SOLD -but at what price!

The key measure for a seller in this market is not the time taken to sell, but the price obtained. Better to get the right price with the right prospect, rather than best ”instant” price.


In a buyer`s market, such as that which has prevailed and been prolonged by very aggressive price marketing by many agencies, this invariably means buyers offer very low prices and sellers under pressure think it is the market value & accept.


This process is driven very much by a local upsurge in the auction process with use of price leading copy such as “Bargain hunters welcome”, ”Make an offer” – it is no co-incidence that auction clearance rates are up & sale price levels have “dived’ in the last 12 months both in Mt. Coolum and the Sunshine Coast per the domain.com.au graph

Green - Mount Coolum   - Blue - Sunshine Coast

Never has it been as important as now to utilize an experienced agent with extensive marketing & negotiation skills. Experienced territory agents know the likely price range for properties, market the features & work hard to negotiate a win - win result.

The role of a real estate agent is to maximize the sell price for the seller, bearing in mind the market conditions – anybody can sell a property at give-away prices.

Owner-occupiers, the overwhelmingly buyer demographic, pay for value relative to their living needs. They do not buy only on price.

Investors are bargain hunters by nature who buy on price & return, attracted to price driven marketing.

Significant asset sales demand the most professional services!

Current auction sales performance - Mount Coolum

Generally speaking, the auction process has limited acceptance on the Sunshine Coast. Historically, clearance rates as measured by pre and at auction sales hovers around 20%,  a very low rate.

Only 1 in 5 sell without a price, which is supposed to be the big advantage of the process.

Sales results in  Mount Coolum have received a big boost over the last 12 months from the long term average as detailed below. This is based on a small number of sales, mainly because of distressed sales in the new up market estate of The Boardwalk, and very aggressive price marketing of the agencies involved.

The key is not that a sale took place, but at what price?

Marketing has consisted of headlines designed to attract the "scavenger" and "bargain hunter" familiar with the process and cashed up, a very limited segment of the market  and not offering true market sentiment.

To advertise  aproperty with headlines such as "Bargaiin hunters welcome", "Owners seek immediate action",  "Home required to be rescued from neglect", "Make an offer", "Interstate owner says sell" all scream give-aways, which is what eventually occurs.

Find all about Mount Coolum real estate from the local expert

Create the right balance

People struggle with using colour in home decoration, but the impact can be achieved without being garish.
* To achieve a successful balance, the use of natural rugs or dark-stained furniture will ground the colour scheme.
* When selecting cushions, choose a varying colour palette & mismatch the patterns. Mismatched cushions look best on a plain fabric sofa or a stripe or small pattern.

* With furniture selection, invest in a good quality sofa with a classic shape that won`t date & can be     recovered over time.         

* Mix antiques & modern furniture to create a layered, interesting & unique look.

* Invest in beautiful paintings
* Create unique tablescapes on coffee, hall & sofa tables using your collection, for example, family photographs, books, old boxes or vases of flowers.
* Most of all, buying things you love will create their very own unique thread that joins them together.

The ‘goss’ on Coolum area sales

House for sale statistics in our local, established area show a significant tightening of house stock availability, which strongly suggests we are moving away from the strong buyer “discount” market of recent times to a more balanced market.

The situation with high rise apartments/units is quite different, due mainly to pressures on the higher investor ownership & their general unsuitability for owner-occupiers.

This class of property ownership sees much better use of capital elsewhere, and often this divestment is more of a financial necessity than a desire!

Over many years I have tracked statistics for the same house population of some 2.200 in Mount Coolum and Yaroomba, & a range of between 3% to 4% of the housing population has generally been on the market at any one point in time. Over 4%, or under 3% historically means market change skewing towards either the benefit of the buyer or the seller.

By contrast, It got to 4.5% last year, is now down to 2.15%, this is  a reduction of over 50% of houses on the market.

 Put simply, the choice for buyers is much diminished, which theoretically should lead to more realistic offers from buyers and potential sellers now looking to make that move.

This change in the older, established areas is overlooked by the casual observer as relatively new estates such as The Boardwalk and Peregian Springs continue to suffer from oversupply at higher prices.

These developments were fuelled by builder and investor “spec” home construction, believing prices would continue to rise exponentially, & also to benefit from high depreciation allowances during the first 5/7 years of a new building.

The cream of depreciation has been claimed, prices have fallen well below replacement cost & financial stress has kicked in, hence properties are readily available in these estates

The combination of high stock availability, very low prices on record & price marketing by leading agencies, , eg, “bargain hunters welcome”, “owner must sell”, “make an offer” continues to shape buyer expectations downwards in these estates.

Sooner or later the penny will drop with buyers as to the true value of the more spacious, well presented, older, established home between $400,000 and $500,000, &those buyers early enough to recognize the opportunity will buy, those that don`t will miss out because this stock is in very limited supply.

Coast $4b development

Clive Palmer has detailed "jaw dropping" plans to spend up to $4 billion to create an international hotel, casino and tourism destination on the Sunshine Coast on a par with world-class facilities in Dubai.

Palmer recently puchased the iconic Hyatt Coolum Resort, which is the largest employer in the immediate region, removing the Hyatt from management and renaming the resort as the Palmer Coolum Resort. Many jobs have been lost in the short term as he strives to stem the massive losses apparently incurred durng the 20 year Hyatt reign

The billionaire met Sunshine Coast Council Mayor Mark Jamieson for almost three hours recently to reveal his plans which might include possible development of a chairlift or skylink to Mt Coolum.

Bill Schoch, general manager of the Palmer Coolum Resort, is reported as saying the "multifaceted" plans involve a $3 billion to $4 billion investment which would put the Sunshine Coast on the international map.

Mr Palmer apparently wants to make a major destination of world-class significance at Coolum similar to developments in Dubai and it will be on a massive scale but it will all be done with local sensitivity according to Mr Schoch.

Mr Schoch said it would be some months before the plans were made public because Mr Palmer wanted to ensure his plans were likely to be approved by various levels of government before he announced them.

Palmer is known as an eccentric, vis a vis his tourist project to develop a Titanic replica, but as a multi-billionaire he has very deep pockets and everything he talks about must be taken at face value.

New international terminal opens at Sunshine Coast Airport

Sunshine Coast Council Newsletter - 28TH June 2012

Sunshine Coast Airport has begun a new chapter with the opening of its international terminal yesterday, just in time to accept the first-ever international scheduled passenger flight touching down on Sunday 1 July, from New Zealand.

The new terminal opens the way to further develop relationships with world tourism and business markets, to attract new business to the region and to assist existing businesses to expand and to export.

Recently completed works have added an extra 500 square metres to the domestic and international terminals by using cleverly designed moveable walls. The walls separate the international/domestic areas while international flight numbers are limited initially, and can be switched from domestic to international use and vice versa quickly and efficiently.

Sunshine Coast Airport is one of the three principal drivers of the Coast’s economy, along with Maroochydore city centre and the Sunshine Coast University Hospital precinct.

The latter is a $2 billion dollar development, and the portents for the Sunshine Coast business property market, including Coolum property and real estate is significant.

Further details on these developments may be found at http://www.coolumproperty.com.au/

Don`t spend a fortune updating a tired bathroom

*Add to the illusion of space with a frameless shower screen & mirror

*Paint over tired tiles
Prep with a de-glossing liquid, prime & finish with specialist products, or professionally finish with thermo-glazing surfacing.

*Swap dated tapware for gleaming chrome

*Tired bath?
Try re-enamelling - done in situ in a day & surfaces will gleam, or replace with a modern style free standing one

*Clean discoloured grout
Ceramic tiles don`t wear but grout does. Clean the grout & seal, or if flaking & cracked, have replaced.

* Update your showerhead
An overhead rain-style showerhead simulates a downpour and is a popular option.
*Install a new toilet - go wall-hung for the latest look or a classic back-to-wall-close coupled toilet.

*New look vanity - keep the carcase but opt for new doors and drawer fronts in 2 pac with new handles & a reconstituted stone top.

Auctions just not accepted in Qld

Interesting PRD Nationwide survey result recently published ties in with earlier surveys re the very limited acceptance in Qld. of listing without a price, whether that be POA or the auction process. In Qld, only 25% of sales are conducted via auction.(Sunday Mail survey September 2011 found in Newsroom on my website) Current auctions in the Coolum area are returning very low & in some cases record low prices for those that do sell, perhaps illustrating that only the savvy bargain hunters attend and unsuspecting sellers come to believe prices on offer are the full extent of the wider market. Clearance rates, ie both before and at auction, for houses in the last 12 months Coolum area is 17.8%, for the Sunshine Coast 22.6% (as per domain.com.au advice) My earlier blog explores this proposition of under-selling, which when coupled with a growing number of distressed sales, forces buyer expectations down and prices lower. Perhaps the most serious impact of this is that valuers, who are under enormous pressure from banks to get values right, are hitting low, taking the low end examples as indicative of a wider market value. These times call for the experienced real estate agent with strong marketing and negotiation skills to bring sense to the sale process and produce a win-win for buyers and sellers. STOP PRESS - recent media articles available on my website at www.geoffgrover.com.au "Recent home buyers to find equity magic has vanished" Domain 26th May - the recent history of high price housing growths leading to bumper rises in equity are over for at least 10 years as buyers purchasing in the last 4 or 5 years have found "Properties with no asking price deter buyers" Real Estate Business May 2012 - properties marketed without a fixed price (read auctions) are negatively affecting the pool of buyers according to a poll by PRD Nationwide with responses mainly from Qld & NSW.

Renovation explosion

The trend to renovate has accelerated greatly in the last decade, the value now accounting for 40% of national residential investment. Government taxes & costs of moving are forcing this trend by adding on 6% to the value of a property, whilst gov`t taxes & charges add on up to 40% to the cost of a new build. Kitchens & bathrooms make the biggest impact on buyers. The HIA found the average cost last year to renovate a kitchen was $20,000, a bathroom about $15,000. Matusik`s rule of thumb to avoid over-capitalising is to cap spending at about 5% of the property`s value for kitchens, 2% for each bathroom, & 3% for landscaping. If renovating primarily to sell,consider who is the most likely buyer Knowing your target market will help to direct the renovation focus to areas that will appeal to potential buyers. For instance, swimming pools have limited appeal to some because of the maintenance factor. A property aimed at investors for rental return would benefit from bedrooms with their own bathrooms separated by a central living space. Spend only to ensure an achievable sale price comparable to your area. Do your homework, call in your local real estate expert for advice. Over-capitalising occurs when a property has been improved beyond its real estate value. Michael Matusik, highly respected property analyst, advises that ideally the value of the dwelling should be between 1.5 & two times the value of the land on which it sits

Recent home buyers to find equity magic has vanished

THE sluggish housing market has sparked predictions that the latest generation of home owners will be unable to rely on their home as a key source of higher wealth, as many baby boomers did. Instead, analysts say people who joined the housing market in the last few years are unlikely to experience the ''magic money machine'' effect of bumper rises in the equity in their homes. In the late 1990s and early 2000s, house prices more than doubled, a trend that benefited even highly indebted owners. Rising equity - the proportion of the house's value belonging to the owner, rather than the bank - was credited with boosting consumer confidence and spending. However, analysts say the trend is unlikely to return, with Sydney house prices down 2.6 per cent in the past year and the Organisation for Economic Co-operation and Development this week warning of further risks nationally. The head of research at RP Data, Tim Lawless, said home owners who bought in the last four years would find it much harder to build up equity. December figures from RP Data show 6.4 per cent of home owners had seen the value of their home fall to less than they paid for it. This proportion is likely to increase after recent price falls. ''Realistically, anybody looking to build up wealth and equity in their property needs to have a long-term view. They're not going to be accumulating equity in their property in the current conditions, or over the next couple of years, very quickly,'' Mr Lawless said. A consultant, Martin North, said his surveys of consumers had found those who bought in the last four years - about a third of home owners - had received little or no capital growth. ''Property was a magic money machine for the last 20 years,'' Mr North said. ''You basically went on at the start with a high mortgage, paid it down, maybe traded up a couple of times, and you ended up with a very significant pool of equity. ''I don't think we're going to see that over the next five to 10 years … which means there is a generation now who won't get the sort of returns from their properties that they were expecting to get.'' Home owners aged between 25 and 34 have the highest proportion of debt to assets, at 63 per cent, statistics from the Reserve Bank show. However, households are also paying down their mortgages at the fastest pace in years, and most borrowers are making more than the minimum monthly repayment. This conservatism comes amid predictions house prices are likely to remain subdued. The OECD this week said the high dollar was ''generating substantial uncertainties that could weigh on employment, confidence and growth, with potential negative spillovers on house prices''. Christopher Joye, an executive director of Yellow Brick Road Funds Management, predicted that over the next 10 years, house price growth would be about half what it had been in recent decades. ''For the last 20 years or so house prices grew by nearly 8 per cent a year, however over the last four years they've only grown by 2 per cent per annum,'' Mr Joye said. ''Over the next 10 years we only expect house prices to track household incomes and we project that disposable household income should grow by about 4 to 5 per cent per annum.''

The underselling syndrome

A tough market demands the need for an agent with superior marketing & negotiating skills to get the best price Unfortunately, the quick route is often selected, agents simply taking to auction, attracting bargain hunters & low buy prices, not realistic market interest, or persuading sellers (often absentee landlords) to list at give-away prices that sell quickly. Sales results are reflecting this—we are seeing record low prices due to these strategies & prices continue to be driven down. I can quote numerous instances of sales that are destroying values. For instance, a villa in a quality & modern townhouse complex in Mt. Coolum recently sold for $340,000, the previous resale low was $365,000. I recently sold several for over $400,000. In my frequent discussions with valuers, they are shaking their heads at the precedents these strategies are delivering & substantially impacting on bank lending behaviour. Beware the underselling syndrome biggest & best & certain selling strategies are not necessarily the way to go—investigate all options. The best option may not be a quick sale, but a sale at your best price – this is obtained by local area experts with extensive buyer reach & strong negotiating skills. Recently I had 5 opens at Mt Coolum attracting a range of buyers & sold two properties on a win-win basis for both buyer & seller The best option may not be a quick sale, but a sale at your best price – this is obtained by local area experts with extensive buyer reach & strong negotiating skills. Recently I had 5 opens at Mt Coolum attracting a range of buyers & sold two properties on a win-win basis for both buyer & seller

Flood impact on Sunshine Coast real estate

Prior to the floods, the overwhelming reports of analysts was for more of the same in 2011, a buyers market, plenty of stock for sale, no price growth, more a leakage downwards.
An ANZ report this month is the latest in a long line to confirm same (articles available via download from my website)
The coast was fortunate to escape the physical damage suffered elsewhere, the real damage being economic, such as devastating the Christmas tourist season.
Matusik is of the belief that ultimately we can look forward to some positive results with an economic boom for years to come, 2011 being a year of two halves.
He sees tourism bouncing right back, once mines are pumped dry we see a continuation of strong coal prices, moisture in the ground assists the next cycle of crops, and the infra-structure spending during the recovery creates strong stimulus.
The coast itself has solid infra-structure capital commitments in place, such as the $1.6b airport upgrade. The next 6 months will be tough, but economically will be much better as we head into spring.
ANZ Report
Home prices are expected to remain flat this year amid signs the slowdown in price gains could become entrenched, says the ANZ Bank.
It estimates house prices will plateau this year, as contending forces of rising interest rates and a strong demand for employees work themselves out in the market.
"Further price weakness is expected over 2011 as the prospect of additional rate rises weigh on both affordability and investor sentiment," said an ANZ senior real estate economist, Ange Montalti.