June 2010

 Tax cuts for investors, Market takes a breather

Welcome to your June propertybuyer market update.

In this edition we will look at…

• Zero stamp duty for new property under $600k
• Hot Properties and clients stories
• Maximised Property Investment Seminar
• Rich’s sleepout on the street
• Inspiration Corner - Thoughts of the Month

1. Market update –By Rich Harvey

Since mid-May we have seen the property market take a breather. The winter months traditionally bring a slow down in the volume of transactions but there have also been a number of other factors slowing the pace of the property market apart from the colder weather.

Consumer confidence declined 7% in May according to the Westpac-Melbourne Institute. This decline in confidence is likely to be the result of the more volatile sharemarket and the economic uncertainty of European debt markets. At home, the cumulative interest rate rises have finally started to bite and the Reserve Bank has suggested that interest rates have now returned to more “normal” levels. It’s likely that interest rates will remain on hold for another 4 months.

The fact that property price rises are slowing is actually a good thing. Since the end of the GFC we have seen prices rebound quite quickly which is a reflection of the underlying supply shortage in most capital cities. What is interesting about this last surge in prices is that it has not been fuelled by expansive credit growth. The banks have tightened their lending criteria which has meant that those seeking loans have more hurdles to jump.

The property market is following a typical cycle of quick growth in the early stages of the cycle then slower growth during the remainder of the three to five year growth phase. John Edwards, from Residex said that: “Our markets are now slowing in a very orderly fashion and the risk of a "bubble" has abated.”

Investors are now making up an increasing proportion of buyers in the market. According to Australia Mortgage Finance Group figures, investors made up almost 37% of new mortgages, while those refinancing was 38%.

We are seeing strong demand for properties across most price ranges. Investors are seeking well positioned property in the $450k to $1m range. Upgraders are prevalent in the market up to around $2m. The prestige market is still sluggish in terms of the number of transactions, but there are good opportunities to be selective and pick up a well-priced luxury Sydney home.

The biggest news for the month was that stamp duty in NSW would be slashed to zero for all new properties bought off the plan from 1 July 2010. Over the next two years both home buyers and investors will have the opportunity to save up to $22,490 in stamp duty if they buy a property worth up to $600,000 in the pre-construction phase. The program is dubbed to the NSW Home Builders Bonus scheme. Seniors aged over 65 would also qualify for zero stamp duty if they sold their residence to buy a new property.

For properties that have already commenced construction the government will provide a 25% discount on stamp duty for properties valued up to $600,000 giving a potential saving of $5623.

I believe the incentive is a step in the right direction for bridging the serious supply gap in Sydney and should result in more transactions. However, there is likely to be a significant delay in the uptake of the offer as there is a major time lag between the announcement of the incentive and development approvals through local councils. This will mean supply remains low and demand high supporting prices for many years to come. Most developers have welcomed the incentive, saying it will encourage people to buy sooner but have made similar comments that there is a several year lag between development approval and properties being available for sale.

Let’s have a quick look at how each capital city is faring around Australia:

1. HOUSES

2. UNITS

In looking at the table above I have to issue a warning that past performance is no guarantee of future performance. You can’t go out and buy any property and hope for the best! You have to dig deep into the demographics, discover the undervalued suburbs, price drivers, scarcity value and find properties with potential to add value.

If you are considering buying and would like to get the upper hand with a professional buyers’ advocate representing just you (not the vendor), sourcing and negotiating the best opportunities throughout Sydney and Australia, then please call our team on +61 2 9975 3311 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it for an obligation free chat.
Click here to send us your property Wishlist…

2. Hot properties and client stories

We are continuously searching the Australian property market for great property investment deals. Below is just a selection that we have achieved for our clients recently.

To become a propertybuyer client and get access to these deals and many more just call or email your details and we will be in touch, Click here to send us your Wishlist…

Client stories of the month:

Buyer type: Home Buyer
Buyers brief: 3-4 bedroom home with a small backyard in Greenwich
Appraised Value: $1,100,000
Purchase price: $1,041,000
Saving: $59,000

Buyers’ agent comment – Matt Corbett:

Julianne and Sal were living in a large apartment in Greenwich and loved the area, but needed a backyard for their two children. They signed up for the ‘appraisal and negotiation only’ service on a semi which was a deceased estate, and therefore we had to go to auction. The price guide was $1m+ which was totally misleading, as I appraised the property up to $1.32m. I represented them at auction, but unfortunately someone else was willing to pay $1.35m, which was beyond my appraisal and their budget. They then asked me to negotiate on another property, which I appraised at $1.03m but the vendor wanted $1.15m which was ridiculous and after a further 3 months on the market, the vendor accepted $1.1m, which was $70,000 more than what I believed it was worth. After protecting my clients on these 2 properties, we finally secured a property pre-auction at a price well below my appraisal and they were both thrilled. I have no doubt that patience and perseverance saved them a considerable amount of money and from making a big mistake.

What our clients say - Julianne (Solicitor) and Sal (Financier):

“Whilst I believe that we would have eventually purchased a property in our desired area, on our own, I know in hindsight that it would have been with more stress and with a larger price tag without the help of Matt and Propertybuyer.

Prior to securing our property, Matt negotiated on our behalf on two other properties. Both properties eventually sold well above Matt’s valuation and we were honestly comfortable to walk away knowing we could get better value for money elsewhere.

During our third negotiation we were even more thankful to have Matt, given the vendor’s agent was very difficult to deal with and quite aggressive. Matt, however didn’t give an inch and still managed to maintain his professional demeanor which eventually resulted in us attaining the property prior to auction at a price below the valuation Matt provided and for a price less than we were willing to pay. The vendor’s agent actually complimented us on the way Matt dealt with the situation and said that he outperformed other buyer’s agents she had come across.

For all three negotiations, Matt was extremely efficient in organizing viewings, providing valuations and comparisons, arranging all pest and building inspections and speaking to agents and solicitors. He was always accessible, either via phone or face-to-face. His honest and composed manner not only cut our anxiety levels completely but secured a great property. I would recommend Matt and Propertybuyer to any buyer wanting to gain an advantage in a competitive property market.

After deciding to place our existing property on the market we jokingly told Matt that it would be good if he didn’t bring any of his clients through because we wanted to maximize our sale price!”

Buyer type: Investor - QLD
Buyers brief: High yielding property for superannuation fund
Appraised Value: $326,000 - 340,000
Purchase price: $310,000
Saving: $16,000 - 30,000

Buyers’ agent comment – David McElveney :
Philip reminded me of that old saying "nice guys sometimes finish first." Phillip came to us with limited ideas on what and where to buy. We sat down with him and developed an investment strategy that crystallised his thinking. We initially had offer and acceptance on a Sydney property but soon found a better option in QLD that we switched to and he was very happy with the result.

What our clients say
“Buying an investment property for the very first time is a very intimidating task, but with David from propertybuyer the task was made a lot less stressful. David's clear communication throughout the process gave us confidence and peace of mind. Although our budget was quite small, David made us feel just as important as those considering a million dollar purchase. If ever I am to buy another property, I will use propertybuyer and David as my buyers agent.”

3. maximised property investment seminar – Wed 28 July

You are warmly invited to propertybuyers’ next exciting seminar on how to maximise your returns from three essential parts to successful property investment:

1. Finance
2. Rent
3. Capital growth

• Have you ever wondered how to select investment property that will out-perform the general market? What features will most increase capital growth? How do I avoid dud areas and pick the winners?

• Would you like to discover five ways to make more rental income from your current investment property? Lean the strategies to increase rental income and have tenants that stay long term.

• Find out how to leverage your borrowing to a safe but effective level to maximise your returns. Discover which banks will lend more easily and how to frame your finance applications for fast approval. When should you pay LMI to maximise your gearing to 90% LVR?

Real life examples of successful investors and hot properties will be profiled on the night along with plenty of tips and strategies that will propel your property knowledge to the next level.
Three specialist speakers on each area will provide exceptional insights and the chance to have your questions answered.

Book now to reserve your seat. Click here….. http://www.stickytickets.com.au/3800

Date: Wed 28 July 2010

Time: 6.30pm to 8.30pm (6.00pm for registration)

Venue: Wesley Conference Centre, 220 Pitt Street Sydney: (The Lyceum Room)

Investment: Early bird discount (book before Friday 23 July): Single $37, Double $57
(Standard ticket price: Single $47 and Double $67)

Click here to book your ticket: http://www.stickytickets.com.au/3800

4. Rich slept out on the street - thanks for your support

Last Thursday I slept out at Sydney’s Luna Park along with over 180 CEO’s to help raise money for St Vincent De Paul to care for the homeless.

It was a cold clear night but I didn’t get much sleep with only three layers of cardboard for comfort between me and the pavement (but at least I had a warm feather down sleeping bag!) They gave us warm soup and bread roll for dinner and porridge for breakfast (to make the experience more authentic).

We heard some stories from people that through a series of unfortunate events (such as domestic violence, redundancy or loss of loved one) had found themselves without a home and were able to seek help through Vinnies Crisis care accommodation. People that fall into homeless come from all walks of life (its not the drunk with brown paper bag on the park bench of the drug addict) – they often come from middle class families that breakdown.

Thank you to all those generous supporters who contributed a total of $4515 – Your donations have been very gratefully received by Vinnies. If you would still like to make a donation please click on the link below (it will stay open until 30 August 2010). http://www.ceosleepout.org.au/location/ceoprofile.php?ceo=275

5. Inspiration corner

“You will either step forward into growth or you will step back into safety” Abraham Maslow

“Talent wins games, but teamwork and intelligence wins championships.” Michael Jordan

“The problem is not that there are problems. The problem is expecting otherwise and thinking that having a problem is a problem.” Theodore Rubin

[firstname], I hope you enjoyed your June market update and we look forward to keeping you informed in the next edition.

To get a professional buyers advocate on your side sourcing and negotiating the best opportunities throughout Sydney and Australia then please call +61 2 9975 3311 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it to find the easier way to buy property.

Warm regards

Rich Harvey
Managing Director
Tel: +61 2 9975 3311
www.propertybuyer.com.au

PS…. YOUR REFERRAL IS APPRECIATED
Your subscription to propertybuyer’s monthly market updates are absolutely FREE! As a return favour, please send this newsletter to someone you know that would also benefit from the information. The majority of our business comes via referrals, therefore I would really appreciate your help. Please forward this email to a friend or colleague, by pressing the “Forward” tab on your email program and suggest they subscribe.
Many thanks. Rich