I'd heard that the Gold and Sunshine Coast property markets weren't faring that well but I had no idea quite how bad things were till I travelled up to Noosa for a short break. Sure, the same properties that were for sale 3mths, 6mths and 12mths ago are still for sale today, but that's often the case on the coasts, where the more expensive stuff in particular, takes a while to shift.
For example, I went to view a property on Noosa Sound (in Key Court) in 2007 that eventually sold in mid-May 2009 with a 20% haircut on the original asking price. The period that straddled May 2009, if you recall, was actually fairly strong for property.
Easter is traditionally a huge period for property sales in this part of the world, and after a disappointing Christmas for the spruikers, Easter 2011 was going to put the year and the market back on track -- or so some of the big knobs were saying in the press ahead of their "Gala Auction" events. I haven't yet looked at how all the agents got on yet but I thought I'd get the ball rolling with the Big 2:
Tom Offermann Real Estate was first up on Thursday, April 21st, at the Sheraton. They auctioned 17 properties that day (2 on-site) and sold a total of ZERO out of the 17. "It's our people that make the difference" -- so the marketing blurb goes, but I wouldn't wish to be overly critical at this juncture and it would only be fair to see if their competition fared any better.
Richardson & Wrench also held their "Gala" event at the Sheraton, two days later. The press insisted they had 11 properties on the block, although I counted only 10. R&W managed to secure ONE sale out of their 11 efforts and this was a Receiver's Sale i.e. a property that had been taken possession of and was going to be sold whatever. The property, 37 Mossman Court, sold for $3.5m which sounds quite a result, until you consider that this masterplan development would probably have been on the market for closer to $6m under ordinary circumstances.
I think it's fair then to conclude that, without the gift of a receiver's sale, the Big 2 agents in Noosa would have turned in a total of ZERO sales at one of the two most important marketing periods of the year. Added to this is the fact that there is an absolute mountain of other property for sale in the area. At some point, something's got to give.
The above two auction events/catastrophes (take your pick) were covered in the local press. In the Friday 29th edition of The Noosa Journal, the paper's Property Editor, Geoff Crocket, titled his report (buried on Pg 12 - why so coy?):
Easter a Treat for Auctions
"With stunning blue skies, full car parks and busy beaches, Noosa certainly turned on a treat for holiday-makers this Easter .... strong crowds at the two major in-room auction events .... On Thursday night ... 101 Noosa Parade, Noosa Sound provided the most excitement of the evening ... 11 bids bringing a buzz to the room and helping to bring the sale price to the $2 million mark." ($2m was clearly nowhere near reserve and this didn't sell)
"Easter Saturday's auction ... off to a solid start ... bidding for 37 Mossman ... reached $3.49m. Apartment 5, The Emerald, 42 Hastings Street, was another standout, sold under the hammer for $740,000."
Now, you would be forgiven for thinking, having read the key bits of the article, that these gala events were a raging success, with the author mentioning just 'one or two of the highlights' while the overall tone implies there were other successes. The actualite: 1 sale (under contract, post hammer) out of 28 lots. For those of you who've spotted the obvious mistake, let me clarify that Apt 5 at The Emerald is in fact available to view this Saturday and next, should you so desire. A curious state of affairs for a property that's apparently just "sold under the hammer", I'm sure you'll agree.
Thursday, April 28, 2011
Tuesday, April 19, 2011
Terry Ryder Strikes Again!
A local Western Burbs real estate agent, Zoe Diss, is desperate to break the home-buyer's strike on her patch. To do this, she's taken to sending articles by Terry Ryder, of the Australian, to her mailing list -- articles by a journalist who, one can only assume, is in the twighlight of his career. Mr Ryder, in one of his latest columns, has either been unable or unwilling to conduct any research of his own, preferring to fall back on some recent work by another (admittedly, part-time) journalist, Michael Matusik. You'd have thought that Mr Ryder, in choosing not to conduct his own research might have picked a reliable source to draw on, but he chose instead, to lean on Queensland's Chief Property Cheerleader, a man who has more than a vested interest in seeing the property boom continue for the forseeable future. It's hard to know whether Matusik is being disingenuous in his utterances or whether he's genuinely ignorant. Anyhow, Terry Ryder's latest article headlined:
Hysterical Bubble Talk Just A Load Of Hot Air
..goes through a list of reasons (all trotted out by Matusik, recently) why the Aussie property market won't crash. I've already knocked most of these reasons over in a past blog, but there are a few presented in Ryder's article that Australians can easily understand for themselves are downright rubbish -- it may just take me to highlight why this is the case.
One of Matusik's favourite comparisons is the US property market, because it has 'non-recourse' mortgages i.e. if you get fed up paying your mortgage over there then you can just hand back the keys and you have no further obligations to the lender. There's no doubt that this isn't great for banks and that this 'easy come, easy go' policy (only for those who don't have any equity in their home) can exacerbate a property glut. However, what Matusik fails to point out is that the Irish housing market, which has full-recourse mortgages (exactly the same as Australia does) has completely melted down and is in easily as bad shape, if not worse, than the US's market. So much for recourse over non-recourse, then. Does Matusik not know this? Or is this just too inconvenient a truth for him? Irrespective of the reasons for this oversight, it doesn't do his credibility a great deal of favours.
Back to Terry Ryder briefly: he claims ".... and, notably, Reserve Bank governor Glenn Stevens, agree we don’t have a price bubble...."
No shit, Sherlock! As if Glenn Stevens is going to admit to a property bubble on his watch. How many people in his position would admit to that while in office and then risk those comments setting in motion a house price crash. Clearly the journalistic threshold at Ryder's paper is lower than many imagine. If anyone out there is currently unemployed and fancies a crack at journalism, it seems you could do worse than apply to The Australian for a job.
Back to the inimitable Matusik whose anti-bubble arguments are so thin, that a one-year-old wielding a soft toy could poke holes in them:
He says: "...also odd to claim our homes are unaffordable when we have, still, one of the highest home ownership rates on the planet.."
What has high home ownership got to do with anything? He doesn't explain -- it's just left hanging out there as though the answer were obvious. His own paper, the Courier Mail, published an article earlier in the week, saying that a recent survey found that a staggering 40% of Queensland families were struggling to make ends meet given the recent hike in the price of just about everything non-discretionary. You add that claim to Matusik's own claim that "we have one of the highest home ownership rates on the planet" and it's hardly reason to crack open the Moet & Chandon -- in fact, it's the complete opposite -- it's time to be deeply concerned, particularly in the context of the future property prices.
And yet more rubbish from Matusik: "As long as our unemployment rate stays below 8 per cent (it’s currently around 5 per cent and steady), then falls in property values are unlikely."
Where he dug this up from is beyond me and he doesn't identify his source -- quite possibly, he dreamed it one night. Generally, I like to deal in facts though, so let me quote this in response: the US housing market peaked in July 2006 (source: the Case-Shiller Index), at which time US unemployment was around 5%. A full year later, the GFC kicked off, triggered by the falls in house prices. Right, there you have two 'Matusik myths' knocked straight over, the other being that you need some or other 'catalyst' to set in motion a price crash. Here the price falls were the catalyst for the GFC, rather than the other way round, as imagined by Queensland's premier property guru.
There's nothing like avoiding the facts when you're a journalist (not to mention doing some real research) and just plumping for a load of information (however dubious) which supports your particular viewpoint. Hats off, Terry Ryder, you're a credit (or perhaps that's debit?) to your profession.
Hysterical Bubble Talk Just A Load Of Hot Air
..goes through a list of reasons (all trotted out by Matusik, recently) why the Aussie property market won't crash. I've already knocked most of these reasons over in a past blog, but there are a few presented in Ryder's article that Australians can easily understand for themselves are downright rubbish -- it may just take me to highlight why this is the case.
One of Matusik's favourite comparisons is the US property market, because it has 'non-recourse' mortgages i.e. if you get fed up paying your mortgage over there then you can just hand back the keys and you have no further obligations to the lender. There's no doubt that this isn't great for banks and that this 'easy come, easy go' policy (only for those who don't have any equity in their home) can exacerbate a property glut. However, what Matusik fails to point out is that the Irish housing market, which has full-recourse mortgages (exactly the same as Australia does) has completely melted down and is in easily as bad shape, if not worse, than the US's market. So much for recourse over non-recourse, then. Does Matusik not know this? Or is this just too inconvenient a truth for him? Irrespective of the reasons for this oversight, it doesn't do his credibility a great deal of favours.
Back to Terry Ryder briefly: he claims ".... and, notably, Reserve Bank governor Glenn Stevens, agree we don’t have a price bubble...."
No shit, Sherlock! As if Glenn Stevens is going to admit to a property bubble on his watch. How many people in his position would admit to that while in office and then risk those comments setting in motion a house price crash. Clearly the journalistic threshold at Ryder's paper is lower than many imagine. If anyone out there is currently unemployed and fancies a crack at journalism, it seems you could do worse than apply to The Australian for a job.
Back to the inimitable Matusik whose anti-bubble arguments are so thin, that a one-year-old wielding a soft toy could poke holes in them:
He says: "...also odd to claim our homes are unaffordable when we have, still, one of the highest home ownership rates on the planet.."
What has high home ownership got to do with anything? He doesn't explain -- it's just left hanging out there as though the answer were obvious. His own paper, the Courier Mail, published an article earlier in the week, saying that a recent survey found that a staggering 40% of Queensland families were struggling to make ends meet given the recent hike in the price of just about everything non-discretionary. You add that claim to Matusik's own claim that "we have one of the highest home ownership rates on the planet" and it's hardly reason to crack open the Moet & Chandon -- in fact, it's the complete opposite -- it's time to be deeply concerned, particularly in the context of the future property prices.
And yet more rubbish from Matusik: "As long as our unemployment rate stays below 8 per cent (it’s currently around 5 per cent and steady), then falls in property values are unlikely."
Where he dug this up from is beyond me and he doesn't identify his source -- quite possibly, he dreamed it one night. Generally, I like to deal in facts though, so let me quote this in response: the US housing market peaked in July 2006 (source: the Case-Shiller Index), at which time US unemployment was around 5%. A full year later, the GFC kicked off, triggered by the falls in house prices. Right, there you have two 'Matusik myths' knocked straight over, the other being that you need some or other 'catalyst' to set in motion a price crash. Here the price falls were the catalyst for the GFC, rather than the other way round, as imagined by Queensland's premier property guru.
There's nothing like avoiding the facts when you're a journalist (not to mention doing some real research) and just plumping for a load of information (however dubious) which supports your particular viewpoint. Hats off, Terry Ryder, you're a credit (or perhaps that's debit?) to your profession.
Monday, April 18, 2011
High Costs Begin to Bite Hard
A diversion from housing today albeit there are some inevitable links.
It's funny, isn't it, how the perceived increase in the cost of living never appears to be reflected in the official government stats? High inflation has consequences for wage settlements and interest rates, of course, and the last thing the Aussie housing market needs now is another round of rate rises, while the tax-payer could do without being saddled with a higher public-sector wage bill. That said, if the RBA needed an excuse to raise rates again, I'm sure inflation could be made to 'rise' again.
My friends at the Courier Mail ran with a story yesterday suggesting that as many as 40% of Queenslanders are now struggling to make ends meet, given recent hikes in food, utility and fuel prices. While I've personally been aware of the sharp increase in the cost of living, even I was shocked at the 40% number, which, if accurate, is even more of a reason to worry about the medium-term future of the housing market in Queensland. The theory goes that home-owners will hang onto their homes for grim death and will sell the shirt off their backs before handing the keys over to the bank and I'm willing to go along with that, but default willbe unavoidable for an increasing number of us, while the tought of "trading up" will be furthest from our minds. It's this trading up (along with plentiful credit) that keeps the housing Ponzi going -- and prices going up. If moving or trading up stops and first home-buyers (FHBs) disappear, the pyramid effectively starts to collapse on itself.
But enough of housing because that isn't today's bugbear. No, today my bile is reserved for Australia's large and dominant retailers -- you know, the ones that had a public whinge about Australians shopping abroad online. The Australian Dollar, as everyone knows, has appreciated north of 30% against a basket of major currencies over the past 2yrs and this makes the Cost of Goods for Australian retailers a hell of a lot cheaper. However, instead of passing on these savings to their customers the greedy retailers have decided instead to pocket the higher margins while throwing the odd bone, in the form a few "Specials", our way.
Then, when the consumer, fed up to the back teeth from being gouged by the likes of Gerry Harvey and friends decides to shop abroad, GH and Co get shirty and try to force the government to tax these imports. I firmly believe most Australians get what's going on here, and that being the case, I only hope for the sakes of these retailing tycoons that they have adequate security, because the people they've been merrily robbing all these years have a right to be furious with them. A high Aussie Dollar should be helping to mitigate (through cheaper foreign imports) the inflation being felt in other areas, but it isn't -- thanks to a few money-grubbing retailing types. As the non-resources part of the economy continues to struggle, so too will Australia's big retailers and I can't say that I'll be shedding a tear as their earnings progressively slip into the abyss over the next year or two.
No doubt they're furiously lobbying the government as we speak, threatening headline grabbing redundancies if the government doesn't act -- lobbying that's sure to intensify the closer to the next election we get. Of course, this would require Tony Abbot's LNP to come out behind the retailers on a "save Aussie jobs" ticket, a noble cause, no doubt, but one that I believe would be a nail in Abbot's coffin, because Australians have simply had enough.
It's funny, isn't it, how the perceived increase in the cost of living never appears to be reflected in the official government stats? High inflation has consequences for wage settlements and interest rates, of course, and the last thing the Aussie housing market needs now is another round of rate rises, while the tax-payer could do without being saddled with a higher public-sector wage bill. That said, if the RBA needed an excuse to raise rates again, I'm sure inflation could be made to 'rise' again.
My friends at the Courier Mail ran with a story yesterday suggesting that as many as 40% of Queenslanders are now struggling to make ends meet, given recent hikes in food, utility and fuel prices. While I've personally been aware of the sharp increase in the cost of living, even I was shocked at the 40% number, which, if accurate, is even more of a reason to worry about the medium-term future of the housing market in Queensland. The theory goes that home-owners will hang onto their homes for grim death and will sell the shirt off their backs before handing the keys over to the bank and I'm willing to go along with that, but default willbe unavoidable for an increasing number of us, while the tought of "trading up" will be furthest from our minds. It's this trading up (along with plentiful credit) that keeps the housing Ponzi going -- and prices going up. If moving or trading up stops and first home-buyers (FHBs) disappear, the pyramid effectively starts to collapse on itself.
But enough of housing because that isn't today's bugbear. No, today my bile is reserved for Australia's large and dominant retailers -- you know, the ones that had a public whinge about Australians shopping abroad online. The Australian Dollar, as everyone knows, has appreciated north of 30% against a basket of major currencies over the past 2yrs and this makes the Cost of Goods for Australian retailers a hell of a lot cheaper. However, instead of passing on these savings to their customers the greedy retailers have decided instead to pocket the higher margins while throwing the odd bone, in the form a few "Specials", our way.
Then, when the consumer, fed up to the back teeth from being gouged by the likes of Gerry Harvey and friends decides to shop abroad, GH and Co get shirty and try to force the government to tax these imports. I firmly believe most Australians get what's going on here, and that being the case, I only hope for the sakes of these retailing tycoons that they have adequate security, because the people they've been merrily robbing all these years have a right to be furious with them. A high Aussie Dollar should be helping to mitigate (through cheaper foreign imports) the inflation being felt in other areas, but it isn't -- thanks to a few money-grubbing retailing types. As the non-resources part of the economy continues to struggle, so too will Australia's big retailers and I can't say that I'll be shedding a tear as their earnings progressively slip into the abyss over the next year or two.
No doubt they're furiously lobbying the government as we speak, threatening headline grabbing redundancies if the government doesn't act -- lobbying that's sure to intensify the closer to the next election we get. Of course, this would require Tony Abbot's LNP to come out behind the retailers on a "save Aussie jobs" ticket, a noble cause, no doubt, but one that I believe would be a nail in Abbot's coffin, because Australians have simply had enough.
Saturday, April 16, 2011
Burbs Auctions April 16th - Update
84 Long Street West: a new contemporary-look house on a block just under 600sqm.
I must admit, I didn't think this property had a cat-in-hell's chance of making the $1m mark, possibly because it's just a large ugly box with a nice paint job. Clearly, BCC's Planning department, is still open to incentives in exchange for permission to build modern eye-sores in character suburbs. It's the type of house that's just about acceptable in a rundown inner-city suburb. But I digress.
The Bidding opened, after much cajoling, at $850k and the auctioneer painstakingly dragged it toward the $950k mark before the vendor had to step in at $1m to get things going again. I thought proceedings would conclude on the vendor bid but someone (unsighted by me) took it to $1.05m, at which point another bidder went to $1.06m but the auctioneer appeared reluctant to go to $10k increments albeit he accepted the higher bid. At this point, the unsighted bidder decided to move the bid straight to $1.1m from $1.06m. Maybe it's just me, but that seems a little strange (why pay $1.1m when you could potentially pay 1.07m, etc). I've seen something similar happen at an auction run by this agency in the recent past. I had to leave at this point (much to my regret) but I don't think this sold, and certainly, the reluctance of the auctioneer to move to $10k increments at the $1.05m mark suggests to me that the vendor target price was well north of this. As I said previously, I thought the property would be lucky to reach the $1m mark and was staggered when it failed to be declared "on the market" at $1.05m
To 121 (?) Hassall Street now for the auction of a small post-war house on 1300sqm (much of it sloping away). Having been on the market for several months without success, the owners clearly grew impatient and an auction was announced. When it initially went on the market, the agent said he was looking for an offer in the $1.3m area. At the auction, two bidders took the bidding to $820k at which point it was declared on the market and went under the hammer at $835k. Now, that is an impressive revision of vendor expectations: $1.3m to $835k. That's a 36% discount to the original asking price! I'd love to know how that came about. Perhaps I'll knock on their door and ask.
**I have since rung the agent about Long Street West and a colleague of his informed me that the property went under contract post the auction at 'north of $1.2m'. The listing has yet to be removed from realestate.com.au or identified as Under Contract. While not that unusual in itself, it'll be worth watching to see whether this transaction completes.
I must admit, I didn't think this property had a cat-in-hell's chance of making the $1m mark, possibly because it's just a large ugly box with a nice paint job. Clearly, BCC's Planning department, is still open to incentives in exchange for permission to build modern eye-sores in character suburbs. It's the type of house that's just about acceptable in a rundown inner-city suburb. But I digress.
The Bidding opened, after much cajoling, at $850k and the auctioneer painstakingly dragged it toward the $950k mark before the vendor had to step in at $1m to get things going again. I thought proceedings would conclude on the vendor bid but someone (unsighted by me) took it to $1.05m, at which point another bidder went to $1.06m but the auctioneer appeared reluctant to go to $10k increments albeit he accepted the higher bid. At this point, the unsighted bidder decided to move the bid straight to $1.1m from $1.06m. Maybe it's just me, but that seems a little strange (why pay $1.1m when you could potentially pay 1.07m, etc). I've seen something similar happen at an auction run by this agency in the recent past. I had to leave at this point (much to my regret) but I don't think this sold, and certainly, the reluctance of the auctioneer to move to $10k increments at the $1.05m mark suggests to me that the vendor target price was well north of this. As I said previously, I thought the property would be lucky to reach the $1m mark and was staggered when it failed to be declared "on the market" at $1.05m
To 121 (?) Hassall Street now for the auction of a small post-war house on 1300sqm (much of it sloping away). Having been on the market for several months without success, the owners clearly grew impatient and an auction was announced. When it initially went on the market, the agent said he was looking for an offer in the $1.3m area. At the auction, two bidders took the bidding to $820k at which point it was declared on the market and went under the hammer at $835k. Now, that is an impressive revision of vendor expectations: $1.3m to $835k. That's a 36% discount to the original asking price! I'd love to know how that came about. Perhaps I'll knock on their door and ask.
**I have since rung the agent about Long Street West and a colleague of his informed me that the property went under contract post the auction at 'north of $1.2m'. The listing has yet to be removed from realestate.com.au or identified as Under Contract. While not that unusual in itself, it'll be worth watching to see whether this transaction completes.
Friday, April 15, 2011
Burbs Housing Market Update
In my Sub Million Dollar Houses blog I included an update of the local market using information gleaned from the Courier Mail's Property Section and the website, www.realestate.com.au. This was sales data for the week April 2nd to Apr 8th.
I've repeated the exercise this week -- Apr 9th to 15th:
The good news is that there appears (optically, at least) to have been more sales in this past week i.e. the sales data column is longer, so I'm willing to accept that the total number of sales was higher (not very scientific and it may not actually be true but let's look on the brightside). The more pertinent data came in as follows (this includes houses and units only):
Total published property sales for the Western Burbs, plus surrounding areas: 4 (prior week, 3)
Total published property sales for the Western Burbs only: 2 (prior week, zero)
Total property sales for the Western Burbs, plus surrounding areas over $500k: 2 (prior week, 3)
Total published property sales for All Brisbane over $500k: 30 (prior week, 33)
Total published property sales for All Brisbane over $1m: 1 (prior week,3)
As I discussed in a previous blog, some simple research lead me to conclude that there are at least 1,000 properties across the Brisbane metropolitan area for sale in the $1m+ category, and the actual number is likely to be north of 1,250. With one published sale over $1m this week, you can see that there is quite an overhang (to put it mildly). I'll be mightily impressed if that clears without any serious impairment to the overall level of prices. In truth, we haven't really seen a clear move lower in prices across the board -- this is still some way off. We're in a classic seller standoff, where there's preference to hold out for the right price or simply withdraw properties from the market altogether, but the pressure on prices is building all the time and eventually they'll crack, leading to many sellers taking to a more 'proactive stance'. Then it becomes a race to the bottom, while buyers stay on the sidelines to observe. Bear in mind that all those properties that have been withdrawn for now are effectively part of the overall supply number, because they'll be back just as soon as a) the market firms up or b) the markeet cracks.
I've repeated the exercise this week -- Apr 9th to 15th:
The good news is that there appears (optically, at least) to have been more sales in this past week i.e. the sales data column is longer, so I'm willing to accept that the total number of sales was higher (not very scientific and it may not actually be true but let's look on the brightside). The more pertinent data came in as follows (this includes houses and units only):
Total published property sales for the Western Burbs, plus surrounding areas: 4 (prior week, 3)
Total published property sales for the Western Burbs only: 2 (prior week, zero)
Total property sales for the Western Burbs, plus surrounding areas over $500k: 2 (prior week, 3)
Total published property sales for All Brisbane over $500k: 30 (prior week, 33)
Total published property sales for All Brisbane over $1m: 1 (prior week,3)
As I discussed in a previous blog, some simple research lead me to conclude that there are at least 1,000 properties across the Brisbane metropolitan area for sale in the $1m+ category, and the actual number is likely to be north of 1,250. With one published sale over $1m this week, you can see that there is quite an overhang (to put it mildly). I'll be mightily impressed if that clears without any serious impairment to the overall level of prices. In truth, we haven't really seen a clear move lower in prices across the board -- this is still some way off. We're in a classic seller standoff, where there's preference to hold out for the right price or simply withdraw properties from the market altogether, but the pressure on prices is building all the time and eventually they'll crack, leading to many sellers taking to a more 'proactive stance'. Then it becomes a race to the bottom, while buyers stay on the sidelines to observe. Bear in mind that all those properties that have been withdrawn for now are effectively part of the overall supply number, because they'll be back just as soon as a) the market firms up or b) the markeet cracks.
Thursday, April 14, 2011
Naughty Naughty!
If times are tough for estate agents in the Burbs, times are tougher in the Boom Bust Belt that is the Gold and Sunshine coasts. These areas are For Sale -- in a big way.
Someone I know just received a Noosa Property Alert for a property that has just been reduced by $1m (!!) for an urgent sale. The price? $3.8m. Ugly stuff, indeed ..... until I took a look at the property details and decided something smelt a bit fishy - which may not ordinarily have been unreasonable given the property's proximity to Noosa Sound, but here's where I have an issue:
My rudimentary maths tells me that, if a property is on the market for $3.8m having just been reduced by $1m, then it's previous sale price must have been $4.8m (don't hesitate to shout if I've gone wrong somewhere here). Now, don't ask me how or why, but I know that over the past couple of years the average asking price of a fancy new-build house on Noosa Parade has fallen into the $4m to $5m bracket but the aforementioned property is an old, un-renovated house which could not (in my estimation) have been valued anywhere near $4.8m. I checked the website On the House which has (largely) reliable data and it suggested that this property, 10 Noosa Parade, had been listed for sale at various prices over the past few months varying between $3m and $4m, which only supports my contention that this alleged $1m price reduction is dubious, to say the least.
The marketing agent is Tom Offerman Real Estate, which, by a happy coincidence, is also marketing 8 Noosa Parade. Here too the sales pitch claims a $1m price reduction: "Was $4million, Must Be Sold, Now $3million".
I did wonder whether the real estate industry had any rules pertaining to "markdowns" in prices i.e. the property concerned needs to have been marketed at the elevated price for a minimum period of time before the agent is then allowed to say the price has been reduced. And if there are no rules relating specifically to this practice, are the agents free to tell bare-faced lies?
Someone I know just received a Noosa Property Alert for a property that has just been reduced by $1m (!!) for an urgent sale. The price? $3.8m. Ugly stuff, indeed ..... until I took a look at the property details and decided something smelt a bit fishy - which may not ordinarily have been unreasonable given the property's proximity to Noosa Sound, but here's where I have an issue:
My rudimentary maths tells me that, if a property is on the market for $3.8m having just been reduced by $1m, then it's previous sale price must have been $4.8m (don't hesitate to shout if I've gone wrong somewhere here). Now, don't ask me how or why, but I know that over the past couple of years the average asking price of a fancy new-build house on Noosa Parade has fallen into the $4m to $5m bracket but the aforementioned property is an old, un-renovated house which could not (in my estimation) have been valued anywhere near $4.8m. I checked the website On the House which has (largely) reliable data and it suggested that this property, 10 Noosa Parade, had been listed for sale at various prices over the past few months varying between $3m and $4m, which only supports my contention that this alleged $1m price reduction is dubious, to say the least.
The marketing agent is Tom Offerman Real Estate, which, by a happy coincidence, is also marketing 8 Noosa Parade. Here too the sales pitch claims a $1m price reduction: "Was $4million, Must Be Sold, Now $3million".
I did wonder whether the real estate industry had any rules pertaining to "markdowns" in prices i.e. the property concerned needs to have been marketed at the elevated price for a minimum period of time before the agent is then allowed to say the price has been reduced. And if there are no rules relating specifically to this practice, are the agents free to tell bare-faced lies?
Financial Review: Major Banks are Lowering Lending Standards
A few weeks ago there was an article in the AFR outlining how lending standards were being lowered in order to encourage borrowing i.e. we're back to the heady days of 95 or 97% mortgages, capitalisation of the mortgage indemnity fee, and so on. Now, call me odd, but this article just set the alarm bells clanging for me.
And I think it would too for anyone who was in possession of at least one brain-cell: "Come on folks, it's time to leverage yourselves to the eyeballs just as the housing market crash is beginning to gather pace." Isn't this just downright immoral?
And I think it would too for anyone who was in possession of at least one brain-cell: "Come on folks, it's time to leverage yourselves to the eyeballs just as the housing market crash is beginning to gather pace." Isn't this just downright immoral?
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