Wednesday, September 30, 2009

Seasonal vacancy rates blow out. Selling this year? time is running out!

Rental Crisis abates as seasonal vacancy rates blow out, relieving pressure on tenants while landlord’s control on the market returns to the long term normal. We constantly hear about the housing shortage and while that must be true (everyone says it is), just at the moment there is little evidence of this.

The rental market is subject to seasonal fluctuations more than sales. Interstate moves are more prolific during the summer months and the school terms play a significant role in the timing of a rental move. So what is the issue?? Last year rental properties were at record low vacancy rates, and rental prices were rising as a consequence. It was common to have applications over the asking rent and we even heard about tenants bidding for properties. Given rentals spiked in spring last year and tenancy agreements generally run for 12 months, there will be some cases where rents will be realigned to today’s more balanced conditions.

The impact of the first home owner’s bonus has played a part as well. The lead up to the 30th September wind back has created a bubble of additional vacancies which comes on top of the seasonal impacts. From our figures, 28% of current vacant properties have been a direct consequence of first home buyers breaking leases.

Vacancy rates across Adelaide are currently tracking around 1% up on their lows and are as follows:

Coast - 2.2%

Northern - 1.2%

West - 1.35%

East - 2%

City/South - 3%

Hills - 2%

The rental market is considered as in balance when the vacancy rates sit at 2%.

The sales market is really great for agents and sellers at present and sales are fast and furiousÉ again, it is not a boom as when a property is not price aligned to the market it will just sit there. In the boom, even overpriced properties were selling.

The AFL Grand final is behind us, long weekend and school holidays are nextÉ then the spring story will begin in earnest. Call one of the team ASAP if you want to sell this year, time is running out.

Remember, some fantastic Q&A can be found at

http://asktoopie.blogspot.com



Anthony Toop, Managing Director.


www.toop.com.au


© Toop Real Estate Group

Monday, September 28, 2009

Biggest increase in wealth in four years; Super fund cash holdings at record highs- CommSec Economics

Hi InsideStory readers,

I think if you are feeling a bit down, and want a lift, read this report.



CommSec Economic Insights 25-9-09



Wow, the optimism is uplifting. There is talk of where all the cash will go, let’s hope it ends up in property!

Regards


Anthony Toop, Managing Director.


www.toop.com.au


© Toop Real Estate Group

Home sales surge - CommSec Report.

Hi InsideStory Readers


So here is more excellent news showing strong signs of recovery and property is looking great.

If you believe the shortage of supply, and the peaking of unemployment, providing the Reserve Bank doesn’t ramp up interest rates it is all good.

You will find some excellent information for those following the property market in this report.

CommSec- Enconomic Insights (pdf)

Regards



Anthony Toop, Managing Director.


www.toop.com.au


© Toop Real Estate Group

Thursday, September 24, 2009

Investigating ways we can further optimise sale results under extreme conditions

Thank you for your positive feedback on last week’s USA Study Tour 09 report. For those that missed it, we reported from the frontline of the USA property market. Genevieve Toop (Bachelor of Business - Marketing) accompanied me on this trip during which we learned a great deal, and not just about the market conditions. Most importantly (for Toop clients), we investigated ways we can further optimise sale results under extreme conditions. Hopefully as an outcome our clients will receive further enhanced services within weeks!



I noticed while I was away there has been some huff & puff about who is the king of the TOP end market in Adelaide. Interesting to compare the way the Real Estate Agents in the USA compete as compared to our own local market. Gen and I got a ‘behind the scenes’ look into the prestige operators in California and saw first hand the points of difference in the way they provide service. Now we are reviewing the information and compiling an implementation plan of anything worth adopting.



Basically due to the fees the real estate agents receive in the USA all ‘new’ concepts to our market need to be viewed and tested locally against sustainability and any cultural differences. To provide perspective; In the USA one half of one sale a month results in an annual income of approximately $200k. In South Australia agents essentially do 8 times that (4 entire sales ie handle both buyer & seller) to achieve the same annual income. There is an important difference with how the commissions work. Apart from the fact that in the USA they get approximately 3 times as much, the real estate sales person pays the marketing costs of every property. This one, seemingly irrelevant difference is driving a massive shift to online marketing…more on that later.



Our challenge has always been to systemise & streamline the real estate process to see how close we can get to their intimate service levels, while maintaining enough sales to exist. From previous trips our VirtualAgent selling system was born, automating communication to consumers. There are a lot who whinge about real estate agents in Australia, but those whingers, I assume, have no concept of how tough and low margin this business really is. We are an industry running largely on perception and bravado of success. We all run around in fancy cars and suits to ensure we exude confidence - the same applies in the USA. Only an elite few actually make serious money. Despite the 6% fees paid in the USA, agents are currently dropping out of the industry in BIG numbers.



Online advertising of property is MASSIVE in the States. Print is dying at a rapid rate, not through normal evolution but as a direct consequence of the changed market conditions and the way commissions are managed. Sales people personally pay all marketing costs and, given the long selling times, cannot afford the luxury of print advertising. Pretty simple, the less they spend selling a property, the more they get to keep.



Property publications were thick books 2 years ago, they are now VERY thin. Press ads are under extreme stress. We spoke to a lot of agents and with two exceptions they had, or were currently, exiting the papers. Clearly this was driven by costs to the sales person and not directly related to what the customer wanted. They are in survival mode. The premium end of the market has remained the strongest advocates of print.



Our investment in marketing technology is really paying off. We are moving up a notch and I am spurred on by what I have seen. We visited the ‘best of the best’ in California and no one has an in-house IT team the size of ours, nor anything that compares with our online marketing systems, and from what we saw we are way ahead in the online mobile space. Given this includes the best operators in the Silicon Valley we are more than happy to be challenged on this. Without being silly, I am confident Toop&Toop are the world leaders in online real estate marketing at the moment.



Back home…sellers, we have had a huge run of sales and are short of stock, we want to hear from you urgently. While we enjoy the profile associated with our reputation of TOP END sales excellence, we are strong across the entire price spectrum; it is just that you never hear about those successes in the paper. Remember, thanks to our technology and systems, it costs no more to have the best!



Anthony Toop, Managing Director.


www.toop.com.au


© Toop Real Estate Group

Monday, September 21, 2009

Prices have stopped falling: REIA Real News Iss. 36.

Hi InsideStory subscribers, here is a Real Estate Institute of Australia report that contains some top line info on National prices and some links to Westpac business confidence report and to the Reserve Bank report.

The Real News, Issue 36 (pdf)


Also you will see the Mortgage Choice feedback that investors are about to enter the market after the first home bonus winds back starting on the 1st October 09.



Only 3 pages so quick and easy!



I have a great deal of news on the USA property market from interviews and discussions with the industry over the past 2 weeks. There are opportunities over there if anyone wants to have a play. Go to www.asktoopie.toop.com.au if you want any specific feedback.



Regards






Anthony Toop, Managing Director.




www.toop.com.au


© Toop Real Estate Group

Monday, September 14, 2009

Has the jobless rate peaked? (Commsec)

Latest update on employment rates from CommSec, with unemployment levels remaining steady at 5.8% through August.

Has the jobless rate peaked?: CommSec Report Sept 14(PDF)



Anthony Toop, Managing Director.


www.toop.com.au


© Toop Real Estate Group

Thursday, September 10, 2009

the market is about to get busy; volumes of sales and buyers set to increase.

With the first weeks of Spring behind us, we’re yet to see the traditional flood of properties hitting the market. Good news for sellers with less competing properties for a little while longer! According to RP Data’s Tim Lawless, the market is about to get busy. The analyst’s Market Activity Index is showing that a strong ramp up in Adelaide’s property market is expected through to the end of the year, with volumes of sales and buyers set to increase. The first 6 months of ’09 saw Adelaide transactions increase by around 8%, below the national level of 15% due to a slight ‘hangover’ from the mini boom in ’07. On the frontline it’s looking positive and appears we may not experience a ‘whitewash’ of the market as in Spring ’08. Sellers – there’s still time to make the most of this market, so get to it!


Anthony Toop, Managing Director.


www.toop.com.au


© Toop Real Estate Group

Friday, September 04, 2009

Big Sales... Big News.

Some big sales are happening & we have had a clean out of properties with the phenomenal winter '09 season, one of the best we have ever seen. As we reported last month, Toop&Toop recorded the largest number of July sales we have EVER had! August was also huge & we’re waiting for the final contracts to be processed to see just how well it went. With sales this strong, all owners should celebrate the return of confidence to property.

Here is an example. Last weekend we had 10 registered buyers for a $2million property at Glenside with competitive bidding taking the final sale price 10% over the reserve, now that is as good as it gets! The result is 1 happy buyer & 9 active “ready to go” buyers who are left looking for a home (actually we have a total of 1014 buyers looking over $1.5million). So if you have a large property… we need to hear from you.

This week we posted the latest CBA, CommSec & RP Data reports on insidestory.toop.com.au. The RP Data “National Home Value Indices” headline reported a 5.9% national growth in house prices. South Australia had the lowest growth at 1.9%, but in our view we remain the State with the most stable property prices & a safe haven for investors.

Windback - $14,000… Countdown - 27 days

Remember to go GREEN if you are a first home buyer. Turn to our page that is all green to find your new home, or better still if you have an iPhone, log onto Safari & go to iphone.toop.com.au. We launched fun yet powerful ToopPA, essentially your own personal assistant to assist you find your new home.

Responsible Agency Practice. I am pleased to say that Toop&Toop has brought forward as much Spring stock as we could with tremendous success. This has not only helped optimise our client’s sale results but will help reduce the negative impact of oversupply in late Spring. The other dynamic to watch out for is SPRING DUMPING of properties on the market. DUMPING occurs when an agency stockpiles properties & then suddenly DUMPS IT on the market in an attempt to look impressive & kick start THEIR spring season. This is a dangerous, outdated strategy & irresponsible for property sellers. We hope it will not occur this year.

Interest rates were on hold again this month, thank goodness. The concern is the prediction that rates will rise very soon, most likely in November. The other issue brewing for property owners relates to Capital Gains Tax, we will look at that soon.

Over the next 2 weeks I am doing my 3 yearly tour of the USA real estate industry. All being well I will provide you with the InsideStory on market conditions direct from the States on the 19th. I also look forward to bringing you the latest marketing & sales techniques from the toughest prestige markets in the USA.

Plenty of reports to look through this week.


Anthony Toop, Managing Director.


www.toop.com.au


© Toop Real Estate Group

Wednesday, September 02, 2009

Leaving the gloom behind: CommSec Report

Hi InsideStory Subscribers,


Leaving the gloom behind: CommSec Report Sept09(PDF)

Yes CommSec 1st September 09 report and just 3 pages. If you are wanting to have a lift, read this, all good!.



Regards


Anthony Toop, Managing Director.


www.toop.com.au


© Toop Real Estate Group

For your interest: CBA Month in Review

Hi InsideStory subscribers,



This is a 13 page review from CBA which is more general Financial Review and NOT directly related to real estate.

CBA-Month in Review August 2009(PDF)

We do not normally include general reports like this but some of you may be keen to have a read.



Regards



Anthony



Anthony Toop, Managing Director.


www.toop.com.au


© Toop Real Estate Group

Tuesday, September 01, 2009

South Australian property market: all about stability.

Here is the latest from RP Data on house values around the country.
RP Data Rismark Home Value Index August 312009.pdf (PDF)


Adelaide is on the bottom of the growth chart at 1.9% Year to Date July 09, BUT keep in mind we did not get the negative growth experienced by the other Capital’s. This serves as a reminder yet again of just how stable our South Australian property market is.



Great reading,





Anthony Toop, Managing Director.


www.toop.com.au


© Toop Real Estate Group