May 2012 - The Key Drivers of Property Prices
May 1, 2012 / Written by Thirst Creative
By Rich Harvey, Managing Director propertybuyer
Welcome to your May propertybuyer market update.
In this edition we will look at;
- The key drivers of property prices
- Client stories
- Webinars & Seminars
1. The Key Drivers of Property Prices
The decade ahead is unchartered waters for property prices. Some economists confuse market "indicators" with economic "drivers" when discussing the property market (see list below). In this article we look at the real drivers of property prices and what this means for your property strategies.
Predicting the direction of the property market is a difficult task. Are we entering a new era in property market dynamics? How will uncertain economic growth and demographic changes impact the property market in the future?
Over the past few decades we have seen property prices increase in most capital cities in the range of 6% to 9% pa. See the two charts below which outline the average capital growth of each city over a 10 and 20 year period respectively.
2. Client Stories
Here is a selection of feedback from some of our happy clients last month:
Buyer type: Homebuyer
Buyer's brief: Relocating to Sydney - bright apartment located near cycle ways and parks
Asking Price: Offers over $600,000
Purchase Price: $590,000
Saving: $10,000+
Buyers' Agent Comment:
Mary-Joy and Alex were expats living in New York, who were looking for a home within walking distance to the beach in the Eastern Suburbs area. They were looking to rent it out for a couple of years until they returned home, depending on their employment situation in the USA. They had originally engaged propertybuyer to appraise and negotiate on a similar property within 100m, but unfortunately it sold for $20,000 over our appraised level and approximately $70,000 over their budget. After discussions with sales agents we were able to locate an off-market property that was due to be publicly listed in springtime, upon the expiration of the tenants lease. Due to our relationship with the agent, we were able to gain access to the property and following an appraisal, we negotiated a price that was below our recommended level and approximately $225,000 lower than the original property they had missed out on. It was just 200m from Clovelly Beach and equidistant to transport and the local shops. Alex and Mary-joy returned to Australia to view the property on settlement and were both very happy.
What our clients say:
We wish to thank Anna and her team for their prompt and professional service. Anna was able to build rapport with comfortable ease, acted with integrity and efficiency and utilised her outstanding knowledge of the Inner West market to achieve a wonderful result
The communication we received through the entire process was first class. We were very pleased to get a great result so quickly, especially given our time constraints and that we were purchasing from interstate. Janine (Secondary Teacher)
Buyer type: Homebuyer
Buyer's brief: Busy Doctor looking for an 'appraisal and negotiation' service for a home purchase
Asking Price: $755,000
Purchase Price: $735,000
Saving: $20,000
Buyers' Agent Comment:
Jason had located a home and wanted to proceed in making an offer but was unsure of the property's value, and like most people inexperienced in the negotiation process. Another limiting factor was the fact that Jason worked in an Intensive Care Unit with twelve hour shifts for seven consecutive days at a time. There was some other interest in the property, so I organised an inspection immediately and completed an appraisal the following day. At the same time, I organised a solicitor to review the contract and a pest and building inspector to visit the property within 24 hours. It all moved quickly for Jason, but that is often the case with property purchasing. He later commented that he would have missed out on the property as he hadn't realised the necessary urgency that is sometimes required.
What our clients say:
I could not have been more impressed with the service provided by propertybuyer and my Buyers' Agent Matthew Corbett. After casually looking for a home on and off for a few months my partner and I found a possible home during an open house on a Saturday. I contacted propertybuyer on Tuesday and spoke with my Buyers' Agent on Wednesday. By Thursday I was reading a comprehensive market appraisal on the property and on the suburb. On Friday an offer was made, the price negotiated and the offer was accepted. Matthew arranged for an urgent review of the contract and I signed a contract on Friday afternoon. This all took place whilst working full time as a Doctor without any need to take time off work. My Buyers' Agent drove to my work with the contract, arranged for a deposit cheque to be delivered and most importantly prevented me from needing to have any contact with the vendor's agent. I have not been more relaxed during this process (very unlike my past experiences). If it had not have been for propertybuyer, I am certain that things would have moved too quickly for this great property to become our home. From the moment that I called propertybuyer I was impressed with the Appraise and Negotiate Service. Receiving a call from the Managing Director and receiving an unexpected gift following the contract becoming unconditional, highlights propertybuyer's commitment to outstanding customer service. I highly recommend the team at propertybuyer to assist with your next purchase. Jason (Doctor - ICU)
3. Webinars & Seminars Coming Up
propertybuyer is regularly providing seminars, interactive webinars and much more. Click the links below to find our more information and register.
Your Investment Property Magazine - Property Investors Forum
Saturday 26th May, 2012
Our very own industry leaders Rich Harvey and Michael Fuller will be speaking, learn how to become a property tycoon, hot suburbs for the next decade and much more!
How to Buy Positive Cash Flow Webinar
We'll show you how the figures stack up using our clever granny flat strategy plus so much more!
Build a Bigger Property Portfolio in 2012
Discover how to rapidly grow your property portfolio, like a seasoned professional investor!
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