July 2013 - Sydney Sizzling, Hot Property Deals and more

By Rich Harvey, Managing Director propertybuyer

Welcome to your June propertybuyer market update.
In this edition we will look at;

1. Growth Predictions & Sydney Gathering Pace
2. Hot Property Alert
3. Client stories
4. Sydney Home Buyer & Property Investor Show

1. Growth Predictions & Sydney Gathering Pace

Economic forecasters BIS Shrapnel have just released their latest research showing that Sydney median house prices are expected to rise by more than 6% pa over the next three years (total of 19% over the period).  Sydney is expected to show the highest capital gain, closely followed by Brisbane, Perth and Darwin.

The researchers claim that Sydney’s median price will rise from its current level at $670,000 to $795,000 in June 2016.

Brisbane is expected to rise a total of 17% from $440,000 to $513,000, Perth is expected to rise from $520,000 to $600,000 (15%) and Darwin to rise from $595,000 to $655,000 (10%).  Strong population growth, low interest rates and deficient housing stock are the key drivers of price growth in these three capitals.

Forecasts for Melbourne, Adelaide, Hobart and Canberra will only rise very modestly as the supply of housing is in step with demand and these area have already experienced a peak in construction work.  In contrast both NSW and QLD are the two states with the greatest under-supply of  housing stock.  Interest rates are predicted to decline further which will stimulate demand in the residential market.  BIS Shrapnel sees the economy transitioning from one driven by resource investment to one driven by consumption and business and residential investment over the next 18 months.

At the ground level we are seeing the sub $1 million segment of the Sydney property market sizzling. Buyers are frantically chasing properties with little regard of comparative values.

Stock levels are extremely tight and auction clearance rates are the highest level in the last three years. Some properties are going to tender and are selling over full listed price. The typically subdued winter market in combination with a gross lack of stock and increase in buyer confidence is contributing to the rising property prices.

The market dynamics are changing.  In a rising market buyers have to move quickly to agree on price and secure a property.  Buyers are increasingly utilising the services of a buyers' advocate to get ahead of the pack.  We’ve had a 20% increase in buyers’ agent work in the last 6 months as a result of increased confidence in the property market.

The message for buyers in a rising market is simple - It is more crucial than ever to conduct a thorough analysis of property value to avoid the mistake of overpaying.

Many buyers are catching the “FOMO” disease - The fear of missing out (FOMO) is clearly driving some buyers to become emotional with the transaction and therefore paying in excess of comparative market value.

Recent examples include the following:

• 2 bed, 2 bath, 1 car apartment in Stanmore - propertybuyer appraisal the property at $725,000, the vendor expectation was $750,000, the property sold for $795,000.
• 2 bed, 1 bath, 1 car apartment in Mosman - six contracts and four offers after the first open, two of them were above asking price, the property sold on the Monday after the first open.
• 2 bed, 1 bath, 1 car apartment in Wollstonecraft - price guide over $650,000, nine registered bidders, the property sold for $784,000 at auction.
• 2 bed, 1 bath, 1 car apartment in Crows Nest - auction bidding guide from $620,000 - agent expecting $680,000, the property sold for $740,000.
• 2 bed, 1 bath, 1 car apartment in Queenscliff -$650,000 + price guide - agent indicated $700,000 should secure the property then changed this figure to $750,000 after the first open where 52 groups inspected the property and 14 contracts were issued.

Last year we typically saw around 3 to 4 bidders at auctions in the key Sydney markets. This year we are seeing around 7 to 10 bidders on high quality properties.

The tight supply situation is likely to continue for some time and put gradual pressure on property prices. The positive news should encourage more vendors to list their property for sale.  Despite the slight increase in building approvals last month, it will not be enough to alleviate the price pressures on buyers for the Sydney market.

Low interest rates, increased consumer confidence and the reduction of the negativity in the media towards the property market is contributing to current demand out-stripping the supply.

2. Hot Properties

We’ve uncovered another gem property deal for you.  It ticks all the right boxes for investors in terms of price, location, market cycle timing, yield and quality of finishes.

It’s located in Newcastle which is benefiting from a growing population, a revamped CBD and more affordable housing options. The Newcastle property market is expected to perform strongly rising 18% over the next three years according to leading researchers BIS. Shrapnel. This opportunity is a rare development in a premium inner city location.

It comprises a selection of 1, 2 & 3 bedroom apartment styles.

• Priced from $359,000 for 1 bed, $585,000 for 2 beds
• Rent for 1 bed from $425pw to $470pw – delivering over 6% yields!
• Waiting list of high end professional tenants willing to pay premium rental providing above average yields
• Select from a variety of interior designs and floor plans.
• Lifestyle-inspired, creative design by renowned Architects.
• Private outdoor areas for each individual apartment.
• Lush landscaped grounds and courtyard retreats.
• Security sensitive development including car parking.
• All the creature comforts of inner city living, in a premium development. With spacious interiors, pleasant outlooks and contemporary style, this development already has a waiting list of high end professional’s attracted to this enviable inner city leafy suburb in Newcastle. Shopping, dining, exercise, relaxation and entertainment are right on your doorstep.

Interested?  Please contact Jason Low (Manager Client Relations & Strategy) 1300 655 615 or 02 9975 3311 or email your enquiry to info@propertybuyer.com.au to be a part of this unique opportunity.

To review the full details of this opportunity you will need to sign a simple confidentiality agreement which protects our interests in the property.  If you purchase a property, a sourcing fee will apply.

3. Client Stories

Here is a selection of feedback from some of our happy clients last month:

"...recommended as a good professional outfit."
Gordon R, Pilot

Buyer type: Investor
Buyer's brief: To buy a property for our 2 adult sons to to live in and as an investment
Location: Redfern

Gordon's story

Our solution
I did not have any time nor was I in Sydney and also felt I did not have enough knowledge of the Sydney Market. I was concerned about finding the right property, paying too much and buying a property with ‘problems’. Propertybuyer solved my concerns by using a knowledgeable buyers’ advocate. I felt afterwards that I have purchased a good property, located in a desired area at a reasonable price considering the market conditions. I recommend propertybuyer as a good professional outfit.

"…solved my concerns by using a knowledgeable buyers’ advocate."

Buyers' Advocate, Anna Rorke
Gordon engaged our company to find a unit for his 2 Sydney based sons to live in. They wanted something close to the city, with good transport links and in an area that would suit their lifestyle and have good growth prospects. In such a tight market we did have a few false starts by managed to purchase a great apartment for the boys by being able to move very quickly to secure the sale.

5. Home Buyer & Property Investor Show - FREE TICKETS

Navigate your way to smarter property buying decisions at the leading Sydney Home Buyer & Property Investor Show.

When: Friday 19th, Saturday 20th & Sunday 21st July
Times: 10am - 5pm
Where: Sydney Convention & Exhibition Centre

FREE TICKETS
To download your free tickets to this month's Home Buyer & Property Investor Show courtesy of propertybuyer, simply click here and when prompted, enter the promotion code PROPERTYBUYER. Your FREE tickets will be emailed to your inbox.

Rich's Seminar "Advanced Property Strategies - Grow Your Portfolio Faster"

Where: Property Investor Stage at the Show
When: Friday 19th, Saturday 20th & Sunday 21st July
Times: 11am

You can't retire on one property investment alone so join experienced Buyers' Advocate Rich Harvey, who will show you how to create a strategy to build a safe and sizeable property portfolio using simple but clever strategies. This seminar will cover:

• How to buy property at wholesale rates
• Advanced research techniques
• Renovation strategies
• Positive cash flow strategies
• Instant equity strategies
• Subdivision strategies
• Off-plan vs Options
• Advanced financing ideas

We are looking forward to seeing you there and be sure to visit us at Stand 222!