The property tide is turning

Sunshine Coast Property Talk - September 2013 Property commentary in general is very shallow, ranging from international analysts telling is we have a “price bubble’ about to burst, to locals believing in “silver bullets’ such as the arrival of Spring, another interest rate drop or an election bringing immediate growth. It is none of these, rather over time key indicators moving in the right direction. Respected local analysts such as Messrs Matusik and Yardney suggest these include: * Declining interest rates - it is the level, not one cut that is the key. We are at all time lows. * Tight rental vacancy rates - a strong trend * Job growth - Qld has created 26,000 new jobs in 12 mths, big coast projects underway. *Lower Aussie $ - significantly lower over time * Declining stock listed for sale; less private treaty discounting & shorter time on market plus increasing sales volumes. * Rising confidence levels - financial institutions measure this with regular surveys, one reporting property buy sentiment is close to its pre-GFC high. This leads to the obvious conclusion we have nationally turned the corner. But how does the Sunshine Coast stack up against the specific property indicators? The answer is, very well *Rental vacancies The REIQ advises that 3% is considered the equilibrium point of supply & demand, and the rate on the coast is currently 2% *Stock for sale well down everywhere. Regular readers will know I maintain statistics for a territory of 2,000+ houses, the 10 year average is approx 3.5% of houses usually on the market. Last year it got to 5.7%, now down to well under 2%, a significant shortage. * Sales Volumes The Sunshine Coast saw a volume increase of 18% in house sales Jan -June 2013 compared to Jan-June 2012. *Price discounting & Time on Market Domain.com.au report for Post code 4573 Good improvement, but these are still significant & indicative that there is still a disconnect between various expectations, but with the low level of stock, the buyers are there & properties will sell if sellers listen to the market. The lower end has really taken off Median averages remain similar, price growth has not yet occurred, just volume movement. Note - Geoff averages sales with only 5.3% off list price, much better return for the seller House sales 12 months to Sep 2012 June 2013 Discount off list price 13.2% 9.8% Days on market 228 174

Disconnect between Buyers and Sellers

Sunshine Coast Property Talk – Geoff Grover - August 2013 www.geoffgrover.com.au geoff@coolumbeachrealty.com.au Right at this time it appears that buyers & sellers are not on the same page, they both have very different expectations. We are seeing a lot of listings coming on for, shall we say, very hopeful prices, and buyers on the other hand are still thinking it is “disaster city’ with their offers. The reality is the market in general is, or should be, balanced, as we have historically very low levels of stock available, particularly those at the most affordable prices. What are these price zones? Coolum Beach House Sales - July YTD Price Range Number Sales % 0-$400k 25 39.0 $400 - $450k 17 26.6 = 65.6 $450 - $500k 7 10.9 = 76.2 $500-$600k 9 14.1 $600-$700k 3 4.7 $700k+ 3 4.7 Total 64 100 The disconnect is occurring as a large proportion of vendors are trying to push up prices & list in a higher bracket where they do not belong. Why - due to a misguided idea as to their value, and also agents talking up prices unrealistically to win listings as so few are coming on & they run out of stock. The proof of this comes with domain. com.au showing sell prices for P/Code 4573 on average 10% discounted off original list price for houses for the 12 months to April 2013 & 12.6% for units. Realestate.com.au has Coolum Beach with 91 listings, only 25% under $450k, yet the actual proportion of sales is 65.6% as list prices get pushed way down to sell. Both sellers & buyers need to be very aware of recent, for like property sales when assessing what are realistic prices to list at or to make an offer. Your local real estate expert will know this & provide the sales proof plus history of his/her record in the area

The Coolum Property Cycle

The turn of the century saw a dramatic change in Coolum house prices - up until then, rises in the low range of inflation were the norm, suddenly they dramatically rose to create the notion that house buying was  a  sure fire major wealth creator rather than a roof over ones head..
Sadly for many, a major correction  commenced in 2009, so a purchase in 2008/9 will really struggle to return close to the buy price today.
To get some idea of these cycles on an over all basis, a median price average analysis is useful, although a price on a particular property requires a detailed like for like analysis.

Coolum Median Property Prices 

The turn of the century saw a dramatic change in Coolum house prices - up until then, rises in the low range of inflation were the norm, suddenly they dramatically rose to create the notion that house buying was  a  sure fire major wealth creator rather than a roof over ones head..
Sadly for many, a major correction  commenced in 2009, so a purchase in 2008/9 will really struggle to return close to the buy price today.
To get some idea of these cycles on an over all basis, a median price average analysis is useful, although a price on a particular property requires a detailed like for like analysis.

Coolum Beach House price

The turn of the century saw a dramatic change in Coolum house prices - up until then, rises in the low range of inflation were the norm, suddenly they dramatically rose to create the notion that house buying was  a  sure fire major wealth creator rather than a roof over ones head..
Sadly for many, a major correction  commenced in 2009, so a purchase in 2008/9 will really struggle to return close to the buy price today.
To get some idea of these cycles on an over all basis, a median price average analysis is useful, although a price on a particular property requires a detailed like for like analysis.

Coolum Beach House price

 

Property investment is best served by the old adage of ‘it is time in the market that counts, not timing the market”.

You can`t always profit on a property sale, it depends on the property cycle.

Those caught out buying at the peak  need to recognise that the reality is when  you buy and sell in the one market, it is the relativity that counts, not quantum prices - you lose on your sale, pick it up on the purchase.

Interestingly, the long term trend from 1993 to today is the equivalent of  6.5% compound growth every year.

These numbers are only useful as  generalisations for long term trend   analysis, and only where the type of  properties sold remains constant. For  instance, Mount Coolum figures would be heavily distorted with the recent  upmarket Boardwalk development.

Geoff Grover

Mount Coolum Real Estate

Preparing your home for sale

 With the housing market now in Recovery stage,  many  people who have put off  that move are now re-considering. - we are off the price bottom.
It is critical for them to understand that the way you live in a home and the way you sell a home are two very different things?
To get the top dollar for your property, you must:
* get control of personal emotions re the house
* look at your home the way buyers would & make it appealing in those areas..
Potential buyers are much more likely to return to a home that impresses them at first glance, while homes that appear disorderly or poorly maintained struggle to obtain true value.

Six key issues that turn buyers off
1. Home odours
homeowners become desensitized to odours in their home which are obvious to visitors,         particularly true of pet owners & smokers.

2. Carpet & flooring
If your carpet is worn and dirty, get it replaced or cleaned. Vinyl flooring coming loose needs to be glued down. High quality flooring to small areas can make a difference.
3. Paint & walls
One of the easiest ways to “spruce up" -   consider tired areas such as outside trim.
4. Clutter –

a big buyer turn-off. Pack away excess nick-knacks, wall hangings, personal photos & get rid of stuff you are not taking.
5. Signs of pests.
Remove any signs of mice, cockroaches,    spider webs, etc..Inspect the exterior walls for   possible pest situations such as attaching growth. A formal pest inspection to present to buyers is worth considering in our termite friendly climate.
6. Landscaping

-a messy, overgrown or  cluttered garden needs fixing.
First impressions are critical, you have to get prospects through the front door

Geoff Grover

Mr. Mount Coolum Real Estate

June 2013

On the up, but cautiously!

Geoff Grover – Sunshine Coast Property Talk – June 2013




There is no doubt the housing market displays growing optimism, but media hype & reporting following the release of housing statistics & interest rate announcements can be over the top.

It is the long term that really determines housing trends, such as a moving annual average that smoothes out seasonal influences.

Based on this, what is the direction?
The REIQ report on statistics for the 12 months to March 2013 advises “ Queensland`s market was improving in a sustainable way, our property market continues to record healthier results with positive yearly figures”.

10 of the 12 major Qld regions posted a steady or better median price result over the year.

Michael Matusik confirms the Australian situation is improving, but expresses caution:

* even though interest rates are at 50 year lows, more cuts to balance out the gov`t fiscal consolidation are needed. There is general expectation these are on the way, sooner rather than later.

* housing starts need to rise as these create lots of new jobs and momentum, but we face a structural problem because of the very high taxes and charges on new property.

The HIA estimates these to be 36% of the purchase price of a new home in Brisbane & this issue is simply not being addressed.

*First home buyer numbers are down 30% nationally dollar volume, & in Qld & NSW dramatically down - the re-focusing of grants from second-hand property to a $15,000 grant for building a new property has been a dismal failure.

What about the Sunshine Coast?

Very well positioned. The key is employment growth with major infra-structure projects such as the Horton Park CBD development, the Sippy Downs Hospital complex & the huge airport upgrade, plus others.

This growing activity will create a very strong second home buyers market looking for established homes.

You can never rule out any demographic, but it is owner-occupiers who are leading the way & expected to continue doing so.

Investor numbers are slowly growing, but First Home Buyers will continue to lag way behind until the gov`t addresses the structural issues highlighted



Geoff Grover
Coolum Beach Realty
Mobile 0414 337 402
geoff@coolumbeachrealty.com.au
www.geoffgrover.com.au

Why are investors back?

                                                  Geoff Grover Property Talk – May 2013


They are returning, but the flood gates are not open. The initial interest is because rental yields are on the rise, it is very hard to find a rental property today, and confidence is returning that we are past the bottom in prices, so capital growth, albeit modest, is now seen on the horizon.

Both factors are important to investors- rental yield provides the cash flow to support the investment, capital growth is the real reason to invest long term.

The REIQ December Qtr Gross Rental Yield report shows more than 150 suburbs are on average achieving 5%, and anything less will not attract investors - this does not include purchase , management or maintenance costs, just rental income before deductions.

Qld`s 5 Best Performing Post Codes
Postcode Median Sale Rent Gross Yield

4415 $360,000 $640 9.3%

4184 $130,938 $228 9.0%

4714 $119,500 $201 8.7%

4455 $320,000 $496 8.1%

4825 $371,600 $575 8.0%

What is immediately apparent is that the high rates are mainly unique mining areas or very high rental areas like Woodridge that have variable price growth prospects, and that to get those yields, the buy prices are very low, all well under $400,000.

What does this mean for Coolum?

The most attractive rental propositions will be those between $400- $500,000 bigger type, well presented houses returning around $430 to $480 per week, yields over 5% but under 6% preferably unique growth features as near the beach, offer views or have a high Walk Score.

Reasons? $500+ per week rental is hard to get, renters are better off buying, & whilst an investment buy of $600,000 invariably means a better home with higher depreciation to offset against your tax liability, the cash gap between mortgage payments & rental income widens.

Potential sellers should be aware how astute agents can maximize sell potential by informed marketing & buyer negotiation.- new investors need this assistance.

www.geoffgrover.com.au

Mobile - 0414 337 402

E mail – geoff@mountcoolumrealty.com.au

Distressed sales mainly in Qld - but NOT on the Sunshine Coast

New figures show property in a dismal state

Sonja Koremans – Courier Mail – 18^TH April 2013

ALMOST a quarter of all properties advertised in Australia in the First Qtr to March 2013 are distressed sales, according to alarming new figures.

Editors Note – but not on the Sunshine CoastMount Coolum sales in 2012 were well up, very much auction driven,  prices well down, and obviously a function of distressed sales. For the First Qtr, dramatically reduced stocks available for sale has changed the picture.

Right now, buyers are not putting their properties on the market until they see prices driven up – virtually all the distressed sales have been cleared out. Particularly for the lower price points, we almost have a sellers market such is the shortage of stock.

And in stark contrast to reports that Queensland’s real estate sector is back on its feet, the state accounts for the majority of those listings. New figures released by valuation group LandMark White reveal that the sunshine state accounted for a massive 54 per cent of properties advertised by a mortgagee, receiver or liquidator during the March quarter.

The Gold Coast recorded the highest number of distressed property advertisements in the country with 74 per of its listings made by a mortgagee, receiver or liquidator in the three months to March 31.They included big-ticket items such as the Marina Mirage marina and Hope Harbour marina.

Nationally, most receiver sales were in regional areas, with the highest number of distressed listings during the quarter in the agricultural sector. Residential property was next highest. LandMark White found that almost 23 per cent of properties advertised in Australia during the quarter were listed by a mortgagee, receiver or liquidator.Of those, nine per cent were in New South Wales and 15 per cent in Victoria.

Stewart Gilchrist of Colliers' insolvency property services said high-end homes accounted for the majority of distressed sales on the Gold Coast.
“There is still an oversupply of residential in excess of $1 million so those distressed sales would be at the upper end of the market," Mr Gilchrist said.
He said the Glitter Strip’s industrial sector was solid while the commercial market was softer on the back of an oversupply of office space.
“The Gold Coast is development orientated so that could also account for the higher proportion of distressed sales in the region."
He said despite the gloomy figures, confidence had returned to the Gold Coast market.
“Vendors and banks are being more realistic about prices, buyers are back and sales are strong,” he said.

Nationally, the rural sector accounted for 23 per cent of distressed sales, 19 per cent were residential, 16 per cent industrial and 15 per cent retail.
The majority of receivers’ stocks advertised for sale were in regional rather than metropolitan areas - 80 per cent were located outside capital cities.

For the fourth time in six quarters, Queensland accounted for the greatest number of distressed properties for sale nationally.

NSW saw the most positive change, as only seven per cent of all properties advertised in that state were listed by a receiver or mortgagee - a record low. By comparison, the proportion in the same quarter of 2012 was 31 per cent.

Although the distressed ratio in Queensland dropped by 6 per cent, it remains stubbornly high at 39 per cent of all property advertisements in the state. Victoria saw the smallest improvement in the distressed ratio, with a drop from 20 per cent to 19 per cent, which meant that for the first time in the series, Victoria had a higher ratio than NSW.

The Sunshine Coast Recovery Cycle

In recent times analysts have come to re-define the property cycle into 4 phases: boom, bust, recovery, stabilization.A recovery market is characterized by 5 key features according to leading analyst Michael Matusik - rising sales -  a return to price growth, albeit usually quite mild - improving rental yields - more building activity - a more equal market between buyers & sellers.
We showed last month that house sale      volumes had increased in the Mt.Coolum area, although prices were down. The table confirms that volumes for houses,  apartments and land were all up for the whole Sunshine Coast 2012 over 2011. 
Some of the recovery features are in place, sales up & low levels of stock moving to a balanced market, so we are clearly off the bottom, although not far from it.
Matusik believes that the Sunshine Coast is one of several Queensland regions that are now “knocking on the door to recovery”. These are very general assessments. that do not address segment differences.

   Volume Increases - Sunshine Coast

                                                         Source: RP Data

These are reflected in the amount of stock on the market. 

Housing stock is very tight.

The apartment market has high       numbers for sale as long term investors look to realise capital gains or losses from purchases made in earlier years as they recognise extensive periods ahead of slow growth in the property cycle.

The luxury apartment market is the last sector to recover & requires massive price adjustments to move stock as evidenced on the Gold Coast & locally, eg the Coolum Seaside 5 Star liquidation

Analysis by Geoff Grover, Mr Mount Coolum Real Estate

Coolum Beach Realty

Mobile 0414 337 402

www.geoffgrover.com.au

April 2013

Why do agents insist on not listing a property at a price?

Respected journalist and well know funny man Mike O`Connor in thie weeks edition (March 2-3 2013) of the Courier mal QWEEKEND lambasts the practice with a story of his own experience and asks the cogent question as to how many buyers walk away in fruestration because they ar enot prpeared to play the real estate game - talk about road rage, this is property range to the max!

The journey began, like so many of life's adventures, in bed. It was Saturday morning, the best time of the week, and I was stretched out with my head propped against the pillows. I'd been downstairs and returned with tea and toast and we were both reading the 'newspapers.

"That's nice," said my partner, an observation I acknowledged with a grunt meant to indicate: "Leave me alone. I'm reading".
"What do you think?" she persisted, so I looked up and saw a photograph of a house. "Very nice," I said and went back to reading."We should have a look," she said. I should have replied: "Never! Madness lies that way", but I was drugged by the bliss of the morning and surrendered too easily.
"Why?" I said, when we pulled-up at the address, "are we looking at a house which is for sale when we have no plans to move?"
"Just curious," she said. - - --
"I suppose there's no harm in looking," I said, words which, along with "Keep reversing. There's plenty of room"- and '1 didn't know you were pregnant", can presage disaster.
It was a very, pleasant house, closer to the city than where we are and with the requisite number of bedrooms. How much? Silly me. No-one puts a price on a house in Brisbane any more. It's like a television-quiz show. You have to guess how much is being asked-. Offer too little and you get the "I think you're looking in the wrong suburb" - look, too much and the agent will tie you to - a chair and run and fetch the owner.
When I've asked the price of properties, I've been told how much the one up the road sold for and how much they got for the one across the street, but never the price being asked for the one in which we are standing. It's a secret between the agent and the owner and is not to be shared with people who might be interested in buying. I presume this is because they know what it's worth but refuse to utter the figure in the hope that someone will come and offer them more.
I wonder how any potential buyers walk away in frustration because they are not prepared to play the great real estate guessing game? If you buy a car it has a price. If you book a hotel room, it has a price. If you buy a suit, you know how much is being asked, but not with houses.
It's irritating but we're on the treadmill now, it one moment of weakness - "it can't hurt to look - --being enough to trigger a low-level addiction to house inspections. You begin thinking that it might actually be-nice to move closer to the city and the new surrounds would somehow be life-changing. Once you've looked at one house, you have to - look at more.
Why? To compare. "But we're not moving," I insist. "But we should know what's around if we do decide to move," she replies.

The Twilight Zone - Sunshine Coast property market March 2013

There is no doubt the market is transitioning from a buyers market to a balanced market as property numbers on the market generally fall below traditional levels & interest rates fall, but many still play to the extremes, we are neither night nor day.
The latter days of 2011/early 2012 with property numbers on market ballooning due to financial pressures &  investor bailout  had the unfortunate result of some very low sale results registering.
Aggressive agency price advertising did & still does play a role in this, as a perusal of advertised copy will show - make an  offer, must sell, seller sacrifices, etc, is all the go. 
Professional agents promote property       features & benefits  to negotiate a realistic result, which is largely not happening today.

Price advertising  helped create a low bar level that buyers took as the norm, and many still do.
Conversely, many sellers are still being     unrealistic in expecting prices way above history, anticipating prices are about to soar .

No wonder many are confused!

This is the time both sellers and buyers need the services of a local expert highly  experienced in marketing & negotiation, to cut through to true value.

Statistics illustrate the recent journey of Mount Coolum house sales.

Note: median averages can be misleading

Source - domain.com.au and RPData

Number of sales are up, values are down, auction clearances  are up, you draw your own conclusions.
It is not the number of sales done, but the real value to the seller that counts.

My record stands as delivering top results to buyers and sellers over an extended period in Mt. Coolum & beyond with   marketing & negotiating skills.

        

 

Laminates ain`t just laminates no more!

 By Geoff Grover – www.geoffgrover.com.auFebruary 2013Another handy property tip from Mr. Mount Coolum Real Estate

High Pressure Laminate (HPL) is a popular choice for benchtops, formed around a thick substrate to make a laminate benchtop, which can deliver profiles from bullnose to more contemporary slab-like stone looks.

The look can be enhanced with a range of finishes from textured to high gloss, plus, a range of edging options offer the flexibility to create a colour matched square-edge without the black line at the join.

Printing technology now makes available a myriad of stylish and contemporary looks in a cost-effective way compared with other benchtop surfaces.
This includes solid colours, woodgrains,  modern abstracts & real stone patterns. Laminex recently released 180fx, which  replicates the striking colour variations,   intricate veining and sophisticated layers of real stone surfaces.

Another new product, Freestyle Curves, is a 100% thermoformable surface which has transforming capabilities & seamless edges
At a product launch it was displayed in a ribbon like format (pictured) to illustrate the flexibility it offers.

When planning that benchtop update, it definitely pays to shop around to check out  new technology.

 Information courtesy of The Laminex Group

  

Demographia International property survey thoroughly debunked~!

The paucity of responsible property journalism in Australia has again been revealed by the uncritical acceptance of the 2013 Annual Demographia  International Housing Affordability Survey

This survey covers 6 countries only, concluding that in comparison all major markets in Australia continue to be severely unaffordable, reflecting vastly over-priced housing relative to incomes. The least affordable smaller markets were Port Macquarie, Coff's Harbour & the Sunshine Coast.

There were no affordable or moderately unaffordable markets in Australia according to the survey.
 Three of Australia`s most experienced property analysts have debunked this conclusion,

How come? - the survey does not allow for:
* Relative size & quality of property - a 250sm house on 800sm block is not the same as a 2 bed 62sm Hong Kong apartment.

* No capital gains tax on your home in Aussie, so it is a big tax incentive & wise investment strategy to build wealth by improving your home.

* No allowance for equity, which in Aussie averages 60% for all owners, including investors

*Income levels are not consistently compared across the survey cities

* Regional areas like the Sunshine Coast support a high proportion of semi/fully retired households that earn less than those fully employed but own expensive properties.

These 3 experts
Michael Matusik
Louis Christopher - SQM Research
Terry Ryder,

All say we do not have overpriced stock EXCEPT for affordability versus status.
Just because a certain percentage of the population cannot afford to buy where they prefer, eg, inner city Sydney rather than the Western Suburbs, beachside, etc, does not mean housing in general is overpriced.

Impact on housing prices?

Put simply, we do not have a price bubble about to burst & plunge prices down further.

Now is an excellent time to buy, but sellers do need an experienced agent to market property features to obtain a win-win price & not fall prey to bargain hunters attracted by price advertising adopted by many agents which requires minimal marketing skills.

Full analyst reports on my website at
http://www.geoffgrover.com.au
under the Newsroom tab