourne, recording a 5.1% increase in dwelling values over the quarter compared to 4% and 3.9% respectively. 

Have we reached the top of the market? 

Opinions seem to be quite divided on this issue. Tim Lawless of CoreLogic advised caution in “calling a peak in the market after only one month of soft results.” On the other hand, UBS recently called the top of the Australian housing market, noting that whilst the common trigger of a rate hike is not present, banks are independently rising mortgage rates and sentiment appears to be low. 

My view on all the speculation is that we cannot really determine the top of the cycle due to the existence of so many marketplaces within one country. The Australian property market should not be viewed globally based on what is happening in Sydney and Melbourne. It appears that some may be focusing on these two major capital cities in speculating market peaks that aren’t necessarily reflective of conditions elsewhere. 

In some markets around the country, the top of the market has already come and gone. For example, the Perth property market was fuelled by mining activity and as this activity has slowed down significantly, we are seeing the aftermath with the market facing an oversupply of stock in some areas and property owners struggling with negative equity in some parts. 

The good news for Perth is that some areas appear to be experiencing increasing investor interest, as vacancy rates have decreased and property can be secured at an attractive price. Investors should still remain wary of increased rental competition and potential reductions in rental return due to this influx of interest. 

The Sydney and Melbourne markets likely still have more room for growth, and I don’t think they are quite at the top just yet. 

However, we are seeing demand changing and cooling slightly in some parts, with the number of people attending open for inspections appearing to be slowing down. The offers and bids are still there though, and I believe these markets will continue to offer plenty of reasonable opportunities for growth, as Sydney and Melbourne are expanding cities and supply is still less than demand in many parts. 

An unknown factor for the market will be how the influx of apartments will impact conditions over the next couple of years. There has been much talk about potential apartment oversupply, however no one can accurately predict what will happen when the new apartment stock hits the market for sale. 

A more cautious outlook  

Perceptions of property transactions appear to be changing, as many Australians are viewing potential transactions with increasing feelings of caution. I believe this can be attributed in part to tightened lending and increased regulation of housing finance. 

Regulators have been doing a good job of creating an environment of caution, and with the Reserve Bank of Australia leaving the official cash rate on hold, and lenders independently increasing investor rates, some are changing the way they view and secure finance. 

I believe it is a positive that many Australians are becoming more conscious of the fact that low interest rates may not necessarily stay this way for a long period of time. As a result, they may more carefully review and assess their financial position in relation to opportunities, rather than rushing in to buy. 

The changing role of agents 

Over the coming months, I believe the role of agents may become more prominent in changing market conditions. In busy markets, it may seem as though houses can virtually sell themselves, however I believe there will be increasing reliance placed on real estate practitioners to bring together buyers and sellers to negotiate a price that all parties are happy with. 

As always, I remind prospective vendors not to be deceived by an appearance of success when choosing an agent. Look for the most sold signs – these are the agents who should be attracting your attention. It is not the agent with the most listings posted on Facebook, or the agents with the flashiest marketing, but the agent with the most results in the field who will be your best ally in achieving positive results. 

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Property market update: April

Tuesday, April 18, 2017

By Charles Tarbey

We have recently seen APRA, the Reserve Bank and Australian politicians continue to discuss concerns about the housing market.

Following the Reserve Bank’s April monetary policy decision to hold rates steady, Governor Philip Lowe emphasised the need for strong lending standards in order to manage the increasing risk of growth in household borrowing outpacing growth in household income. At the same time, many major banks have independently increased their interest rates.

My concern is how any legislative changes or independent movements in interest rates will play out in Australia with such disparate real estate market conditions from state to state, and even from one suburb to the next. What may be good for one market might not be good for the next, so regulators and politicians have their work cut out for them in both managing economic risks while also ensuring that the decisions they make are in the best interests of as many Australians, and markets, as possible.

While some markets on the eastern seaboard could benefit from new lending restrictions or slight increases in interest rates, other markets such as Perth and Darwin could really struggle under such conditions.

Supply-side concerns

A key issue in Sydney is population growth and the lack of sufficient supply to support this growth. I am not sure the runaway prices in Sydney can be fixed without addressing supply-side issues.

Contrasting this market, the Victorian and South Australian state governments are good examples of state governments proactively responding to this need for supply. Measures to increase stock, such as creating new suburbs, have created a more balanced supply and demand situation in their respective housing markets and as such, markets more conducive to negotiation between buyers and sellers. 

Negative gearing

Another “hot button” regulatory issue is negative gearing. Negative gearing policies were hotly debated in the lead up to the 2016 Federal Election, and many are continuing to question whether reductions in tax concessions for investors will really benefit first-home buyers.

Negative gearing has been a long-established policy, and there have been unsuccessful attempts to alter it in the past. I am of the view that it is not negative gearing that has led us to the current affordability situation in the housing market, but rather supply-side issues and low interest rates.

It must be questioned whether abolishing negative gearing will be a positive for the national housing market as a whole. Removing negative gearing could be deemed a knee jerk reaction, running the risk of causing more harm than good. Markets like Perth are already in decline and could very well experience further falls in prices if tax concessions are removed for investors without introducing other measures to encourage this group to continue to invest.

It is also important to consider the rental supply these investors are providing to those who are not in a position to purchase their own home, and the fact that any changes to negative gearing incentives may increase the reliance upon the government to provide housing alternatives.

While housing affordability needs to be addressed and strict lending standards maintained, our leaders must be careful to ensure they take into account the disparities in the Australian property market before introducing any new ‘solutions’ that will likely affect each market differently.  

Despite this complex and volatile environment, there is still value in property as an investment, providing it is approached with careful consideration and ideally, with long-term goals in mind.

This is demonstrated by the latest CoreLogic Pain and Gain Report, which showed that over 9 out of every 10 homes resold for more than their previous purchase price over the September 2016 quarter.

To protect yourself from changes in the Australian property market, Australians would be wise to maintain a level-head, stick to a predetermined budget when looking to secure finance and obtain the appropriate professional advice to help make an informed property transaction.

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Property hotspots around Australia

Tuesday, March 28, 2017

The past few years have seen the investor presence in real estate markets across Australia significantly increase. More and more Australians are turning to property as their preferred asset class and taking advantage of the current low interest rate environment to invest in the relative security of bricks and mortar.

Even buyers who may be faced with competitive markets are finding ways to invest in property through strategies such as ‘rentvestment’, where they rent where they want to live and buy in another area that may have more attainable property price tags attached. 

A question I am often asked concerns the best places to invest as people eagerly seek to discover the hotspots for their next property purchase.

The nature of the real estate cycle means that markets are consistently changing and it is difficult to predict movements with certainty. Prudent property investors will be researching, looking at data, engaging with professionals and putting all of this together to make the most informed decision possible for their personal circumstances.

Here are a few of my thoughts on locations in Australia that may hold good prospects for property purchases moving forward.


According to CoreLogic, Melbourne experienced a 1.5% lift in prices over the month of February, and a 13.1% increase for year-on-year.  

The state of Victoria as a whole is a strong market, however Melbourne in particular holds good prospects over the long term as a place for investment due to the strength of the economy and the prices of properties compared to similar property brackets in its northern neighbour, NSW.

Apartments are steadily coming on to the market, but at a slightly greater rate than demand. Unit approvals have risen 32.2% compared to a year ago according to ABS data from January 2017, so investors should remain wary of unit purchases that don’t meet their strict investment rules.

I believe that Melbourne remains a place where property exists in a good price range for such an iconic city, which may mean it endures as an attractive and relatively safe investment destination when taking a long-term view. 

Rouse Hill and Surrounding Areas

Rouse Hill sits around 42 kilometres north-west of Sydney and has quickly emerged as an area with good prospects for property investment.

CoreLogic data shows the median sale price of houses has increased 53.6% over the past five year, equating to a compound annual growth rate of around 9%.

Infrastructure is often a valuable indication of a suburb with good investment prospects as accessibility is enhanced. With construction of the Sydney Metro North West rail project well underway, we have seen many new developments of both houses and apartments emerging in the area.

Homes selling with million dollar price tags have become more frequent as people are attracted by qualities such as the family-friendly lifestyle found in Rouse Hill and surrounding areas, as well its location that is in relatively close proximity to the city.

With such a rapid growth in prices of late many might be wondering whether they have missed the boat on Rouse Hill and surrounding areas. I believe there are still suburbs around Rouse Hill that hold value for investors and it is hard not to believe that Rouse Hill itself won’t continue to enjoy growth over the long term as the train line begins operation and this micro economy, fuelled by the North West commercial district, comes into its own. 

Sunshine Coast

Stretching from Caloundra up to Noosa Heads, the Sunshine Coast region has been on the radars of many Australians.  The area offers a great coastal lifestyle, which makes it an attractive destination that can satisfy the needs of those looking for a new home, rental property or holiday home.

According to CoreLogic’s regional report for the September 2016 quarter, the Sunshine Coast was one of the top performers in Queensland, along with the Gold Coast, and experienced lifts in both house and unit values.

Median values across Queensland’s Sunshine Coast rose by 4.1% for houses and 3.0% for units over the year ending September 2016.

The region may hold good opportunities for investors as properties are still relatively cheap compared to other markets, the region is fairly iconic for both Australians and international visitors, and the area’s relatively close proximity to Brisbane should see it be a desirable location for Queenslanders for many years to come.

However, if the market encounters an influx of interest, there runs the risk that it can result in an oversupply of rental stock. Investors should remain cautious of this and ensure they are borrowing within a predetermined budget to avoid any financial shock should they encounter difficulty in attracting and keeping a good tenant.


The Western Australian market has been struggling for a while now as it encountered the effects of a downturn in mining activity. This has been particularly prominent in comparison to other state markets that have been experiencing continuously strong growth.

CoreLogic data showed that Perth home values have fallen by -0.9% over the three months to February 2017. While prices are still experiencing downward movement in many areas, this trend may begin to attract the interest of investors looking for value laden purchases.

Investors may be able to secure property at a fair price, and should be watching areas in and around Perth as its potential to stabilise is good and any large increase in mining activity can see that property market explode very quickly.

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4 tips for a successful property transaction

Tuesday, February 14, 2017

By Charles Tarbey

When it comes to transacting real estate, it is natural to formulate our property goals based on numbers. With the ever-present influence of price guides, auction clearance rates and headline growth figures upon our decisions, it can be easy to overlook the human aspects of real estate.

While crunching the numbers of a prospective transaction is essential, I believe it is equally important to evaluate the relationship dynamics and emotional influences that may play a significant role in achieving results in line with your property goals.

1. Consider online versus offline strategies

As consumers, we have become accustomed to a wide range of choice when looking to purchase goods or engage with a service. Of late, this is increasingly true of the real estate industry as a variety of different digital and disruptive platforms for real estate sales are entering the Australian market.

Vendors are advised to carefully investigate these offerings and evaluate which best suits their objectives. While it may boil down to a personal choice about how much involvement you want from an outside party in selling your property, I encourage Australians not to overlook the benefits of embracing real life relationships and communication.

Simple actions like chatting to people in your local market who have recently sold and seeking their advice, picking up the phone and speaking to a local agent about your options, or capitalising on their database of established relationships to ensure your property attracts maximum exposure, may make the difference between a good price and a great price for your sale.

2. Embrace auction competition

In heated markets where supply levels may be lower and interest strong, it may be worthwhile selling your property in an auction to capitalise on this interest from prospective purchasers and stimulate a greater sense of urgency for the sale.

Recently, I saw that two great properties with water views located on the same street had sold within a short period of time. One was sold at auction, and the other via private treaty, yet the property that sold at auction achieved a considerable amount more.

Disclosing the price may create a ceiling in some situations, with buyers less inclined to want to pay more. However, auctions can create a competitive bidding environment in which buyers do not want to miss out and may result in a price beyond expectations. This can often be put down to human vs human bidding and powerful communication from the auctioneer.  

In saying this, it will still remain important to weigh up the chosen method of sale in light of local market dynamics as we see diverse conditions across Australia. 

3. Incentivise your agent

Alternatively, in markets where there may be more stock on the market and increased choice for buyers, a private treaty may be a more favourable option. Vendors may wish to consider the value of the commission they are prepared to pay in these types of markets.

With the offer of an incentive such as a higher than market commission, people can naturally be inclined to work harder to achieve the best results. This can be applied to the relationship between a vendor and an agent. 

Of late, it appears that some agents are discounting commissions to attract listings in competitive markets. Vendors should be wary of this as the cheapest commission may not guarantee the highest quality service, and a short-term desire to save money may backfire if it leads to a result below expectations.

Negotiating a mutually acceptable rate of commission with your agent can not only encourage them to work to achieve your expectations, but it may also serve as a good indication of how effectively they will negotiate when selling your property down the track.

4. Think long-term

Finally, the prospect of capital gain is an obvious motivation in transacting real estate. However, some may want to rush and may buy and sell property too quickly in pursuit of a quick profit. Others can tend to be easily influenced by chatter of market crashes or property bubbles, and exit the market too early when they could have achieved better results.

I am of the view that to position yourself for the best possible outcome, property investment should be approached with a long-term outlook in mind.

Recent CoreLogic data from the September 2016 quarter showed that across all gross profit sales realised, the typical length of ownership was recorded at 9.1 years for houses and 7.6 years for units, attesting to the value of holding property for a longer period of time.    

With the appropriate due diligence and professional advice combined with a patient, level-headed outlook, you may be able to better navigate the movements of the real estate cycle in your area and time a transaction for a favourable outcome.

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Property buyers to get power back in 2017

Tuesday, January 24, 2017

By Charles Tarbey

The New Year heralds a fresh start, and for many, it’s seen as the time to make changes in different aspects of our lives. We make New Year’s resolutions about health, fitness and breaking old habits, commence new careers or business ventures and eagerly plan out our short-term and long-term objectives for the year ahead.

Change not only occurs in our own personal lives, it also appears to be affecting the Australian real estate market. As we come off a strong year in real estate, there are many signs that markets around the country will likely experience changing dynamics in 2017.

Conditions look to be stabilising in the New Year, however I believe this is not necessarily a thing to fear. We are likely returning to a ‘true’ real estate market where negotiation can more effectively occur between buyers and sellers to reach a positive outcome for both parties.

Last year, factors such as lower stock levels, access to cheap finance and strong demand for property seemed to create a sense of urgency for buyers in many markets. We saw prices moving into higher territory, where one could argue they should have slowed, as available stock was quickly snapped up by hungry buyers.

This urgency may begin to cool off in the New Year. With supply levels starting to fill in many areas, conditions may change for buyers as they encounter increased opportunities for negotiation when purchasing property. Stabilising market conditions may mean buyers are placed in a better position to make an offer, rather than having to rush in and purchase in order to place their foot on the property ladder.

Unit supply

In particular, discussion of unit supply continues, and this year, we will see the completion of many apartment complexes in various parts of the country. While some would likely still prefer to purchase a house and land, apartments can provide more affordable opportunities to enter the market.

Vendors in some parts of the country may need to be more open to the offers of buyers, and willing to align their expectations with changing market conditions (instead of the conditions existing in what was arguably a seller’s market last year). However, in saying this, the outlook still appears to be relatively buoyant for many capital city markets, with demand remaining strong.  

When looking to sell this year, a key consideration for vendors should be choosing an agent with strong negotiation skills in order to effectively facilitate a meeting of the minds and achieve the best possible results for their property. 

In light of changing dynamics, it will remain crucial to investigate the market on a state-based and even suburb-based level when looking to transact property this year. We are sitting in a country that has a diverse group of real estate markets operating at the same time, so change is going to be very different in each of these markets.

CoreLogic analysis shows the disparity between markets across Australia’s capital cities, as the annual change in dwelling values for 2016 ranged from -4.3% in Perth to 15.5% in Sydney, with Melbourne and Hobart also showing annual capital gains higher than 10%.

This shows that what is true of one market may not necessarily be the same for another. By talking to local experts and familiarising yourself with readily available property data, you may be better equipped to understand how to make the most of a property transaction in your desired area. While no one has a crystal ball to tell how 2017 will play out in real estate, as always, preparation and due diligence will help to place you in a better position to navigate the highs and lows of the real estate market. 

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3 New Year’s property resolutions

Tuesday, December 20, 2016

By Charles Tarbey

Many Australians have long perceived property to be, for the most part, a safe and stable investment. The ‘great Australian dream’ embodies this perception, where one of the biggest goals one can work towards in life is owning bricks and mortar. 

Looking back on this year, it is evident the value placed upon property has only been enhanced. A climate of record low interest rates propelled the market beyond what many expected, as Australians took advantage of this opportunity to transact property and capitalise on the continued phase of growth in many markets. 

Local and international political events caused uncertainty in markets around the world, however, despite this, it seemed that Australian property remained unaffected, as every capital city (except for Perth) is now showing a positive annual trend in dwelling value growth according to CoreLogic. The end of November saw Sydney and Melbourne dwelling values up 13.1% and 11.3% respectively over the year.

As property continues to be perceived as such a valuable asset class, the constant chatter and speculation about what will happen next is inevitable. Australians continue to eagerly discuss the outlook for real estate over the coming year.  

Moving into 2017, I am of the view that the Australian market may begin to moderate. In light of this, here are three New Year’s resolutions to consider as we likely enter a new phase in the property cycle. 

Resolution One – Manage your expectations 

The last few months of 2016 have been characterised by lower stock levels and strong demand in some markets, creating great conditions for sellers who have been able to achieve prices well beyond what was expected in some situations. 

Following this, vendors may continue to base their price expectations on those achieved during this strong year in real estate, but this may not be realistic in a stabilising market. 

I remind vendors that it will be important to align your expectations with changing conditions. We may encounter lower clearance rates at auctions if vendor expectations are higher, in some instances, than what the market can support. 

Understanding local market dynamics and recent sales, as well as speaking to a local real estate agent with a strong knowledge of the area may help to manage your expectations and ensure there is minimal disparity between your ideal price and what can reasonably be achieved. 

Resolution Two – Expand your search 

For many, property is a sentimental investment and while emotion is an undeniable influence, I find that some can let it cloud a good investment decision.  

Others don’t want to buy where they can afford, they want to buy where they want to live. For example, those working in the city understandably want to live as close to work as possible, but this may not always come at a cheap price. 

I encourage Australians to put their emotions aside, and expand their search when hunting for an ideal property. It may be beneficial to look for suburbs that aren’t picked as ‘hotspots’, or areas that may have some negative connotations to them.

In these areas, there can be great room for potential. For example, we are seeing some areas that have previously seen bad news or less favourable reputations experiencing value growth due to development, transport and new infrastructure. 

Often the realities of an area can be very different to what people perceive. It will be valuable to remember that things change over a period of time – these areas may prove to be a good investment in time and may ensure that you are not over-leveraged. 

Resolution Three – Remain cautious of interest rate movements 

During mid-December, we saw the US Federal Reserve raise interest rates for the second time in a decade. I believe this should serve as an important warning to Australians about the potential for interest rate movements in the New Year. 

While we do not have a crystal ball to predict future economic conditions with certainty, this may be a precursor for an upward lift in Australian rates in the near future. 

Over the coming months, careful contemplation about mortgage commitments will be incredibly important. While low interest rates and cheap finance has been an appealing prospect for many, I remind Australians that even a slight increase of a percentage on some loans can represent a significant increase in repayments. For those who aren’t prepared, this can be devastating. 

The prospect of shifting interest rates is not a completely unlikely scenario, so for Australians wishing to enter the market or purchase a new investment in the New Year, careful consideration should be afforded to ensuring your financial circumstances can withstand fluctuations.  

After an extended period of growth, the thought of a stabilising real estate market may be met with concern by some. However, with long-term goals for holding property, which is our preferred strategy, you will be placing yourself in a good position to ride the ups and downs of the real estate market. I encourage Australians to keep these resolutions in mind and as always, seek professional advice to ensure the greatest prospect of success for property transactions in 2017.

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