Thinking of Selling Property

THINKING OF SELLING PROPERTY? by Geoff Grover, Mount Coolum and Coolum Beach realestate expert July 2015 “The tide of digital change remakes business models” is the heading of a recent article in the Australian and we have seen this very publicly with major retail outlets and online selling– what is not so visible is the changing face of real estate. We are now seeing a change by consumers in preference from the real estate company`s corner store brand to the personal brand, ie, knowing about the actual agent they will be working with – surveys show that consumers appear to be brand agnostic as it relates to real estate companies due to technology and the internet. A recent study showed what is most important when someone picks an agent to work with. Over 50% of the respondents said they look for an agent who is honest, trustworthy, has a good reputation and is a local area expert Only 3% said they care about the brand the agent is associated with.

Consequential to this trend is the amazing growth of online agencies and personal agent branding as the new business model. Equipped with a back office operation including a creative marketing section and subscribing to all industry major portals, this underpins experienced agents marketing efforts delivering strong results to their clients as: * they are freed from the shackles of office rules as to how they must operate. They can shape strategies and marketing to suit the property and the vendor, not be constrained to, for instance, insisting auctions, expensive For Sale signs, charging for internet listings and expensive press advertising regardless of the target demographic. * @realty have under the one banner over 100 agents nationally based working with Geoff to the benefit of his client, not a small boutique agency or a series of individual franchised agencies working as separate silos – Buyer Reach is maximised. Food for thought for all property owners looking at putting their property on the market. To identify local area property experts, websites such as www.ratemyagent.com.au have surfaced - check out Mount Coolum to see how Geoff rates.

Geoff Grover – Licensed Real Estate Agent

Lies, damned lies and statistics

Lies, damned lies and statistics by Geoff Grover, Coolum Beach and Mount Coolum real estate expert - July 2015 The full quote popularised by Mark Twain is “There are three kinds of lies—lies, damned lies and statistics” There is a lot of truth in this old saying as numbers can be manipulated to suit any argument. Property prices are a classic. We get breathless announcements as to how the market moved so much last week and extrapolating this to make a major pronouncement on trends. In truth, trends can only be identified by a long term view. You will always have short term movements up and down in everything that is measured, just ask any trader of the stock market! Let us look at house sales by year from 2010 to 2015 YTD. We have had an increase from 2012 of 23.2%, but from 2010 only 7.7%, ie, 1.54% average per year, which is less than inflation! This is solid, but no price boom. What is very relevant is the numbers sold, increasing each year. The property cycle used by the serious commentators predicts that price growth always follows volume growth, a simple outcome of supply versus demand. Increase from 2012 is 10.2%, from 2011 nothing, from 2010 0.86%.per annum. Year to year figures are affected bysegmentation, ie more high end sales than last year, so the long term view & like for like analysis is essential.

The Art of Price Positioning

How do you price a property for sale to achieve the best result, or do you not market at a price? The no price proponents, eg by auction, say it is best to let the market decide by getting buyers feedback In certain areas of Australia, notably Melbourne and Sydney, auctioning is the dominant form of marketing, not so accepted elsewhere. The press promote auctions aggressively because it is a press dominant process, relying much more on heavy, widespread newspaper advertising $`s in a short time frame rather than the balance of appropriate press and internet exposure designed for the property, ie strategic management which may be local press only. Qld, for instance, despite the apparent dominance in the press of auctioning due to the major agencies championing it, has far more properties sold by private treaty rather than at auction. In areas where there is a lack of wide auction acceptance, market feedback on likely sell prices can be skewed by savvy bargain hunters who give rock bottom price feedback to agents. The “Make an offer” or similar & “Offers over $x” listings are invariably the result of a vendor not liking the probable sale range price advised by the agent on appraising. These approaches are often suggested by agents on the premise they will attract much higher prices than the appraisal, all to win the listing. This is usually wrong on all counts. *Many buyers will simply not enquire as they fear they will be wasting their time, or * Buyers will sense a bargain with this sort of language and hit a low price. Very rarely do offers over list price marketing result in much more than at best ,a small price above the list price, usually lower. Then we have the very high list prices, on the assumption you can always come down, but you can`t go up. Totally unrealistic. The problem here is that buyers know that & do not come, you have nobody to negotiate. The upshot: * an effective auction is significantly more expensive than private treaty with heavy dominance on mass press advertising. *Selling on a no price basis, eg “Make an offer” limits the opportunity to sell at the right price with fewer buyers inspecting ,with bargain price offers a likely outcome * High list prices attract very few buyers The lesson to be learnt is to work with the experienced & highly knowledgeable local area expert to market at the proven price range using their marketing expertise & contact with local buyers if sellers wish to sell in a realistic time frame & at maximum market value. Many don`t - the average house sale result for P/C 4573 for the 12 months to July 2013 is on the market for 168 days with discount off original list price of 9.4% !!! Surely this tells a tale!! Geoff Grover - Property Talk - November 2013

Confidence & the housing market

There is a lot of speculation about the housing market in the daily press at the moment, with a lot of talk re “price bubbles’ and the market taking off. For a more detailed review, attention needs to paid to leading key performance indicators (KPI`s) rather than current or last week`s auction clearance rates to allow a realistic assessment of trends. One of these is measures of consumer confidence, where we have a database over an extended time frame that enables comparisons with earlier periods where the outcomes are known. Michael Matusik in his Matusik Missive dated October 15th 2013 discusses the Westpac Melbourne Institute Consumer Confidence Index and reports as follows: Confidence The theory was that confidence would lift after the federal election, but the Westpac Melbourne Institute Consumer Confidence Index actually fell by about 2 per cent during October. The index now sits at 108.3 – which actually means little to most of us – but if I put it another way, 100 means that half the community are optimistic & half are pessimistic. So, a 108.3 reading means that slightly more see the glass half full rather than half empty. But not a lot more of us are seeing the sunny side of the street. Another surprise was the fall in the ‘whether now is a good time to buy a dwelling index’. This score fell 10 per cent from 140 index points to 135, with the biggest falls in NSW (down 23 per cent) & Queensland (down 11 per cent). There were similar falls in April this year, following media speculation about interest rates moving upwards. October’s decline comes on the back of talk about a housing bubble; declining affordability & pending market correction. But as we pointed out both here & here – in our opinion at least – no such bubble conditions (yet) exist. If we are not careful, we will talk ourselves out of a good thing. The Westpac Melbourne Institute Good Time to Buy a Dwelling Index is a near prefect bellwether as to the future direction of the housing market. If this current slide in confidence continues, expect the recent gains made in housing prices & sales to plateau & maybe even fall in about six months’ time. Acknowledgement – extract from the Matusik Missive, October 15th, 2013

Massive plans horrify residents - Coolum Domain October 11th 2013

Residents and community groups are preparing for a battle over plans for a major development at Yaroomba that involves taking building heights to a maximum of 12 storeys. This is something that Coolum Beach real estate interested parties have long fought against. Check the Newsroom and Blog tab at http://www.geoffgrover.com.au

Is the price right?

We are obviously through the worst of the housing price downturn and in general the number of properties nationally for sale are at very low levels , leading the major press to be filled with reports of a house price bubble, significant price growth, etc. These comments focus on capital city movement in the main, and bear limited relevance to regional centres. The astronomical price growth in capital cities was mainly led by the “gentrification” of inner city areas as the urban landscape changed. Poor working class suburbs became much sought after. Re article on this on my website. So direct comparison with capital city price movements is somewhat tenuous as regional property prices are subject to different factors. What is a major factor in our area is the price segmentation that has led to a disproportionate number of upmarket properties being listed in the belief “the price is right”, the market has changed, everything is selling A detailed analysis of Mt. Coolum & Yaroomba reveals that in 2012 and 2013 YTD, 66% of all house sales were under $500,000 Yet houses for sale today in these suburbs at these prices are at 19% & 15% as reflected in the table - by far the bulk are the expensive properties with much fewer interested buyers. House Sales - Jan to July 2013 Under $500k Over $500k No. % No. % Mt Coolum 25 68% 12 27% Yaroomba 12 67% 6 33% Housing stock for sale as listed on realestate.com.au shows as at 24th September Houses for sale Under $500k Over $500k No. % No. % Mt Coolum 5 19% 22 81% Yaroomba 2 15% 14 87% In reality we still have a wide choice for the upmarket properties, strong competition but a desperate shortage of the popular price points. Negotiation strategies for both groups then become quite different. The under $500,000 sellers & buyers need an agent who understands local area values, establishes prices accordingly & negotiates firmly around this - agent skill sets become the predominant factor as this leads to a win-win scenario for all, the seller achieves the price, buyer does not miss out.

Gentrification

We are obviously through the worst of the housing price downturn and in general the number of properties nationally for sale are at very low levels , leading the major press to be filled with reports of a house price bubble, significant price growth, etc. These comments focus on capital city movement in the main, and bear limited relevance to regional centres. The astronomical price growth in capital cities was mainly led by the “gentrification” of inner city areas as the urban landscape changed. Poor working class suburbs became much sought after. Re article on this on my website. So direct comparison with capital city price movements is somewhat tenuous as regional property prices are subject to different factors. GENTRIFICATION as appearing in the Matusik Missive – September 18th 2013 By Dr. Alan Davies Transport and Urban Development Consultant Gentrification is one of the most significant changes to occur in Australian cities over the last 50 years. It wasn’t caused by deliberate urban policy though but resulted from a complex set of deeper forces Previously, I argued that urban policy-makers didn’t single-handedly create Melbourne’s much envied laneway culture (How did Melbourne’s ‘laneway culture’ come about?). Their contribution was important but it was primarily about facilitating and attenuating underlying economic and social forces. There’s a more general point here. Most of the big changes in cities aren’t shaped by planners but by structural pressures and trends. Much of the challenge facing urban policy-makers is to understand these pressures and guide and attenuate how they work geographically. Consider the gentrification of the inner city that started in earnest from around the 1970s in Australia and led directly to today’s stratospheric property prices. It’s instructive to think about what caused gentrification because it shows the idea that we can confidently plan urban futures over long time periods is largely a conceit. (Fn 1) Could anyone in the 1950s or 1960s have confidently predicted the extent of gentrification of the inner areas of Australian cities? It’s hard enough to identify some of the key forces that produced the inner city revival, but the idea that policy-makers knew where it would go – or deliberately planned today’s outcome – seems very unlikely. In the 1950s the inner suburbs of Melbourne and Sydney (defined as 5 km radius from the CBD) were relatively dense mixed-use working class suburbs with terraces, pubs and factories. Housing was relatively cheap and attracted migrants who in turn generated demand for “exotic” services like cafes. Around this time the departure of manufacturing for the suburbs began in earnest. It was driven by a number of factors, including new ‘horizontal production’ methods, reductions in the cost of truck transport and increasing traffic congestion in the inner city. With cheaper cars, construction of better roads and new areas opened up for housing, much of the inner city blue collar workforce followed manufacturing to the suburbs. So did the many migrants who aspired to live in larger detached houses. The exodus of industry was crucial for gentrification – it made the inner city a much more pleasant place to live. The rapid expansion in higher education in the 60s and 70s introduced many staff and students to the lifestyle possibilities of the inner city. Rents and house prices were competitive with the suburbs, at least in the early decades of gentrification. Later, declining household size – itself the product of upstream changes in factors such as fertility – meant small inner city dwellings provided more space per person, especially for the expanding cohort of professionals who worked in the CBD. They married later, had fewer children and hence required less space. Most terraces could in any event be renovated to function better and even extended to some degree. Gentrifiers were initially drawn to the inner city by the diversity of jobs it offered and later by the CBD’s increasing specialisation in high-paying Government, corporate and producer services jobs. This shift in employment geography was a consequence of higher level economic changes brought on by the transition from a goods to a services and knowledge-based economy. Increasing female workforce participation helped to make the then-fringe suburbs, which were progressively becoming more distant from the centre, less attractive to this group and conversely made the accessible inner city, which also had the highest density of public transport routes, correspondingly more attractive. The high residential density of the centre also complemented the lifestyle of these smaller, richer and better educated households. Old buildings that formerly supported industry and a much larger population provided venues for restaurants and other lifestyle services. These are some of the forces that came into play at different times but worked synergistically to produce gentrification. While it might seem easy to understand the broad outline of these changes in retrospect, it is hard even with the benefit of hindsight to unpick exactly how the events unfolded, what relative contribution each factor made, or how it might have worked out if some of these factors had been different or even absent. It is harder still to sort out cause and effect at the geographic level of individual suburbs. Perhaps a small difference in one factor could have produced a wildly different outcome. Those difficulties however are trifling compared to how hard it is to identify all the relevant factors – with appropriate weightings and timings – that will shape Australian cities over the next 50 years and predict how they will combine and what outcome they will produce. As I’ve observed before (Can outer suburbs be more adaptable for future generations?), the idea that we can go one better and deliberately create or plan some idealised future based on today’s values is ambitious to say the least. Of course some decisions have to be made today in the expectation their effects will be long-lived, e.g. transport infrastructure, but we should nevertheless focus on maximising the ability of our cities to adapt to new and unforeseen circumstances. We should mostly shy away from the small stuff – including physical design – and focus on the big picture stuff like having flexible and efficient institutions and processes. We should focus on removing impediments and frictions to adaptability, such as hefty stamp duty on property transactions. Prices should reflect real costs rather than implicit subsidies. The cost of negative externalities should be internalised e.g. by road pricing. Our institutions should be open and accountable. We should be aiming to have an urban system that can absorb and adapt to change. But we should be wary about privileging today’s technical understandings and political views; because there’s a good chance they’ll be wrong. This article first appeared in The Urbanist, and is reprinted with the kind permission of Dr. Alan Davies, who is a principal of Melbourne-based economic and planning consultancy, Pollard Davies Consultants …..

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