Is Now A Good Time To Get Into The Real Estate Market?

When it comes to the world of buying property, everyone says timing is everything or choosing the right time to enter the market can make you or break you.

Whenever you decide to buy your first home or investment property, time is on your side. Over the long term, history suggests the compounding returns of a well-chosen property will add up, whatever the market happens to be doing when you first buy. My advice would be getting into the market rather than watching it from the sidelines.  One of my favourite quotes:

"In baseball and in business, there are three types of people. Those who make it happen, those who watch it happen, and those who wonder what happened." -- Tommy Lasorda

What about buying today?

Cheap money or low interest rates create a great opportunity. Low interest rates lead to low monthly payments, this increases your chance of getting a mortgage as your serviceability increases. Years from now, we'll look back and say, "Remember back in 2016 when you could get a mortgage under 5%? Those were the days!"

Don't listen to the media 

The media pays meticulous attention to the real estate market. Auction results go up? The market is booming! Auction results go down? The market is crashing! Back and forth over and over. Remember, the media platform is accountable to advertisers that spend money with them, selling clicks rather than wise investment advice.

Real Estate Prices Are Cheap!

Yes, real estate prices have climbed significantly over the last three years. However, for those willing to hustle to find great deals or use a buyers agent, great deals can be found. I remember my Dad telling me how expensive real estate was in the 1980’s, Melbourne’s median house price was around $89K, and today it’s around $750K! Ten years from now you will likely look back at 2016 and say, "Why didn't I start back then?"

By Mark Ribarsky. Wise Real Estate Advice

We welcome your questions and feedback. If you would like to ask a question or leave a comment, please email info@wiserealestateadvice.com.au

Renting in a Competitive Market

     Finding a rental in a competitive market is a struggle many people go through. With more people looking than properties available, it can be very difficult to secure a place to call your own. The following tips offer a few strategies to help you stand out from the crowd and find a rental that’s right for you.

1.    Flexibility

 The larger your list of ‘must haves’ the smaller your pool of potential rental options. Assessing what you really need in a property, rather than just want, is a good first step to opening up your options for finding a property. Being flexible with the type of property and suburb will often produce more options than if you will only settle on a house in a singular suburb.
 Amenities also need to be revisited. It may be nice to live in a place with central air conditioning and an alfresco, but with such a competitive market it is easy to see that many people will be after the same. A diamond in the rough may look a little worse for wear, but if it still has split systems in the main areas and an entertaining area out the back, you may find just as much comfort and your search will be over. On the opposite side, expanding your location options a little further out may provide the modern property and amenities you are after. Review what you need and what you’re willing to compromise on to help expand your options.

2.    Pay a Little More

 In a competitive market rental prices are bound to increase. Knowing what you paid at your last property isn’t necessarily an indicator of what you will need to pay today. As with all commodities, rental prices increase along with demand and the reduction of supply. Evaluating your budget options is essential to knowing what you can realistically afford and whether the properties you would like are even possible.

3.    First Impressions Count

 It may just be a rental inspection to you, but to the property’s owner or real estate representative it is the first time they will come into contact with a person who may potentially live in a property for a long time. It pays to look presentable and act respectfully to all you encounter to ensure you make the best first impression possible.

4.    Be Organised

 Being organised with an application furthers your chances of securing a property. In a competitive market, properties don’t usually last on the market long, therefore applying for a property quickly will mean you’re in with a chance. Many agents are willing to release a generic rental application form before inspections that will help you organise the correct paperwork to submit when the time comes.

5.    Pet Ownership and Finding a Rental

 In a competitive market agents and owners have the opportunity to be picky with who they rent a property to. Owning a pet may be seen as a liability to some owners and many properties list that pets aren’t allowed. The options for pet-friendly properties may be smaller, but it pays to contact local agents and ask whether they know of any properties that are pet-friendly, or whether an owner of an existing property would be flexible if you paid a pet rental bond. Offering to pay a little more to take your furry friend with you may make the process of finding a property a lot easier.

More info at www.propertymanagersmelb.com.au

Buying Property, Time To Buy Or Wait?

Warren buffet once said, ‘Buy when people are selling, and sell when people are buying.’ As an investor it is important to know where the market is within the cycle to ensure you secure your property at the right point of a cycle to maximise your returns. Below, two news articles making reference to Manhattan real estate prices over a space of two years.  

2014: 

Manhattan Real Estate Prices AreStill Going Up, Up, Up

2016: 

There’s a new normal in high-end Manhattan real estate: discounts

Understanding where we are in a cycle could help you make a decision about whether to buy or sell property, depending on whether you think values are likely to grow, stagnate, or decline. 

Boom Phase:

-       Properties often sell for more than their asking price.

-       Buyers out number sellers.

-       Generally the shortest of all the cycles.

-       Real estate prices are going up.

-       Buyers are stretching their finances to purchase property.

-       Not a great time to purchase real estate

Transition Phase (Boom to downturn)

-       Not a wise time to buy real estate.  

-       Outer suburb real estate prices start declining.

-       Auction clearance rates are declining.

Downturn Phase

-       Oversupply of property’s on the market.

-       Properties sell for less than their asking price.

-       Real estate prices are going up.

-       Sellers out number buyers.

-       Increase in bank foreclosures.

-       Great buying opportunities.

Recovery Phase

-       Transition from a slump to a boom.

-       A great time to purchase real estate.

-       Prime real estate pockets start increasing in price (inner city). 

We welcome your questions and feedback. If you would like to ask a question or leave a comment, please email info@wiserealestateadvice.com.au

Mark Ribarsky

Why Is It A Sellers Market?

Looking at the Inner Melbourne real estate market. An extreme shortage of available listings has made this the fastest-moving market of recent years. There is strong competition in the luxury market combined with scarcity. As real estate becomes more scarce in prime areas of our city, it become more and more desirable, and expensive.

Demand is high at all price points in and around a 10km radius of Melbourne. Inventory is low and we are seeing more bidding wars and higher prices per square meter than ever before. Auction clearance rates are over 90% in some inner Melbourne suburbs, that’s 9 out of 10 property’s selling at auction.

Another reason why bidding wars are erupting is due to the rising trend of Chinese investment. The impact of Chinese investment in Australia residential property has become increasingly recognised. You might be thinking why Victoria? Investors are spotting value in Melbourne real estate in comparison to big brother city Sydney. The median house price in Sydney tipped over $1M last year where Melbourne is hovering around $750K.

Population growth is another contributing factor of rising real estate investment. Over the past 12 months, Melbourne has recorded the fastest rate of population growth at 2.1%. Elsewhere, the annual rates of population growth have been recorded at 1.7% in Sydney, 1.6% in Brisbane, 0.9% in Adelaide, 1.6% in Perth, 0.8% in Hobart, 1.9% in Darwin and 1.4% in Canberra.

Mark Ribarsky is the Director of Wise Real EstateAdvice, a buyers agency that services inner Melbourne suggests ‘the real estate market is experiencing a stage in an up and down cycle.’ Property cycles usually run in "seven year cycles" hence is often referred to by property market commentators and refers to the swing in house prices through the phases of boom, bust, bottoming and recovery. Overall, price gains are likely to be constrained and over the long term, given that house price-to-income ratios and debt levels are very high and given we have just seen a period of very strong gains.