Winter has passed and Spring is here

Here it comes, the consistent placement of properties to the market. You will see property pages and websites grow quickly over the coming weeks. Agents are reporting that bookings are being taken now for campaigns commencing in Mid October. Buyer numbers are up at open houses and well presented properties are selling strongly. McGrath reported Auction clearance rates of 87% and 91% the past two weeks, well above Sydney averages.

Off the back of strong sales in July and August, I am bringing several properties to market this Spring. Keep an eyeout for 76 Hilma St Collaroy (link below), 155 Veterans Pde Narrabeen, 27/122 Ocean St Narrabeen and 53 Norfolk Ave Collaroy.

http://www.mcgrath.com.au/108651/

A clip from Saturday 4th Sept Manly Daily states:
" It is interesting to note that despite the fact that we haven't got a formal government at the moment and real estate went into pause mode over the election campaign, as Spring kicks off, the Auction season is back in business. There are 25 Northern Beaches properties going under the hammer in Mid-September and already agents and auctioneers are starting to juggle dates and open times to accomodate the rush. Agents report that not withstanding nervous jitters in the USA about a double dip recession, and talk of financial pain in Europe, with a number of Eu countries on the brink, Australia in general, and the Northern Beaches in particular, seem to be weathering the housing finance storm. it is very much business as usual here"

My Recent Sales include:
to view Sold properties click on link below:
http://www.mcgrath.com.au/index.cfm?fuseaction=buying.search&id_key=706&listingType=2
1586 Pittwater Rd, Mona Vale $822,000
64 Samuel St, Mona Vale, $1,225,000
8/4 Vineyard, St Mona Vale, $530,000

Currently on the Market: Links below
22 Bertana Cres, Warriewood Price: Over $800,000

http://www.mcgrath.com.au/108175/

Industry News courtesy of RP Data.
The strength of the Australian economy surprised most of the economic community when GDP figures were released earlier this week. The seasonally adjusted figures showed the Australian economy grew by 1.2% over the June quarter and 3.3% over the year. The broad expectation was for a 0.9% increase in the rate of economic expansion.

It’s logical to think that a strong economy is likely to propel the real estate market into another growth phase. Around 95% of the participating workforce is employed, official interest rates have stabilized, consumer confidence remains positive and the mining sector is continuing to see solid demand which underpins the economy.

Despite the strong economic foundations, we would be surprised if Australian home values did continue to climb. As the graph below highlights, home values don’t always move in concert with economic conditions. The housing market generally softens as the economy slows down, but the opposite is not always true.

The property boom that kicked off in 2000/01 provides a recent example. Looking specifically at Sydney, the property growth cycle peaked in June 2002 when capital city home values had recorded 22.5% growth over the previous 12 months. At the same time annual GDP growth reached a peak of 4.5% then gradually declined to 2.3% a year later. When GDP started once again to skyrocket on the back of the mining boom (reaching an annual growth rate of 4.9% in March 2004), Sydney property values actually continued their downwards trend, moving into negative growth between June 2004 and March 2006 despite annual GDP growth remaining above 2.5% the entire time.

The one thing to take from this analysis is that strong economic fundamentals don’t always drive property markets. The stage of the market cycle has a strong influence over growth rates and the momentum of the cycle is difficult to break.

There are quite a few parallels that can be drawn between the market back in 2004 and the one we are seeing today. At the end of 2003 the market was emerging from a strong growth phase led by Melbourne and Sydney. As the market was winding down the resources sector was starting to heat up. GDP growth was healthy, unemployment was in the low 5%’s and trending down and consumer confidence was high. The markets that showed the most growth at this time were firstly Brisbane followed by Perth.

The same may be true in the current market conditions. In Brisbane and Perth growth rates have been subdued since 2008 and the economies are much more intertwined with the resources sector than in other states.




Below is a short video clip I pulled off youtube, I thought it might give you a laugh







For a copy of this weeks just click on the link below.
http://emags.newlitho.com.au/?mcgrath/weekly/4september2010

If I can be of any further assistance, just call me (m) 0411 420 100

Hoping to see you at an open home soon.

Regards

Steven Purcell

Market slowing down??

Housing finance data released this week showed a further slowdown across the sector.

On a seasonally adjusted basis, owner occupier finance commitments for: construction of new dwellings (-7.3%), purchase of new dwellings (-3.2%), purchase of established dwellings (-2.9%) and total owner occupier loans (-3.4%) all recorded falls during March 2010. Over the year to March 2010 only commitments for construction of new dwellings has increased, albeit by only a small percentage, 1.6%. Meanwhile, on an annual basis finance for the purchase of new dwellings is down -21.7%, finance for established dwellings is down -26.0% and total owner occupier loans are down -23.3%.
Source: RP Data
Housing finance data released this week (also)showed a continuation in the trend of fewer housing loans being taken out by owner occupiers (down 3.4 per cent over March), further declines in first time buyer commitments (first home buyers now comprise just 16.1 per cent of all owner occupier housing loans) and a further increase in investors commitments. Investors, based on the value of finance commitments, now represent 32.9 per cent of the market, their highest proportion since February 2005. Source: RP Data

On the Ground, agents are reporting good numbers thru open houses but a tightening of committed purchasers. After several weeks of good media, talking the market up, we are now seeing articles advising caution when purchasing. A speculative Stock Market is also creating jitters as investors pull out and put their trust in cash reserves.

In a positive sign for housing supply, new dwelling approvals jumped 15.3 per cent on a seasonally adjusted basis in March with 16,383 new dwellings approved for construction over the month. Compared to the same time last year dwelling approvals are up 52 per cent, although this is being measured from a very low base. Additionally, the March figures are being dragged upwards by a huge spike in unit approvals which were up 60 per cent compared to house approvals which were up just 0.5 per cent. The unit approvals data can be quite lumpy and the large increase is likely to be due to several large unit developments gaining approval during the month.

In other news, the Reserve Bank has once again increased the cash rate by 25 basis points taking the average standard variable mortgage rate to about 7.4 per cent. The cash rate has now risen over three consecutive months; historically there has never been four rate rises in month to month succession. The Reserve Bank Governor has declared interest rates are now to about average levels providing a hint that interest rates may remain on hold over the coming months. Source: RP Data

Last Months Property of the Month: 1 Malcolm St, Narabeen was snapped up by two local investors. The prime position of this property offering uninterrupted views of the Ocean and with an outstanding rental return was felt to be great buying.

This months property of the month will be featured in next weeks BLOG. Located on Pittwater Rd at Mona Vale and backing onto Mona Vale Golf Course, this 4 bed, 2 bath 2 car home on 620m comes with an inground pool and the serenity of a Golf Course locale. Stay tuned for pics soon.

For your copy of this weeks McGrath Magazine, click the link below.

http://emags.newlitho.com.au/?mcgrath/weekly/22may2010

If you need any assistance or are considering going to market, please call me for your no obligation chat. Steven Purcell on (02) 8914 3215 or mobile 0411 420 100.
Hope to see you at an open home soon,

Regards

Steve

AUCTION or PRIVATE TREATY

Outside of "How much do you charge?", the question of Auction versus Private Treaty is the most common. There is a great deal of misunderstanding of the two methods of sale and it is true that the vast majority of agents couldn't tell you the pro's and con's of either method.


Firstly, you have all heard about Auction clearance rates, this is the percentage of Auction properties sold before or on the day. In Sydney this has been averaging around the 70% mark since Christmas. Of the remaining 30% approx half will sell with 7 days with the final 15% requiring additional marketing and more commonly a price reduction. So we can say with confidence that 85% of Auction properties sell within 35 days with the vast majority selling in 28 days or less. With private treaty sales, it is never reported how many days they spend on the market. However my statistics consistently show that time on market for Private treaty sales is on average 60 days. In fact the average for Mona Vale is 93 days. Thats more than double. Thats twice as much cleaning, twice as many mortgage payments, twice as long bridgeing finance and twice as many open houses and private inspections, and twice as long media marketing campaigns.

Secondly, it is also a common belief that Auctions are dearer. Personally I believe in marketing all properties to the vendors budget, whatever that may be. There is no point telling everybody you got the best price when half the buying market didn't come thru your home. You will have all seen both Auction and Private Treaty properties advertised in the print media. The only true cost difference is the Auctioneers fee of approx $400.

Thirdly, there is a myth out there that if you put a high price on your property, you might just get it. Let me put this scenario to you......your a buyer, looking for a new TV. You've been shopping around looking at which brands have more features like multi AV ports, HD ready, digital reception, attractive stand etc. Those that you like are all priced betwen $2000 and $2250. Then while your out looking on a Saturday morn, you see a TV that is $2950, yet it looks just like the others, has the same features, is the same colour, does the same thing......would you buy it or would it just re-assure you that the other TV is better value and that it would be a smart decision to buy the other one because that shop is greedy and just wants to much.

Accordingly, if you chose Private Treaty you need to price your home according to the competition so as to attract buyers to your home. This is always difficult because you dont want to underprice it because nobody will pay more than you ask but you know if you overprice it you will force the buyers to your competition. If you chose the Auction method you can be flexible with your price, allowing you to attract many more buyers who you feel once in your home will connect with it and become attached and then negotiate beyond what they were willing to spend when they woke up that day. Essentially Auction is Private Treaty with a deadline.. it allows you total control over the marketing, price setting and final aceptance. It allows you to sell prior, on the day or afterwards in negotiation and it guarantees an unconditional sale, not one subject to Building and Pest inspections or finance approval.


Fourthly, I hear this all the time. "I wouldn't buy at an auction so people wont buy this at Auction". I sell 70% of my Auction properties prior to Auction, for exactly that reason. Alot of buyers will negotiate prior to avoid bidding, this is in the vendors advantage.

To discuss in more detail the benefits and drawbacks of each method you can call me directly on 8914 3215 or leave a question in the comments section and I will respond.

PROPERTY OF THE WEEK - 1 Malcolm St Narrabeen - $1.76m

This property is incredibly unique. 164 sqm of cafe, but zoned residential. It comes with a 3 bedroom house to the rear and also a granny flat which was the garage originally. An Icon on the Narrabeen peninsula, it is returning $113,000 in income and is available for inspection by appointment. Call me for further details on 0411 420 100

John McGrath has issued his Autumn Market Review. Read it online - Click the link below

http://emags.newlitho.com.au/?mcgrath/brochure/jmcgrathsmarketreview-autumn

If you found that interesting and would like to read more from John follow the link below to his personal blog

http://www.johnmcgrathblog.com.au/

Haven't made it your local cafe for this weeks McGrath magazine. Read it online - click the link below.

http://emags.newlitho.com.au/?mcgrath/weekly/13march2009

Thanks for reading this weeks BLOG. If you or anyone you know is interested in knowing the value of their home or is considering going to market in 2010, have them call me. It is easy to make a mistake in this area and advice is always free.

See you at an open home.

Regards Steve

T 8914 3215 M 0411 420 100

E stevenpurcell@mcgrath.com.au

The Summer market wrap-up

The Summer market has come and gone and it concluded with what the Manly Daily called Super Saturday. Saturday 27th Feb contained 33 Auctions on the Northern Beaches, which was approx double the normal number. A Statistic you may find interesting is that the average days on market for an Auctioned property is 31 compared with a Private Treaty (For Sale) property at 68 days. This can be attributed to several compounding buyer behaviours which when targeted will result in shorter campaign length, less overall marketing costs and less holding costs. If you want to know more just call Steven Purcell on (ph) 8914 3215

Keeping you updated:

Warriewood Sales for February.

Address............................Bed/Bath/Car .......Sale Price

53 Alameda Way............4/2/2.......................$821,000

6/3 Fantail Ave..............3/2/2.......................$635,000

23/30 McPherson St.....3/2/2.......................$575,000

6a Sydney Rd.................3/2/1........................$880,000

14 Warriewood Rd..........4/2/1.......................$889,000



Mona Vale Sales for February

86 Darley St.....................3/2/2.......................$702,500

30/16 Darley St..............1/1/1........................$375,000

40A Elimatta Rd.............5/3/2.......................$1,210,000

4 Foley St.........................4/2/2.......................$755,000

13/6 Foley St...................2/2/2.......................$635,000

10 Halesmith Rd.............4/2/2........................confidential

12/68-70 Park St............3/2/2.......................$967,500

6/46-50 Park St..............2/2/1.......................$680,000

64 Rednal St.....................4/3/2.......................$2,850,000

45 Samuel St.....................4/1/2.......................$1,170,000

5 Southbourne Way.........3/-/-........................$865,000

1/18 Surfview Rd.............2/1/1........................$710,000

6/2-6 Vineyard St............3/2/2.......................$590,000

19/24 Waratah St.............2/1/2.......................$620,000

20/24 Waratah St.............2/2/2.......................$730,000



Just recently I attended a business breakfast, at which Mark Bouris was the keynote speaker. Well known for his Wizard Mortgage business which he sold recently to GE for $400 million and more recently for his TV appearance on Channel 9's "The Apprentice". He spoke of his opinion on the banking industry and their effect on the economy and more importantly the decision making process of the Reserve Bank.

Briefly; As availability of overseas funds is becoming limited, the Four big banks require locally sourced funds to maintain their mortgage business. It is their Home Loan business which makes up a great deal of their profit margin. Accordingly, the banks will raise cash deposit rates to attract cash investors and try and avoid those investors switching to equity based structures. In order to maintain a minimum 3.25% margin on loans they will continue to raise Home Loan rates as they scramble for those cash deposits. Essentially this means that it is the local cost of funds that is driving up Home Loan Interest rates. Interestingly the Reserve Bank no longer needs to raise rates to curb inflation as the banks will do it for them. We saw this theory tested in when the Reserve bank left rates on hold at the last meeting, despite many economists predicting a fourth consecutive hike. Mr Bouris believes that we need more banking entities in the marketplace and he is a great believer in Credit Unions and Building Societies. Their not for profit statis allows them to reduce their margins to assist SME business and their members via competitive Home Loan rates. Unfortunately the great majority of their lendable funds must come from their cash holdings as they are less attractive to the international money fund operators. The effect on our economy, SME's and the mum and dad investors by the four bank monopoly is widespread and quite evident. The costs of Credit for business is being driven up and the cost to continue trading is rising. Banks have raised their margin on loans from 1.65% in 2008 to 3.25% in 2010, by not passing on all of the Reserve Bank cuts and loading the rises in recent years. This is great for the shareholder but not so good for the borrowers. Mr Bouris is a dynamic advocate for the mums and dads aout there and I urge you to read or listen to any of his publicly available comments.

Is your current mortgage the best you could have right now?
If you would like an independant, no obligation, no cost broker to look at your current mortgage and see if there is a better product out there then drop me an email at: stevenpurcell@mcgrath.com.au


Who do you know? - Forward this on.
If you know anybody in the Mona Vale to Warriewood area who would be interested in some of the details I provide here, then pass this blog onto them or send them this link: http://www.stevenpurcell.blogspot.com/



For this weeks McGrath Magazine, hit the link below.

http://emags.newlitho.com.au/?mcgrath/weekly/27february2010



Thanks for reading and making it to the end of this weeks issue, if you need me or any of the information that I can offer, you can call me in my office on (ph) 8914 3215 or email me at stevenpurcell@mcgrath.com.au



Take Care



Steve

Whats the market doing?
As most agents would report, 2009 was a year we all got beaten up, almost all market sectors fell due to the GFC and the only sector that held and possibly gained was the First Home Buyer market thanks largely due to the Gov't stimulus packages and Stamp Duty relief. Unfortunately for everybody else with property in excess of $600,000, selling into a depressed market was an unavoidable option. For those that held on, relief may be at hand.
Without wanting to sound too optimistic, we seem to have turned a corner. On the back of media reporting that Australia has the most sound economy in the world right now, coupled with the Reserve Bank leaving interest rates on hold, buyers are once again coming to open houses and good numbers are being seen across most price brackets.
RP Data reports that although Sydney has been down approx 30% in listing volume, listing activity as reported by agents completing Market Appraisals is up and rising, reaching levels well in excess of those seen last year. The interpretation of this is that Agents are expecting listing volumes to increase to meet what we are already seeing as growing buyer numbers.
For those of you who have been watching the media lately, the vast majority of market commentators are predicting increases of upto 10% across Sydney. To see what our own expert has to say follow the link below.

John McGrath CEO of Mcgrath Estate Agents has reported on his pick suburbs.
Click the link below to be taken directly to John Personal Blog
http://www.johnmcgrathblog.com.au/

This weeks McGrath Magazine can be viewed direct from your screen, just click on this link.
http://emags.newlitho.com.au/?mcgrath/weekly/20february2010

I see many people who are simply unaware of what the value in their own home is and more importantly what that equity can help them achieve, should they wish to invest, if they were to unlock it. If you are unsure as to what your home is worth you can contact me for a free, no obligation property report.
If for the only reason, to ensure that you have the property insured for the replacement cost in todays marketplace.

You'll see over to your right a quick CLIENT POLL I am conducting. I would like to know whats important to you when you are selecting an agent. If you could quickly check a box I would really appreciate it.

Finally today: a quick announcement:
McGrath Estate Agents has re-enetered the Narrabeen to Newport market with their new office in Mona Vale. Located on the 3rd floor of 1792 Pittwater Rd, the team here is excited about bringing exceptional results to the local community. Call me on (ph) 8914 3215 for your free suburb report or just sign up to my receive my BLOG for all the local results.