Election Outcome Spurs On Clearance Rates

By Peter Sarmas on 10 Jul 2016
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Melbourne Auction Results 10th of July 2016

77%
Clearance
Rate

469
Reported
Auctions

Sold at Auction: 362    
Passed in: 107  

 

Sold Before: 71    
Sold After: 0    
     

 

 

Source:REIV

 

A clearance rate of 77 per cent was recorded this weekend compared to 70 per cent last weekend and 74 per cent this weekend last year. There were 469 auctions reported to the REIV, with 362 selling and 107 being passed in, 48 of those on a vendor bid.

Caulfield North recorded the highest clearance rate in Melbourne in June (100 per cent), followed by Greensborough with a clearance rate of 95 per cent.

Election Outcome Spurs On Clearance Rates

It looks like the Coalition party has all but won the all-important 76 seats required to govern Australia. Independents like Bob Katter, Cathy McGowan and Nick Xenophon have voiced their support and given confidence that supply and Bills will passed in parliament should their vote be required. Bill Shorten has conceded defeat and congratulated Malcolm Turnbull.

All this is very important in what’s been a disaster for the Liberals. The call for an early election by Prime Minister Malcolm Turnbull was to gain a greater control of Parliament, unfortunately this backfired with Labor gaining more seats and weakening the Liberal’s position.

But what does all this mean for real estate and did we just get a taste over the weekend of what’s to come?

There may have been a sigh of relief for investors more so than first time buyers as the threat of removing negative gearing and increasing capital gains tax on established investment was quashed with Turnbull’s re-election.

Clearance rates spiked over the weekend to 77% from 464 repoorted sales. This is significantly higher on a recent trend (73%) and up from last year last year’s 74% for the same time. Whether this new higher clearance rate will become the new norm is yet to be seen but we can say stability and buyer confidence seems to have returned, based on recent discussions with agents.

 

shutterstock_Property_Tax

Source: Shuttesrstock

A Concern for Future Generations

Over the weekend I watched with interest the latest Four Corners program discussing the challenges facing many Australian businbesses and our workforce, basically we are being globabilsed.

What rang loud and clear is that a large percentage of our current jobs (including real estate agents) is under threat and will be lost over the next 30 years due to the rise of technological dissruption and globabilsation. What was interesting and very concerning that i believe will impact property is the casualisation of our employment.

A number of young people are already struggling to find full time employment as big business can now outsource or “top up” their full time workforce with a number of casual or part time staff at the ready. Baby Boomers looking to supplement their retirment are happily filling these roles. 

How will this affect the ownership of property? It’s already happening. Affordability is at an all-time low at a time when interest rates for home-owners are below 4%. The cost of living is growing at a rapid rate and jobs are becoming centralised in Australia’s two major cities, Melbourne and Sydney

I have been in real estate for over 20 years and have never seen a situation so dire, generations are on the brink of being locked out of home ownership forever and something needs to be done!

To give you an idea of how hard it is to buy today consider a property worth $500,000 which by the way is well under Melbourne’s median price.

A first home buyer will need about $100,000 at an LVR of 90% including stamp duty and LMI (lenders mortgage insurance). That’s alot of money!

As far as repayments?

4% on a balance of $450,000 is about $18,000 per year, this is interest only and after tax, so not easy!

 

The New Option of Home Ownership

Australia’s changing landscape with affordability, job security and the cost of buying a new home has meant first home buyers need to reinvent the way they live and  finance their property purchases.

Here are some of the new options and changes we are seeing in the market:

Rentvest – where buyers are choosing to buy an investment property and live at home or rent (usually sharing).

Bank of Mum and Dad – Using mum and dad as security to enter the property market.

Sharing the Purchase – Siblings or friends pooling their funds and borrowing capacity to buy an investment property or home to live in.

Tree Change – Young families leaving the big cities and moving to more affordable regional towns.

Apartment Living – Families choosing to buy apartments rather than homes to live closer or in their preferred suburb.

Multi Generational Living – Nearly 1 in 5 Australians live in a household with two or more generations over 18.

Property ownership as we know it is slipping through the fingers of many would be buyers.

Many of the above options won’t suit many first time buyers so home ownership will become the forgotten Australian dream.

 

What our Clients Are Saying?

We found Peter Sarmas from Street Advocate took the hassle out of finding the right agent to sell our property and ensured a maximum result. By using Peter and his company we avoided the need to come up to speed on the most effective way to sell our property, as Peter has many years of experience to leverage on.

Not only did Peter find the best agent and negotiate a great commission rate for us, his fee was included in this negotiated fee! He kept up to date weekly with all the details, allowing us to focus on other things. We got a fantastic outcome, $130k above the reserve price. For us using Peter again would be a no-brainer.

Karl and Henty Punt, 118 Bridge St, Eltham

Thinking of buying or selling a home?

Visit our Street Advocate website or send an enquiry below or just call

Peter Sarmas on 0418 740 606.

 

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About the Author

Peter Sarmas is a Certified Property Investment Advisor (PIAA) and Vendor/Buyer Advocate. Before becoming the founder of Street News, Peter completed a Degree in Applied Science (Chemistry) and a Graduate Diploma in Property Valuations (Hons). Peter believes property investing is a major and potentially risky undertaking. In his view, everyone should have an independent person acting on their behalf when seeking property investment advice.

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