The Market - What's Happening Out There?

In writing this article I have looked back on my predictions for 2012 which were published in this magazine at the start of the year.

So far it seems that, unfortunately, those predictions seem to be fairly accurate.

On a positive note, the RBA has dropped rates several times and the general consensus seems to be that there will be another one soon, possibly in September’s meeting. This continued downward trend has certainly helped the market and the affordability of property everywhere, however other influencing factors have not been so kind.

Market confidence generally seems to have maintained a largely negative trend, primarily due to the continued instability of the Eurozone and its effects on the global economy and share markets. Let’s face it, having doom and gloom on the news every night with stories of further bailouts for Spain as well as Greece and share prices rising and falling daily, tends not to install a lot of confidence that many consumers need to “take the plunge” and take on a new large debt.

The other side of this is that there is generally a shortage of new properties being placed on the market as many people elect to stay where they are at the moment and play it safe.

On this basis I doubt that many areas of the state will see price growth over the latter half of the year, but hopefully this stock shortage we’ll keep a floor under house prices and we will not see falls either.

An area bucking this trend appears to be the lower end of the market with first home buyers and investors reasonably active in most areas.

Rentals still appear to be the most positive area of our business going forward with continued, but slowing, growth in rents and definitely more buying activity from investors in most areas. The surety of that extra cash flow for the office in these tight times is what many wise agents seem to be focusing on at the moment.

There is no doubt a pent up demand building in the market, people want to buy their first home or move into a better one and in many cases can already afford to, but that confidence is lacking. If we can see out this quiet period I am sure that some very good times lie ahead as that pent up demand is released in a flood of activity as soon as Europe can cure its woes.

 
Hang in there and EAC will hang in there with you, giving you the tools to make the most of whatever market we have to deal with.

Testimonal...

Testimonials...

The performance of Deb Cummins was very good. We were kept informed at all stages of the campaign and progress of any submissions made by prospective purchasers. Deb also listened to us as ‘the sellers’.

D. & R. Snell (Albion Park Rail)

 

Deb Cummins was a pleasure to deal with. She answered all our questions promptly and obtained copies of any documentation we required.

J. & K. McCrudden (Oak Flats)

 

 

Deb was a pleasure to deal with and made the process of purchasing a property super easy and hassle free. I would recommend Deb to all my friends and family and would love to deal with her again.

M. Graovac (Oak Flats)

Testimonial...

Thank you Deb Cummins for meeting with us and your hard work in answering our questions.

A special Thank You to Dale Whittaker. Your communication has been outstanding in enabling us to purchase with ease.

We look forward to further dealings with your office in the very near future. Keep up the wonderful work.

K. & N. Aldridge (Oak Flats)

Why Use A Full Service Agent?

Private sales of homes have always been around, we have all heard stories of owners who have supposedly sold their own home and avoided paying an agent commission. The big question is – have they really saved money, or have they actually cost themselves money as well as the time and hassle involved?

When selling what is most likely your biggest asset you want to be sure you get the very best price, and this is exactly what a full service agent is trained to do and they have the tools for the job.

Some of the factors that help him do his job are:

1. He works with property and people every day, he knows the market, what is in demand and what is not.

2. He has access to the latest accurate sales data, he knows what other properties actually sold for, this is often very different from what they were advertised for or what the owner may tell you he sold it for in order to save his pride.

3. He has access to this magazine and its sister website, the leader in the Illawarra as well as realestate.com, the largest property internet site in the country, both of which do not accept private ads. This alone dramatically cuts down a private sellers’ ability to connect with a potential purchaser who will probably never know their house was for sale.

4. He is a trained negotiator, he can be the middle man that gives you advice and time to think so you get the best deal, it is very hard to do face to face with a buyer who may well be more skilled at negotiating than yourself.

5. An agent keeps a data base of qualified clients that he can tap into immediately, people who he knows are genuinely looking for homes, not just ‘tyre-kickers’.

6. He looks after the sale once it is negotiated through until settlement. There are often 2, 3 or more issues that come up after a sale is made that need to be resolved and may require further negotiation.

The peace of mind that these factors bring to people who engage a full service agent can be compared to the pitfalls a private seller will face:

1. Firstly it is pricing the property correctly. Sure people can check the internet and compare it against what you think are similar properties, but they have not been inside those homes to be able to properly compare them to their own. They also don’t know what they actually sold for, unlike an agent who has the data. Overpricing can be just as damaging to a potential sale as underpricing.

2. Their avenues of advertising are limited and expensive, they don’t get access to the major internet sites, the dominant publication and will potentially miss their “dream buyer” because they never knew their home was for sale.

3. The time it takes to show prospective purchasers through, they often want to come through while you may be at work which may be inconvenient for you or on the weekends when you have other plans.

4. If buyers know you are selling privately usually the first thing they want to do is reduce their offer by the amount of the commission because they know you are saving it, they want the benefit of the saving you are supposedly making.

Think of it like this, if you had to go to court would you represent yourself or get a good solicitor? Even solicitors rarely represent themselves, they know the value of good advice from a third party. They have a saying, “a solicitor who represents themselves has a fool for a client”. The same goes for selling property, a good agent will usually negotiate enough extra to cover their fee plus save you all the hassle.

Why would you put yourself through it and usually cost yourself money as well. Get a professional and have them earn their fee.

Testimonial...

Sharon Puckeridge, Property Manager, at Dougmal Harcourts Oak Flats has managed a residential rental property at Albion Park Rail, owned by me and my wife, for the past 6 years.

Both my wife and I were impressed by Sharon's professional approach to our needs at our initial meeting early in 2005 and were happy to pass the management of our property over to her.

To date our original assessment of Sharon has proven to be correct. Unlike so many rental property managers encountered nowadays Sharon's focus on us as her primary client in the leasing arrangements has been consistent. We have appreciated her mature approach to our business and have often benefited from her advice.

Regards,

Richard & Helga Burnett

Testimonial...

After listing our vacant land with another agent, we didn't receive a single offer and communication was poor. As soon as we listed the property with Deb Cummins and her office, we started to receive expressions of interest and some offers right away. Before long, we received the right offer and now await settlement. To the credit of Deb Cummins and her hard work, we can now plan our next move.

P. Cudina (Flinders)

Extremely Impressed!

Testimonial...

We are extremely impressed with the service Dougmal Harcourts Oak Flats has provided us. They are very professional and knowledgeable when it comes to selling houses. Their service is outstanding and we would recommend them to our friends and family.

K. & D. Alchin (Albion Park Rail)

What's Ahead For 2012...

The new year has arrived and as usual it is full of predictions, so I thought I would throw mine in as well and we can all judge their accuracy as the year progresses.

Obviously some of the factors that are going to affect our property markets are how the R.B.A. reacts to our two speed economy, the European debt crisis and its impact on financing overall, with a general tightening being likely and I believe, more importantly, how both of these impact on the confidence of the average consumer.

With almost 100% of economists agreeing, it seems a reasonably safe bet that the R.B.A.’s first meeting of the year in February will deliver another cut in official rates. Interestingly the ANZ Bank in particular has disengaged from this cycle and is announcing its own rate decisions each month prior to the R.B.A.’s monthly meeting. They cite other global funding issues being equally important as the R.B.A.’s official cash rate in defending this decision. January is the first month for these announcements so it will be interesting to see how they move, but with competition increasing within the banking sector generally I think we will see rates fall over the year, which can only be a good thing for our industry as a whole.
The European debt crisis still has a long way to go in my opinion, with many twists and turns throughout the year to come. I am neither wise enough or game enough to predict the eventual outcome but I am sure the constant reporting of this major bad news story in the media will continue to have a negative impact on consumer confidence generally as well as share prices across most sectors. It is this lack of consumer confidence that looms as a major threat to the year ahead, not just for our industry but the economy as a whole.

The State Government decision to remove the Stamp Duty concession for first home buyers of existing homes saw a rush of activity from this sector at the end of last year, but if history is any guide I don’t expect we will see many first home buyers now for the next 6 months or so, as was the case when the government removed the extra $7,000 first home buyers grant a couple of years ago. These types of incentives tend to bring demand forward and then leave a hole when they are removed.

On a positive note I believe we should see strong demand from investors with rents continuing to climb and vacancy factors at near record lows in most areas. This is leading to increased rental yields generally and in a number of cases, positively geared investments. This trend is likely to continue, particularly if capital growth is subdued and interest rates continue to fall. It may also see some frustrated renters “bite the bullet” and look to buy, particularly if affordability improves.

Over the whole state I feel the market is likely to remain patchy, some areas doing well while others struggle. Local issues will have an impact as the floods in the Northern Rivers area and the mass layoffs by Bluescope in the Illawarra did during the year just past.

So it looks like a year of both challenge and opportunity, and I personally hope that we can assist our members meet those challenges and capitalise on the opportunities going forward with our cutting edge technology, cheaper prices and great staff giving great service.

All the best of the year ahead.

Dale Whittaker
E.A.C. - Chairman