What's Changed?

The news of election almost always puts a freeze on buyer activity. In the past we've seen buyers hold back with the 'wait and see' attitude, however this year feels quite different and we put that down to two reasons. Money is still cheap. Historically we are experiencing record low interest rates and unlike our post-GFC low rate period, this one has continued on for a very long time. Many property owners have become acclimatised to these low rates and despite talk of the property market's high record prices locking buyers out, the debt servicing ratios (DSRs) are not at record highs. Competitive bidding is continuing to drive prices up in the inner and middle-ring areas as proof of this. Secondly, we have reduced 'stock numbers', ie. less vendors are selling right now than at this time last year. This is driving the 'Supply and Demand' ratio further down, and buyers realise they have to compete harder now than a year ago.

We've seen the changing investor lending effects first hand at the coal face. Since APRA instigated changes among the lenders twelve months ago, investors have experienced tougher conditions, higher levels of scrutiny and some property types altogether have been less favourable by the banks. In particular, new high-rise Off-The-Plan sales have suffered and we've witnessed distress sales in this segment of the market.

We don't favour new or high-rise for varying reasons, and bank scrutiny is one of our many reasons.

The under-quoting mystique has plagued Melbourne for years. Buyers hate it, vendors are confused by it, and right now agents are anxious about it. People have lobbied it on radio and in the printed media and finally our regulators have decided to crack down on it. Some precedent cases earlier this year set the tone and as the news of agents being fined has featured in daily newspapers, many agencies are changing what used to be considered the norm. Annoyingly, the crackdown has resulted in agents eliminating their quoted ranges altogether. The number of "POA" (price on application) online ads have increased dramatically and buyers are still no better exposed to genuine price quotes by many selling agents. But as we've always said, there are better ways to establish a clearer idea on the real price.

And lastly, talk of negative gearing is still just that. No clear parameters have been set by our politicians at this stage. No doubt as the election gets closer, more information will be forthcoming, but our approach has always been that of a cash flow approach. Negative gearing benefits can make a huge difference, but targeting an asset solely for negative gearing itself is ludicrous.

During March we enjoyed being involved in some exciting media stories, from API's Fork in the Road; where we weighed in with solutions for a real life scenario (with bonus notes), to a relevant Days on Market article. Amy and Cate both featured in one recent API article which touched upon the differences between units, from floor plans to locales to numbers in the block.

API Magazine's most recent article exercised Cate's ability to think on her feet when asked to recommend three areas she'd suggest for investors with three specific budgets. Pitched against two other Property Investment Advisers, the article shed light on some interesting locations investors could research within three specific budgets.

Cate had a proud moment when Domain interviewed her for their special edition International Women's Day feature. Featuring alongside some incredible professionals in the Real Estate Industry was particularly exciting.

Our articles on some of the investment property portals have been written to assist buyers with relevant challenges, topics and approaches. Off-market properties are a common topic and this article was penned to help buyers recognise the different approaches required when dealing with a sale which is not advertised to the open market.

Hefty expenses associated with investment properties can be mitigated when buyers conduct their due diligence and approach a purchase with care. Cate penned this article to shed light.

Amy's Smart Property Investment article on The Hidden Costs was a great eye-opener for those who think that property investment comes without risk. From development projects to quick-flips, Amy canvassed potential risks which need to be considered at the initial strategy phase.

And lastly, Cate's "Making the Most of your Open for Inspections" article was engineered to help buyers plan for their busy Saturdays. Often people assume that property inspections are a fun voyage which can be conducted on a whim, but without planning , their busy Saturdays are often downright confusing or fruitless.

Below we've featured three March purchases which we have proudly assisted some wonderful clients with.