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John McGrath
Property Expert
+ About John McGrath
About John McGrath - Founder and Executive Director, McGrath Limited

John McGrath is considered one of the most influential figures in the Australian property industry. As Founder and Executive Director of McGrath Limited, , he took McGrath Estate Agents from a lounge room start-up in 1988 to one of Australia's most successful residential real estate groups, listing McGrath Limited on the Australian Stock Exchange in November 2015.

An integrated real estate services business, McGrath today is one of the fastest growing real estate companies in Australia with a strong market presence in NSW, the ACT & Queensland, and a growing presence in Victoria.

In October 2008, John was honoured by the Real Estate Institute of NSW with the Woodrow Weight OBE Award, a lifetime achievement award for his outstanding contribution to the real estate industry.

John himself has become a spokesperson for the industry both in Australia and internationally. John has five books that have reached bestseller status including “You Don’t Have To Be Born Brilliant” and “You Inc.”. In “The Ultimate Guide to Real Estate”, John shares with the reader his invaluable knowledge on the Australian property market.

John is a Director of REA Group and also the South Sydney “Rabbitohs,” which is one of his great passions.

Sydney and Melbourne investors should consider rental yields

Tuesday, March 21, 2017

By John McGrath 

Demand from investors in Sydney and Melbourne is particularly high today following significant property price rises over the past five years in both cities.

Investor appetite for bricks and mortar is reflected in the latest finance figures which show that NSW and VIC together accounted for 76.3% of all new investor borrowings nationwide in December 2016, the largest share of the market on record, according to CoreLogic and the Australian Bureau of Statistics. 

Separately, NSW represented 49.6% of national investor finance and VIC 26.7%. By comparison, at the start of the boom in mid-2012, investor lending in NSW was 37.3% and 25.1% in VIC.

Clearly, investor interest is highest in Sydney and that’s because of its outstanding recent capital growth. But it’s crucial that investors do not forget the importance of rental yields. Right now, the two cities with the greatest investment activity are also the cities with the lowest rental yields.

Drilling down and using Sydney as an example, weekly rents have actually been rising while yields have been falling. The latest Rent and Sales Report from the NSW Government shows the median Sydney rent has risen from $450 per week in the September 2012 quarter to $520 in September 2016. That’s good news for investors who already own property. But, for new investors, the yields they are receiving are lower overall because the pace of capital growth has been much faster than rents.

In Sydney, average yields are 2.8% for houses and 3.7% for apartments, according to CoreLogic. In Melbourne, they’re 2.7% for houses and 4% for apartments. In Brisbane/Gold Coast, it’s 4.1% for houses and 5.3% for apartments. The cities with the highest rental yields are Darwin at 5.1% for houses and Hobart at 6% for apartments.

I suspect the low yields in Sydney and Melbourne aren’t concerning today’s investor buyers because interest rates are so low. Mortgage repayments of 4-4.5% are relatively easy to manage on properties yielding 2.5-4%. But what happens when interest rates return to their long-term average of 7-7.5% and the rate of capital growth inevitably slows as the market returns to normal conditions?

While capital growth should always be an investor’s number one priority, rental returns are crucial for servicing your debt. The only way for most people to make money in real estate is by holding for the long term. So, Sydney and Melbourne investors out there buying today – at what is likely to be the tail end of this boom – need to make sure their chosen investment will provide enough rental income to help them cover their rising mortgage repayments over the next 10 years and beyond.

Today’s investors also need to be wary that supply of rental properties is rising because so many investors are buying, which means tenants have more choice and this might affect vacancy rates.

I’m not saying that investors shouldn’t buy right now. But it’s important to do your sums and make informed decisions based on a long-term view.

Be careful in your property selection too, particularly with apartments given supply will be increasing in the short term due to the construction boom. Make sure there are some unique features that will differentiate your apartment from the rest. This will help protect your rental return, reduce your vacancy periods and maintain your capital value.

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The rise of parental buyers

Tuesday, March 14, 2017

By John McGrath 

Mums and dads buying property for their children are a growing force in Sydney, particularly in the inner city suburbs where property prices have become out of reach for most young people. 

Parental buyers are typically competing against first and second home buyers and investors for apartments in suburbs close to the CBD and near universities such as UTS, the University of NSW and the University of Sydney.

Typical scenarios that our agents encounter include:

1. Parents buying a property as a gift for their adult child to live in immediately

2. Parents buying for investment with the intention of letting their child live there for a period of time, usually during their university years; before resuming leasing to other tenants

3. Parents buying initially for investment while their child is still very young, with a view to gifting the property to their child when they’re old enough to leave home

4. Parents on more limited budgets are joining forces with their adult children and pooling funds to purchase a shared investment, with the child usually becoming the tenant

Parental buyers are typically Baby Boomers or Gen X’s who place a high value on owning their own home and building financial security through property, as they have done themselves. They want the same for their children but as property prices continue to rise during what has become a five-year boom, many parents are worried that their children will never be able to buy in Sydney on their own.

In January, Westpac released its Financial Future Report which surveyed 1,593 Australians with children or grandchildren under the age of 12, as well as 50 prospective parents. About 40% of respondents believed their children or grandchildren would not be able to afford to save the deposit for their first home, according to news reports. Clearly, affordability is on parents’ minds.

Probably the bulk of parental buyers out there today are buying for children in their late teens who are close to finishing school. University or full time work is just around the corner and mum and dad want to give them a place to stay and potentially, a financial headstart by gifting them property.

But other parental buyers are even more forward thinking and are purchasing for children who are still in primary school, or even younger. With interest rates so low, they see an opportunity to buy now and let a tenant pay the mortgage for them until their child is ready to leave the nest.

Among parental buyers are also mums and dads who are going guarantor on their child’s loan rather than buying the property themselves. This usually involves putting their own home up as security.

Other parents are chipping in spare cash to fund the deposit on their child’s first home. Buyers typically need a 20% deposit to avoid mortgage insurance and raising this sort of money can be very tough.

A 20% deposit on a median-priced Sydney apartment is currently $137,000 (based on a $685,000 median as reported in a March report by CoreLogic). That’s a lot of money for a young person on an average wage to save, so parents are increasingly stepping in to finance the deposit.

Sydney’s rising property prices are creating a Manhattan effect, with the inner ring increasingly becoming the exclusive domain of high income earners. The only way for many Gen Y buyers to purchase in this area is with the help of mum and dad.

‘Parental buyers’ is a trend that perfectly demonstrates how the property market will always evolve when challenges arise. Affordability has become a bigger issue than ever before in Sydney and mums and dads are, in many cases, doing something about it.

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Autumn auction season kicks off strong

Tuesday, March 07, 2017

By John McGrath

The Sydney and Melbourne markets are certainly off to a flying start this autumn season. The first two big Saturday auction days of the year – February 18 and 25 – yielded clearance rates around the 80% mark in both cities, despite a very high number of properties going to auction.

According to CoreLogic, Sydney and Melbourne have never had more auctions scheduled for the month of February. Despite this volume, the cities recorded impressive clearance rates which indicates buyer demand is still incredibly strong.

I’ll lay it out for you because these are really remarkable statistics.

Week of February 18

  • Sydney – 661 auctions; clearance rate 84%
  • Melbourne – 958 auctions; clearance rate 77%

Week of February 25

  • Sydney – 729 auctions; clearance rate 82%
  • Melbourne – 1,222 auctions; clearance rate 80%

Source: CoreLogic

In anyone’s language, these are impressive rates of sale. And there’s much more to come, with March typically the month with the highest number of auctions in the autumn season.

At McGrath, the best results in Sydney for Super Saturday were seen on the Northern Beaches and in the City/East regions. Demand was strongest in the $750,000 - $1m bracket, as well as the $1.5m -$3m bracket. These are the price brackets with the highest number of homes for sale and the demand for them is certainly there, with recent clearance rates of 79% and 77% respectively.

Clearance rates were similarly high among McGrath’s Victorian offices (79%) and Canberra offices (100%).

As per usual at this time of year, new stock is coming onto the market but generally speaking, there are still not enough homes available for sale to meet demand and that means inevitable price rises.

The latest monthly CoreLogic Hedonic Home Value Index, released on March 1, shows that there was a 2.6% rise in median property prices in Sydney over the month of February, and a 1.5% gain in Melbourne. Canberra took line honours with a 3.2% gain. By contrast, property values fell -4.3% in Darwin and -2.4% in Perth, as those cities continue to grapple with the fallout of the end of the mining boom.

CoreLogic points to a rebound in the pace of capital gains across the capital cities since mid-last year due to two interest rate cuts in May and August 2016 and an ensuing increase in investor activity over that period.

In the first half of 2016, conditions for growth had actually moderated – which you’d expect after a long boom period in Sydney and Melbourne. But the market effectively found a second wind and in Sydney and Melbourne this was further propelled by a severe lack of stock. These conditions are now carrying over into 2017, with Sydney’s annual rate of growth now at its highest point in 15 years.

So, autumn presents a phenomenal time to sell but Sydney and Melbourne vendors continue to find it hard to buy back in. It’s a significant dilemma.

The biggest winners of this current market will be Sydney and Melbourne sellers who are relocating elsewhere, such as coastal and lifestyle areas where market conditions are far more normal.

If you’re considering a sea change or relocation, you couldn’t ask for a better time to make that move and fully capitalise on what is now a five year boom in Sydney and Melbourne real estate.

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Average capital gain a quarter of a million

Tuesday, February 28, 2017

By John McGrath

CoreLogic’s latest Pain and Gain Report shows nine out of 10 homes re-sold during the September 2016 quarter were sold at a higher price than their original purchase price, with an average gross capital gain of $262,672.

The report makes it very clear that the longer you hold a property, the more likely you are to sell for a decent capital gain. Across Australia, homes that re-sold at a loss had an average hold period of 6.1 years for houses and 6.5 years for apartments. Conversely, homes that re-sold for a profit were held for an average of 9.1 years for houses and 7.6 years for apartments.

Buying and holding is the key to wealth creation in real estate, no matter what type of property you own. Historically, houses have typically done better than apartments in terms of average capital gains but it’s interesting to note that in Sydney, a change to this long term trend is afoot.

The CoreLogic report notes that over the past two years, there has actually been more re-sales at a loss among houses than apartments (although the proportion of homes selling at a loss is extremely low in both the houses and apartments categories). For example, in the September quarter, the proportion of Sydney houses re-selling at a loss was 2.5% and the proportion of apartments was 1.9%.

This reflects rising demand for apartments in Australia’s most expensive city. This trend will continue as Sydney property gets more expensive and affordability constraints restrict more people to apartments. But given apartments are less expensive, they have more room for capital growth, too.

Either way, the main point is you should do well with any type of property if you buy in a good location and hold for the long term.

Among those homeowners who sold at a loss, the average loss was $71,529. The end of the mining boom is making a significant contribution here, with the highest proportion of loss-making sales across our capital cities recorded in Darwin and Perth. This is an important lesson, particularly for investors, that it’s never a good idea to buy in a town solely or largely dependent on one industry.

Across the capital cities, the proportion of loss-making re-sales are as follows:

  • Sydney: 2.3%
  • Melbourne: 4.9%
  • Adelaide: 7.2%
  • Hobart: 8.4%
  • Brisbane: 8.5%
  • Canberra: 12.2%
  • Perth: 19.6%
  • Darwin: 30.7%

So, why would people sell at a loss? There are many typical scenarios with loss-making re-sales, including:

  • Selling too soon after purchase for personal reasons, such as a work transfer or expanding your family and needing more space
  • Selling at the wrong time in the market cycle, for example buying at the height of a boom and selling too soon when the market is softening (again, this usually happens when the re-sale is prompted by personal reasons)
  • Investors who enter the market in good times (i.e. during a boom and/or when interest rates are low) who then sell too soon because they have not sufficiently prepared themselves for rising mortgage rates or ongoing hold costs over the long term

Holding for the long term will definitely determine whether you sell for a loss or gain. The level of loss or gain usually comes down to time in the market and the location of your property.

Here are the Top 5 council districts in the major East Coast capitals where properties recorded the highest re-sale gains. I’ve included the average hold periods so you can see how much time these sellers needed to hold their properties in these locations to achieve such impressive capital gains.


1. Hunters Hill – Median profit $785,000 (median hold period 8.9 years)

2. Ku-ring-gai – $733,500 (6.3 years)

3. Woollahra – $670,000 (6.6 years)

4. Manly – $636,500 (7.4 years)

5. Willoughby – $625,000 (8.3 years)


1. Boroondara – Median profit $574,750 (median hold period 10.8 years)

2. Bayside – $555,750 (9.4 years)

3. Manningham – $524,000 (9.6 years)

4. Whitehorse – $480,000 (11.3 years)

5. Monash – $415,500 (9.5 years)

Brisbane/Gold Coast

1. Brisbane – Median profit $173,250 (median hold period 9.3 years)

2. Gold Coast – $110,000 (8.6 years)

3. Redland – $110,000 (9.2 years)

4. Sunshine Coast – $98,000 (8.9 years)

5. Logan – $94,500 (9.2 years)

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Is it time to fix your loan?

Tuesday, February 21, 2017

By John McGrath

In recent times, most lenders have moved independently of the Reserve Bank and raised their fixed rates. Some have raised variable rates, too. There’s also a difference in the rates offered to investors versus owner occupiers, with owner occupiers tending to receive more favourable treatment.

All of this prompts the question, particularly for investors: is it time to fix your loan?

I had a chat with Alan Hemmings, General Manager of McGrath’s mortgage broking division, Oxygen Home Loans, and asked him whether borrowers should consider fixing now. Here’s what he had to say:

“The average three-year fixed rate over the past three years has been 4.69%, so with fixed rates available today below this figure it is still an opportune time to fix now. There are still fixed rates available below 4%, too.

“Lenders have been increasing their fixed rates mainly due to the increasing cost of funding these particular loans. Fixed rates are funded from several sources including other banks, customers’ deposit funds and overseas markets. Recently, we have seen the cost of funds from overseas markets increase, therefore the banks are passing this on to the customer.

“At present, there is very little difference between fixed and variable rates, particularly when comparing some of the specials being offered by lenders across both variable and fixed loans of up to three years.

“If you’re considering fixing, you need to have a clear understanding of your circumstances over the next period of time. For example, do you want certainty with your repayments? Are you planning on adding to your family? Would you possibly want to sell in the near future?

“Working with a broker will assist in making the best decision to suit your needs. That might be fixing your entire loan, or perhaps only a portion of it to give you flexibility.” 

I also asked Alan what he expects in terms of Reserve Bank decisions on official rates this year.

“Given the moves by banks to increase fixed rate loans, this probably means the next official interest rate movement will be an increase. Most economists are now predicting this, the debate is about when.

“Irrespective of what the RBA does, we continue to see banks move on interest rates and not just in the fixed rate area. Recently, we have seen some lenders increase variable rates for investors.”

Personally, when I’ve borrowed money to buy property I’ve consistently used variable interest rate finance. But if I did sense that an upswing in interest rates was likely, or that I might have some issues with my cash flow in the medium term, I’d be locking in a fixed rate straight away.

Determining what is best for you comes down to your individual goals and circumstances but to help you make the decision, Alan has provided his top pros and cons to fixing your loan.

Advantages of fixing your home loan

  • Knowing what your home loan repayments will be for the term of the fixed period
  • If the Reserve Bank or your lender increases interest rates you are protected for the term of the fixed loan
  • Some lenders will allow you to make extra repayments without incurring extra costs. Your broker can tell you which lenders are doing this and how much extra you can repay per year

Disadvantages of fixing your home loan

  • Break costs might be payable if you repay your loan before the end of the fixed term
  • If the RBA or your lender decides to reduce rates, your rate will not decrease

Home lending finance has become more complicated in recent years. The smart move is to consult an experienced mortgage broker to help you decide what is best for you. Talking to a broker is an important investment in your financial future because home loans are usually the greatest expense in life. Why not find out how to reduce that expense and better manage it over the long term?

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5 ways to win at auction

Tuesday, February 14, 2017

By John McGrath

This Saturday (February 18) and next Saturday (February 25) are shaping up to be very big auction days in Sydney. Given the shortage of stock throughout 2016, competition among bidders was particularly fierce across the city and many buyers missed out.

If you’re among them, you’re probably feeling a bit anxious about trying again this year. But you have to get back out there, particularly now when we tend to see a surge in new listings before the Easter break. You’ll find you have more choice now, but competition will still be strong.

Confidence is a key component of buying at auction and knowledge helps build confidence. So this week, I’m going to give you some of my best bidding strategies to help you get over the line this auction season. 

1. Start low

One of my tactics is to make a low bid to start the auction. At the outset, you don’t know how many interested parties there are and how much they’re prepared to bid. So there’s no need to put in a high bid in the early stages. Just place a low bid and see where the auction goes from there.

The other advantage to bidding first is the auctioneer will note your interest and keep an eye on you, so you’re less likely to be missed when the bidding heats up. Once the bidding starts, just sit tight, size up the other bidders and watch how the auction unfolds.

I wait until near the end of the auction, when the bidding has slowed down and the other bidders are starting to lose steam, to place my next bid. The auctioneer will start the ‘going once, going twice… ’ routine, and then I’ll come in with a clear and confident bid. If the other buyers make further bids, I will immediately respond with a higher bid.

2. Project confidence

The one auction strategy that I have observed working consistently is creating the impression that you will continue to bid until you own the home, no matter what. It’s about projecting confidence and psyching out the other bidders. More timid bidders are often put off by an aura of unstoppable self-assurance and they’ll stop bidding.

3. Assertive bidding

My bids are fast and assertive. Agonising over every bid is a definite sign of weakness. If a buyer is looking worried and having hushed conversations with their partner every time they make a bid, that’s a clear signal they’re near (or over) their limit. So keep your cool, even if you’re only a few thousand from your limit.

Don’t hesitate on your bids. If other buyers are dithering over their bids, you can knock the wind out of their sails by immediately responding with a higher bid. Be prepared to bid confidently up to your limit and then walk away.

I also recommend calling out the amount of your bid in full, rather than just raising your paddle. This allows you to project confidence and determination with your tone of voice. It also reinforces the full price being bid, rather than the increment, which might only be $5,000, $1,000 or even $500.

When the bidding is down to small increments, it’s easy for buyers to lose sight of the amount of money being bid. Calling out the full amount of your bid is a reality check for other buyers.

4. Stick to your walk-away price

The rapid pace of auctions leaves you with little time to make decisions on the fly. Rather than putting yourself in this position, it’s advisable to think through all the angles before auction day. You have to go into an auction knowing at what figure you absolutely will not make another bid.

5. The hand of fate

On the day, the person who wants the property the most and has the biggest chequebook will buy the home. You need to be mentally prepared to miss out, particularly in hot markets, so having a slightly fatalistic approach can help.

Go hard for what you’re after, but in the back of your mind accept that if circumstances prevent you from owning the home, there’s probably a message in that. Experience has told me that fate plays a hand in finding the right home and you should go with it.

Good luck!

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Property in 2017: What you need to know

Tuesday, February 07, 2017

By John McGrath 

The first auction season of 2017 is underway and February 25 is shaping up to be our biggest selling day of the month. Many of you will be entering or re-entering the market now following the long break. Whether buying or selling, I wish you all the best with your endeavours.

So, what should we expect in the marketplace this year? Obviously, the big question is whether Sydney and Melbourne will finally slow down and I’d say yes, that’s likely.

The boom has delivered spectacular growth to home owners in both cities but I’m personally hoping for a period of price consolidation this year. I don’t expect any major correction to prices but we should expect the pace of price growth to slow down.

Demand is still strong, with the first significant round of Saturday auctions in late January producing clearance rates of 80% in Sydney and 86% in Melbourne, according to CoreLogic. Just this past weekend, McGrath had a 91% clearance rate in Sydney from 23 auctions.

We are yet to see what will happen with stock levels this year. A lack of stock was a big issue in 2016 and a key reason why prices continued to rise. This was problematic for everyone. As the year went on, buyers found it increasingly difficult to secure a home and the stock shortage was worsened by sellers holding off because they feared not being able to buy back in.

While overall listing activity remains lower across the industry, our auction activity has continued to increase year on year. We have 542 auctions booked for February across the network (NSW, QLD, VIC and ACT) compared to 517 in February 2016. In Sydney, 349 auctions are slated for February compared to 344 last year.

Eventually, stock levels will rise again. It’s an inevitable part of the market cycle following a boom. There will come a time when sellers can’t hold off any longer and they’ll come to market, which will reduce the tension between supply and demand and cool things down. 

Stock will probably rise in the apartment sector first, with thousands of new apartments coming online over the next two years following a construction boom along the East Coast.

A report from CoreLogic released in May last year predicted 34,300 new apartments would be completed within 12 months in Sydney. By comparison, about 43,500 apartments are sold per year but this includes both new and established apartments.

In Melbourne, the prediction was 29,500 new apartments within 12 months. By comparison, 31,000 apartments – new and established – would usually be sold over this timeframe.

In Brisbane, they projected 16,500 new apartments within 12 months when ordinarily about 15,000 new and old apartments in total would be sold over the same period.

Clearly, there will be more choice for buyers and this will bring welcome relief, especially for younger buyers who have been struggling to get a foothold in property. They’ll finally have a bit of negotiating power as supply continues to rise, as well as the benefit of government grants and/or stamp duty relief for first home buyers. 

However, if you’re looking to purchase a new apartment you need to think long term. As supply continues to rise, prices might soften for a period and you need to be able to wait that out. So make sure you have the financial capacity to buy and hold comfortably.

You should also be very discerning in the property you buy. Look for apartments with something unique and inherently more valuable than typical models – things like an unusually large floor plan or outdoor area, a perfect north aspect and as always, a great location. If your apartment is unique it will hold its value better.

I wish you every success with your real estate goals this year and I look forward to keeping you updated on the latest market trends.

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Why renting is on the rise

Tuesday, January 31, 2017

There’s been a significant increase in the number of Australians renting their homes over the past two decades. As discussed in our latest McGrath Report, data from the Bureau of Statistics* shows 26% of Australians are currently renting their homes, up from 18% in 1994-95.

In line with this trend, the percentage of householders who own their home – either with or without a mortgage, has decreased from 71% in 1994-95 to 67% .

So what’s going on? Is the Great Australian Dream of home ownership dying?

The short answer is no. This ingrained cultural value has been passed down the generations and most people would tell you they’d love to own their own home. But it’s certainly fair to say it’s become harder to achieve in markets like Sydney and as a result, more people – especially the younger ones, are coming up with ways to achieve the dream but in a slightly different format.

The aspiration for home ownership was once all about the house on the quarter-acre block. Now, more people than ever are aspiring to own apartments and not just because they’re more affordable – people also love the secure, low maintenance lifestyle and close proximity to amenities.

Secondly, the dream of home ownership has been replaced by property ownership in the minds of many Gen Ys. They still want to own property – particularly after seeing their parents do well through real estate, but they can’t afford to buy where they want to live. Lifestyle is the priority for these young people, so they rent instead and buy for investment in more affordable markets.

Take a look at the table below provided by CoreLogic RP Data. It shows the five most popular locations for renters in each of the East Coast capital city markets.

With apartment renting, which is the primary domain of young singles and couples (but we are seeing more families in apartments these days), there is a clear preference for inner ring locations.

Among house renters, predominately families, there is a mix of inner ring locations and commuter areas on their city’s outskirts, which are of course much more affordable.

Source: CoreLogic RP Data, FY2016, suburbs with more than 500 properties

There’s no question that affordability is the key reason we’re seeing more people renting.

Currently, with interest rates so low, there are many areas where it is actually cheaper to buy than rent but if you can’t get the 20% deposit together, it’s irrelevant. That’s the part that brings many young people unstuck. In big city markets, a 20% deposit is typically hundreds of thousands of dollars and that’s not easy to save even on a good income. It can take years.

The biggest plus to renting is the ability to live in many different areas so you can try out different types of lifestyles. Try the city life for a while, then move to the beach. Live in a small art deco block with a garden then try high rise living with fantastic residents’ facilities such as a pool and gym.

Renters also have the flexibility of being able to move much more easily than if you owned your home, which would require selling. These days, jobs centres are spread all over our capital cities and people like living close to work, so an inner city renter in Sydney who gets a new job at Parramatta could move there with relative ease.  

I’ll always advocate buying over renting because the wealth creation available through property is the best path to long-term financial security for most people. But if you do rent, why not enjoy these benefits while you can (but keep saving for that deposit!)

*Housing Occupancy and Costs 2013-14, Australian Bureau of Statistics, published October 16, 2015

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The next big tech trends in real estate

Tuesday, January 24, 2017

By John McGrath

Since the advent of internet marketing and mobile technology in the 1990s, the nature of buying and selling has been turned on its head.

A huge range of digital platforms continue to change the method and pace of real estate transactions, with buyers and sellers more informed and better prepared than ever before and the best agents harnessing innovation to improve their marketing power and service style. Specialised apps, price predictors, social media, free market research and cheap independent property reports available for purchase online have all worked to benefit the consumer.

Email, SMS, database marketing and big data have enabled agents to better engage with buyers, and global property portals have expanded the audience for their listings. A raft of business software and bluetooth gadgetry has increased agents’ efficiency and shortened response times to enquiries.

Real estate technology goes from search to service

As discussed in our 2017 McGrath Report, real estate technology began with search and has now extended to service. Consumers want a less stressful experience and are intolerant of agents who can’t provide it.

For example, the experience of opens is changing, with names and numbers still taken at the door but on an iPad that syncs with the agent’s phone and database for more effective follow-up.

Buyers can use apps to pre-register their attendance and skip the queue, and can request and receive a contract via email before they have even left the property.

Scores of small innovations are often quickly superseded. The evolution of the signboard provides an example – once a simple board, it was then given an overhead light, a QR code, then full background lighting and now a touch screen.

Photos on a webpage are no longer enough, with 360-degree photography and fly-through technology providing a more complete perspective and the opportunity to inspect every part of a room.

Location analytics are helping buyers purchase in unfamiliar locations with greater confidence. Buyers can discover an area’s demographics, traffic data, property developments, points of interest, drive times, walk times and street and aerial views with ease.

And there is so much more to come.

Future tech trends in real estate

According to CoreLogic’s Future of Real Estate Report*, push technology, artificial intelligence, virtual reality and blockchains will be the next big tech trends in real estate.

Push technology will alert home hunters to nearby properties for sale and unlock special content to heighten their engagement. Virtual reality will provide an on-site experience for off-site clientele. VR stations in real estate offices will make open inspections an everyday convenience for buyers.

Artificial intelligence will use algorithms to help buyers search, all the while learning from each interaction to understand what the user really wants in their next home.

Blockchain technology and smart contracts will simplify the transaction process and automate procedures traditionally undertaken by intermediaries like banks and inspectors.

Platforms allowing customers to send a single loan request to a multitude of lenders will result in more competition and a better deal on finance for borrowers.

Technology will undoubtedly continue to raise clients’ expectations and the best agents are meeting this challenge through a more holistic approach, including building long-term relationships with their clients and focusing more on ‘outcomes’ over simple sales transactions.

* Future of Real Estate and Property Finance Industries Report, CoreLogic, published April 13, 2016

^ Google Mobile Forum, 2016

# Strategy Forum, 2016

** Momentum, 2016

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No place like home: Aussies stay put for longer

Tuesday, January 17, 2017

By John McGrath

Australian home owners are staying put longer, with the average number of years that capital city residents hold their homes trending up since 2005 from 6.7 years to 10.7 years for houses and 5.9 years to 9 years for apartments. The number of sales transactions has also declined in line with this trend, according to CoreLogic*.

So why are we staying put longer?

Essentially, it boils down to financial reasons and changes in the way we live today.

As discussed in our 2017 McGrath Report, affordability and the costs of buying and selling are major factors. Stamp duty and agents’ fees alone currently run to about $55,000 on a median priced house in Sydney today.

Renovating is also on the rise, which tends to happen at the end of a boom when affordability falls. Instead of trading up, owners draw on new equity to renovate and extend rather than move house. It’s therefore not surprising that Melbourne and Sydney are our renovating hot spots right now, as the following list shows.

Renovation Spending

1. Melbourne: $1.882 billion

2. Sydney: $1.684 billion

3. Brisbane: $766 million

4. Perth: $500 million

5. Adelaide: $299 million

6. Canberra: $111 million

7. Darwin: $57 million

8. Hobart: $57 million

Source: Australian Bureau of Statistics data modelled by Domain Group Chief Economist Andrew Wilson,, published February 27, 2016

A strong economy is also encouraging people to stay put. Despite the GFC, it’s been 25 years since our last recession, so the biggest economic factors that prompt people to sell – unemployment and financial stress, are less at play. People in secure jobs can stay put until personal circumstances demand a change of address.

Which brings us to the second major element affecting hold periods – changes in the way we live.

There has always been a strong correlation between people’s life stages and their housing needs. However, in today’s modern world, traditional trends in the way we live are shifting and this is reducing the necessity to move.

Couple-only households and people who live alone are the fastest growing types of households in Australia today, and they don’t need to move as much as growing families.

Recent Australian Bureau of Statistics (ABS) figures^ show 46% of couple-only and lone person households have lived in their current home for 10 or more years, compared to 28% of families with kids.

Young people are staying home longer, prompting many parents to delay downsizing or a seachange. When they buy their first home or rent with friends or a partner, they can stay there longer because they are delaying marriage and kids until much later in life.

Traditionally, as people’s incomes grew, they would look to upgrade to a better property. Today, wage growth is not nearly keeping pace with property prices, so there are plenty of couples staying put in apartments or small houses until their first or second child comes along.

The average family size is also getting smaller, with a steady decline from 3-4 kids in the 1960s to 1-2 kids today#. This means many families can stay put longer in properties with fewer bedrooms.

We’re also seeing a rise in multi-generational households with couples and in-laws pooling funds to buy a large home that will suit them for the long term. ABS data^ shows the majority of multi-family households stay put for 10-20 years or more.

Our ageing population is also contributing to longer hold periods. Mortgage-free home ownership is highest among older Australians and they prefer to stay put long term if they can, with 47% of owners^ without a mortgage living in their homes for more than 20 years.

Staying put means avoiding moving costs and preserving pension arrangements, which can change after selling.

The GFC also prompted many empty-nesters to delay retirement and stay put while they continued working to replenish lost superannuation.

Buying and holding is the key to success in Australian real estate. Although owner-occupiers are primarily motivated by lifestyle factors, it’s important to remember that your home is your greatest financial asset and the best capital growth always occurs over the long term.

* Property Pulse, CoreLogic, published March 30, 2015

^ Housing Mobility and Conditions 2013–14, Australian Bureau of Statistics, published December 10, 2015

# Births, Australia 2014, Australian Bureau of Statistics, published October 29, 2015

East Coast Capitals with the Longest Hold Periods



Dawes Point: 29.7 years

Regentville: 22.6 years

Ellis Lane: 22.2 years

Vineyard: 22.0 years

Maraylya: 20.9 years


Pinjarra Hills: 16.4 years

Rochedale: 15.7 years

Macgregor: 15.3 years

St Lucia: 14.6 years

Nathan: 14.5 years


Cranbourne South: 22.2 years

Belgrave South: 18.2 years

Vermont South: 18.2 years

Noble Park North: 17.7 years

Warrandyte: 17.4 years


Bonython: 14.7 years

Gowrie: 14.4 years

Hawker: 13.2 years

Chapman: 13.2 years

Palmerston: 13.1 years



Bella Vista: 14.9 years

Haberfield: 14.1 years

Russell Lea: 13.1 years

Drummoyne: 13.1 years

Schofields: 13.0 years


Grange: 11.8 years

Kenmore: 11.3 years

Sunnybank: 11.3 years

St Lucia: 11.2 years

Macgregor: 11.2 years


Braeside: 17.5 years

Wheelers Hill: 15.9 years

Ivanhoe East: 15.7 years

Hadfield: 15.3 years

Viewbank: 14.9 years


Reid: 14.3 years

Monash: 14.2 years

Holt: 13.9 years

Higgins: 13.5 years

Greenway: 12.9 years

Source: CoreLogic; 12 months to June 30, 2016

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