Wednesday, May 11, 2011

The real estate cycle

As real estate agents one of the questions we would have to be asked most is, ‘when is the best time to buy real estate’?

Well I’m going to let you in on a little secret…the time is NOW!


After 26 years in the business we’ve seen property prices fluctuate in what’s known as the 7 year cycle of real estate. We see the market peak, then it slows to a flat period and peaks again.


We’ve certainly entered a reasonable time in South Australia, where as discussed in last week’s inside story, Adelaide is the most affordable mainland capital city to live in.


In fact, the latest RP Data Real Estate Market Update reported the market has been fairly flat since May last year and has weakened even further in recent months where, “during the last quarter property values across the combined capital cities have fallen by 1.3%.”


This is good news for those of you looking to acquire property as we are now in a ‘buyer’s market’. RP Data’s statistics show last month in South Australia there were 4,460 new advertised listings. This is quite an increase compared to the 3,244 new listings, which were advertised at the same time last year. With so much choice around this means there may need to be some adjusting in a vendor’s expected selling price when they’re looking to move on.


Buyers you’re also in luck with numerous beautiful properties coming on to the market in the past week. We have homes available ranging from affordable stylish apartments in the heart of the city all the way through to million dollar mansions in South Australia’s most prestigious suburbs.


Another key indictor of the flat lining market is some of the people we have spotted at our open inspections in the past couple of weeks. This market brings out the players in the property game. From our experience these savvy buyers only look at real estate when the market has nearly bottomed out. And when they lead the rest do follow.


When we caught up with this year’s National Residential Salesperson Winner Tim Heavyside, he discussed the 7 year cycle and had some helpful hints for vendors looking to sell in this particular phase…"price, marketing, exposure and the method of sale…all of these factors have to be right.”


For more details on the cycle of real estate with Tim Heavyside take a look at Wednesday’s episode of Toop.TV. While you’re there you can also find out about the financial checklist for potential property purchasers with Wealth By Design’s Christie Rigg and Tim Rogers. That’s all under Episode 78 at www.toop.tv.


Buyers this is you’re time so don’t hesitate to dive into the property market as you’re likely to be waiting another 7 years before the real estate market is this good again!


Mandy Wurth, General Manager.
www.toop.com.au
© Toop Real Estate Group

Wednesday, May 04, 2011

The March quarter results are in!

The big property news this week… RP Data’s release of the first quarter figures and the RBA’s smart decision to keep interest rates on hold for a little while longer.

There were certainly a lot of property owners breathing a sigh of relief when the announcement of a stay to the cash rate came through on Tuesday. No rushed rise by the Reserve Bank board, despite last week’s higher than expected inflation figures, is a win for the property market. It’s provided another pocket of opportunity to bring down stock levels and improve the housing supply/demand imbalance we’re currently experiencing.

Nationally the number of homes for sale is nearly 30% higher than at the same time last year, according to the newly released March Quarter results from RP Data.

The results paint a realistic, but far from rosy picture. While the rental sector is seeing a gradual improvement in weekly rates, dwelling values recorded a fall in each capital city with the overall average recording a softening of 2.1%.

Annually, to March 2011, Sydney was the highest performer with an increase of 2.1% while at the other end of the scale, Brisbane saw a decline in values of 6.8%.

As always Adelaide has skirted through the peaks and troughs a little better than most. Property values recorded a quarterly decline of 1.6% and a stable past 12 months with 0% change.

Whichever way you look at it, the market is in a partial state of limbo.

The significant drop in first home owners looking to buy property, is causing those selling homes at entry level to step into the next price bracket at a much slower rate than previously experienced. This has created a noticeable stalemate in both the low to middle ends of the market right now, however a change is inevitable.

“With first time buyers now representing a bit less than 15% of all owner occupier housing finance commitments, it is likely that market activity in the first-time buyer market will increase in the medium term,” according to RP Data’s Research Director Tim Lawless.

From what we’re seeing on the frontlines, the news gets a little better. At the Top End of the market it’s far from doom and gloom.

This area has remained out of reach of the first home buyer impact. In fact we’re seeing some great results, with beautiful homes that are priced right being snapped up in a matter of weeks!

We spoke further about the state of the market with RP Data’s Research Analyst Cameron Kusher on Wednesday’s episode of Toop.TV. To hear what he had to say go to Episode 77 at www.toop.tv.

Adelaide tends to avoid the extreme highs and lows of the market, and while that may seem boring to hard-line investors, we actually think we’re lucky.

Sometimes ‘Boring is Beautiful’.

Mandy Wurth, General Manager
www.toop.com.au
© Toop Real Estate Group