API Blog :: Have your say!

Statistics are beginning to show an increase in the number of property investors taking advantage of what has widely been spruiked as a buyers’ market.

BY CATHERINE CASHMORE

Not only is this evident in the increased numbers of buyers lining up outside ‘open for inspections’ and attending auctions, Australian Finance Group (the country’s largest mortgage brokering group) reported their mortgage sales hitting an 18-month high in August – that’s some $2.7 billion, with 38 per cent going directly to property investors.

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A lot of emphasis is put on clearance rates each week, particularly in Melbourne and Sydney – the two main capitals for auction sales – however few people really understand what the clearance rate represents.

BY CATHERINE CASHMORE

The broad assumption is that ‘sold at auction’ equates to sold ‘under the hammer’ and a high clearance rate means the market is ‘flying’, while low clearance rates depict the opposite. However it’s not quite so simple.

The clearance figure released on a Saturday afternoon factors in every property that has sold under the hammer, as well as those sold via post-auction negotiation. And in our experience, more homes sell via negotiation.

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It seems we’re in for a ‘spring of discontent’. The release of the long-awaited carbon tax details were intended to produce an element of certainty. It’s been spruiked as a simple effective plan ensuring pollution is reduced ‘at the lowest cost to the economy’ with a large spoon of sugar for us ‘ordinary folk’ designed to sweeten the pain and lessen any complaints.

BY CATHERINE CASHMORE

The question is simply one of trust. As any good sales rep understands, you don’t sell the product, you sell trust. And let’s be honest – with questions and retaliations flying from the right and left, we’re doing little more than swimming against a tide of economic uncertainty.

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You can analyse as much statistical data as you like, and in many cases twist it to argue any point you want to make, but ask the average homebuyer if they’re finding it any easier to purchase property and I doubt the answer would be an out and out yes.

BY CATHERINE CASHMORE

?Bear in mind a homebuyer is not like an investor. An investor can pick and choose the areas they search in. They don’t have to warm to the ‘feel’ of a home. They can be walking distance from any café, not their favoured one. They can purchase close to any good school, not the one their children attend. Investors don’t need to buy until a good opportunity presents itself and for this reason they can step in and out of the market at will while targeting those ‘need to sell vendors’. In such cases, there are often multiple properties that tick the right boxes and we’re currently in a perfect market atmosphere to take advantage of them.

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Are we starting to see more distressed vendors than may have been reported?

BY CATHERINE CASHMORE

Australia wide, the delinquency rate has climbed from around 1.4 per cent to 1.79 per cent. It may be low in comparison to Europe and America, but it’s a figure the Reserve Bank of Australia should be paying close attention to because it seems there are other distressed vendors flying under the radar and trying to bail out before they get to the delinquency stage.

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We’re currently in an opportunistic phase of a typical property market cycle and although I don’t expect it to last perpetually, it presents a wonderful window of possibility for homebuyers.

BY CATHERINE CASHMORE

Quality of stock is not in abundance, however there’s enough on the market to reduce the intensity of competition around each individual listing, therefore providing an ideal playing field for strong negotiation.

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The stream of extreme bullish and bearish views regarding the real estate market tirelessly adopts the guise of a political contest.

BY CATHERINE CASHMORE

Those of us working in the industry are constantly accused of talking up the market for our own greedy ends. On the other end of the spectrum are the ‘bubble’ doomsday pundits, who are so determined to see our market take on the form of an American style crash and shoot down the drain, they hang onto any bit of negative data they can lay their hands on. However the real truth is neither bearish nor bullish, but in many respects overwhelmingly predictable.

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It’s very hard to go a week without numerous reports hitting the headlines suggesting we’re heading for a market crash. Despite plain facts being stressed concerning our population surge and shortage of ‘useable’ housing, a minority always seem to find a public platform to beat the drum of impending disaster.

BY CATHERINE CASHMORE

It seems pointless to reiterate the arguments for and against; they’ve been repeated many times from all corners of the spectrum and – like politics – sides have already been staked out.

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The recent call for a first homebuyer strike from the tax reform group called Prosper Australia has received a fair amount of publicity. It’s one of those irresistible headline-grabbing stories the media loves – a little like Dick Smith’s two children per family policy.

BY CATHERINE CASHMORE

The proposal calls for first homebuyers to go on strike and refuse to purchase into a market that’s typically rising between seven per cent and 10 per cent a year. I can fully sympathise with the emotions behind this campaign. Single first homebuyers fighting to save a deposit while they’re caught on the rental roundabout are essentially priced out of the market unless they lower their expectations, or opt to purchase in the outskirts of the city.

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Buyers often want a solitary answer to the ‘golden egg’ of investment. Some experts recommend apartments, while others swear by land.

BY CATHERINE CASHMORE

However there’s no ‘one size fits all’ scenario in the world of real estate. Plans must be formulated for each individual based on long-term objectives. If you’re thinking of investment you probably fit into one of the three following camps:

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