http://blog.mcgrath.com.au en-us Wed, 30 Jun 2010 05:04:29 +1000 Wed, 30 Jun 2010 05:04:29 +1000 http://blogs.law.harvard.edu/tech/rss Weblog Editor 2.0 marketing@mcgrath.com.au (John McGrath) WebErrors@mcgrath.com.au (Johns Blog Admin) marketing@mcgrath.com.au (John McGrath) Wed, 30 Jun 2010 05:04:29 +1000 http://blog.mcgrath.com.au/blog/2/50/ http://blog.mcgrath.com.au/blog/2/50/ Article Key Points: Continuing strong price growth in major metro markets in Winter and Spring. No correction coming but slower pace of price growth inevitable in 2011. Main market strength is in inner city metro locations, many regional areas yet to fully recover. The seasonal influence of Winter provides a new opportunity in metro areas with demand subsiding. Upgraders are dominant but the proportion of investors in metro markets has increased substantially. Buying opportunities still available for first home buyers but they must do their research. Prestige market above $5M remains largely untested. We saw strong price growth in the first quarterof 2010 in most major cities and I predict this will continue through the Winter season. There's been some speculation that the property market will be impacted by rising interest rates, and while it's likely that price growth may slow by Christmas, we won't see any correction in values. Supply will remain low for several years so I believe we'll see ongoing annual price growth of around 6%-8% once this surge in prices subsides. We're at the beginning of a 3-5 year growth cycle and I believe buyers will look back and wish they had bought in 2010. Market Observations: Here are a few of my key observations and views on the current market. Clearance rates have been consistently high,around 70% nationally - as strong as I've seen them in many years. New listings are selling quickly as demand continues to markedly outstrip supply in most major cities, with the sub $2M price range particularly buoyant. Traditionally, Winter provides buyers a new opportunity as demand can temporarily subside and days on market can lengthen. I expect Spring 2010 will see a significant increase in economic and buyer confidence as the US recovery continues and Australia's best properties hit the market in our traditional peak season. While most analysts are saying buyer demand will drop off with each rate rise, many buyers in today's market have been actively looking for many months and don't want to miss out. Buyers remain confident that price growth will continue to rise over the next 12 months. I believe demand will remain extremely strong while home loans remain under 8%. However, buyers shouldn't get carried away and over-commit. Upgrader buyers are dominant in our major markets although new AFG* figures show almost 40% of loans drawn in April were to investors - the highest number AFG Mortgage Index has ever recorded. Broadly speaking, the $500,000 to $1.5M market is the strongest bracket and it's interesting to see investors at the upper end of this bracket instead of the traditional sub $500,000. There is still an opportunity for first home buyers to enter the market despite the recent rate rises. However they should factor in the possibility of further rises, even though I think they're close to their peak. There's still great buying available but I'd advise FHBs to do more research, be prudent and shop around for mortgages as well as properties to get the best package. The prestige market remains somewhat untested with most activity under $3M right now. We've seen a few outstanding sales above $5M but supply and activity is generally low. Increasing executive bonuses will create more demand and accompanying price growth will follow. For those buyers that have been holding off, I see the next 3-4 months will present some great value opportunities. • Rents are strong due to low supply and less buying activity among first home buyers. Rents are up 30% over the past few years in all major cities. There is a several-year lag between development approval and availability for sale, so this will keep new supply low and demand high for some time to come. • Canberra is booming with demand outstripping supply even in the apartment market, where we've seen a significant increase in stock. This can sometimes soften prices but not so in Canberra - for the first time in history, apartment sales now outnumber houses and prices are very strong. *Australia's largest mortgage aggregator marketing@mcgrath.com.au (John McGrath) Mon, 28 Jun 2010 12:00:00 +1000 http://blog.mcgrath.com.au/blog/4/49/ http://blog.mcgrath.com.au/blog/4/49/ Video Last week I chatted with Peter Switzer on the Sky Business Channel about the property market. I hope you enjoy the interview. For more information visit www.switzer.com.au. (Used with permission of Switzer Media + Publishing). marketing@mcgrath.com.au (John McGrath) Mon, 07 Jun 2010 12:00:00 +1000 http://blog.mcgrath.com.au/blog/2/48/ http://blog.mcgrath.com.au/blog/2/48/ Article I have been a fan of Sydney's Northern Beaches for a long time now. It's just a great part of Australia and I think it has always represented good value compared to nearby city beaches. Now with tele-commuting allowing people to work away from their CBD offices more often, it suggests to me the value gap will narrow in the near future. After all, the only possible reason anyone could have for not wanting to wake up and go for a swim at Avalon Beach before coffee and heading off to work is the hefty commute into the city. So it was with great interest last week when I met with a few of my team from our Collaroy and Avalon offices to hear them tell me of the great buying opportunities still available on the Northern Beaches. They cited several examples of homes that had been sold two years ago for $3M+ that had recently re-sold for about $2.4M. This equates to 20% - 30% discounts on a rough calculation. I suspect this is driven by the fact the market in the $2M-$4M range is a tad shaky because of the recent share market and that the Northern Beaches has yet to fully recover from the buffeting they took during the GFC. If you're thinking of a sea change or are cashed up and interested in a stunning weekender, I think you have about three months before the window of opportunity slams shut. Reasons? The share market will recover shortly (or so say the smartest guys in the room), the property market is well and truly rolling again in the city and surrounding areas (only a matter of short time before it creeps across the Spit Bridge) and beachside prices generally jump up a few percent when Spring comes around. So get your swimmers on (albeit, it's a tad cool outside at the moment!) and take a beautiful 30 minutes drive north to see what you can find before it's too late. marketing@mcgrath.com.au (John McGrath) Mon, 31 May 2010 12:00:00 +1000 http://blog.mcgrath.com.au/blog/2/47/ http://blog.mcgrath.com.au/blog/2/47/ Article I remember reading this somewhere… I think it was said by the famous sports coach in the USA, John Wooden. I believe what he means by this is that there's no time to waste but it's certainly not a time to rush. I'll assume so for this blog post anyway. That quote came to me when I was speaking to someone today about buying property. They were saying, in essence, that they had been looking to buy and weren't sure if this was the right time. The funny thing about buyers is that most want to buy when things are white hot, and they choose to wait when things cool, albeit temporarily. The smartest thing to do is the opposite, if you have the courage and opportunity to do so. Right now in our major Eastern cities (Sydney, Melbourne, ACT, etc) the market is having a short breather courtesy of a share market correction and a few interest rate rises. In a short space of time, the market will be on the roll again. How do I know this? I've been working in the Sydney real estate market for almost 30 years. Things tend to go in cycles. Patterns repeat themselves. Everything that looks expensive today looks cheap tomorrow. The same media headlines get recycled on a regular basis. So I'm confident that come Spring 2010 (120 days away) the market will start rolling again (if it hasn't already started beforehand). So I counselled the buyer on two key things. First, never rush a property purchase or over commit by spending more than you can afford. And second, don't wait too long because quality property is rarely left unattended especially in the big cities, where the shortage of prime property (in fact almost all property) has reached a critical point. If you are ready to buy, don't stop looking now because things have cooled down slightly, it's actually the best environment to go shopping in. The non-metro areas are a half step behind the cities but they too will enjoy a strong 2011 so again you only have about six months to get set before these markets rise. marketing@mcgrath.com.au (John McGrath) Wed, 05 May 2010 12:00:00 +1000 http://blog.mcgrath.com.au/blog/2/46/ http://blog.mcgrath.com.au/blog/2/46/ Article Australians have always loved renovating. During the property boom we saw a major surge in renovating as home buyers turned to run down homes for affordability and investors realised the opportunity to renovate enchanced the value of their investment. Today, the desire to add value to our own homes continues. There's definitely a group of buyers who want a ready-to-move-into property, but the many of us love the challenge of adding our own style. It can be great fun. If you're thinking of renovating, before you get started you need to consider four key factors. Talk to your council. Structural renovations may require a DA approval, so make your council the first port of call. Talk to Fair Trading. Ask your state's Office of Fair Trading about home warranty insurance. In NSW, renovations exceeding $12,000 must be insured. Your builder can organise this for you. Keep the documentation, especially if you're selling soon after the renovations are complete, and always use only licensed tradespeople. Don't over-capitalise. Don't spend more than you have to but don't skimp on the important stuff. It's a fine line so get some advice from as many experts as you can (further details on this below). Keep re-sale in mind. It's rare for today's home owners to spend their whole lives in one property. At some point you're likely to sell, so don't make renovation decisions that will reduce the value of your property (seek an agent's advice on this). My renovating tips for investors and owner-occupiers differ slightly. But for the purpose of this post I'll cover owner occupiers. It's your place When renovating your own home, you should definitely be guided by what you like but keep re-sale in the back of your mind. I'd strongly recommend talking to an architect about structural changes and an interior designer regarding the finer points. After that, talk to a local agent. Ask them to come to your property and give you their advice on what would add or reduce your home's value. A good agent will happily do this for you. Structural renovations If you're looking at structural renovations, I'd suggest making living, dining and kitchen areas open plan as this is the popular in today's marketplace. Creating a second living room will add a great deal of value and alfresco entertaining spaces are extremely important. If you have the room to build a nice big entertainers' deck, go for it. Gardens If you've got one, your backyard is one of your property's most important features. It should be a tranquil space with low maintenance plants and grassy space for the kids to play. If you're living in an apartment, create a balcony garden. Colours A neutral palette with soft coffee colours, beige, whites and off-whites will add a distinct contemporary feel to your home. They're great base colours and are always best when it comes to re-sale as they provide a modern blank canvas for buyers. Kitchens and bathrooms Kitchen and bathroom renovations will cost the most but add the greatest value to your property. The recent evolution of materials such as sinks, tapware, bathtubs and kitchen appliances has been incredible. Suddenly, 'label' kitchen appliances like Miele are becoming the norm, as are frameless glass showers and large designer bench-top sinks in bathrooms. And let's not forget the rise of the Caesarstone bench top. Have some fun with these rooms. You don't want to over-capitalise but high quality fixtures and fittings will definitely add style and will be appreciated by future buyers. Quick tips for the kitchen If you can afford the 'label' appliances, go for it Go for stainless steel appliances over white plastic CaesarStone bench tops and glass splashbacks look fantastic Maximise storage space - extend your cupboards to the ceiling etc Quick tips for the bathroom Look at ceramic tiles with marble or travertine effects - ceramic is the cheaper option but can often look just as good Use the money you saved on the tiles to buy some stylish tapware Go for a frameless glass shower and CaesarStone vanity Keep the bathtub separate - showers over baths are less desirable Maximise storage space You can learn a lot by watching TV shows on home renovations or reading home decorating magazines - there's hundreds to choose from! I've recently become involved in a show called Australian Renovations, the show and the website will really help to open your mind to some ideas, and maybe help you crystallise thoughts that are already in your own mind! Finally, good luck! marketing@mcgrath.com.au (John McGrath) Thu, 29 Apr 2010 12:00:00 +1000 http://blog.mcgrath.com.au/blog/4/42/ http://blog.mcgrath.com.au/blog/4/42/ Video Between Friday 30th April and Sunday 2nd May, a team of 10 riders from McGrath will be participating in the Entoure Cycle Classic, a 400km bike ride, to raise funds for Ron Delezio's Day of Difference Foundation. Please join me in wishing the team well. You can learn more or make a donation by visiting www.entoure.com.au marketing@mcgrath.com.au (John McGrath) Thu, 15 Apr 2010 12:00:00 +1000 http://blog.mcgrath.com.au/blog/4/41/ http://blog.mcgrath.com.au/blog/4/41/ Video On Monday evening I chatted with Peter Switzer on the Sky Business Channel about the property market. I hope you find the interview interesting. For more information visit http://switzer.com.au. (Used with permission of Switzer Media + Publishing). marketing@mcgrath.com.au (John McGrath) Thu, 08 Apr 2010 12:00:00 +1000 http://blog.mcgrath.com.au/blog/4/40/ http://blog.mcgrath.com.au/blog/4/40/ Video Watch my latest review on the property market & my insights for the quarter. marketing@mcgrath.com.au (John McGrath) Fri, 19 Feb 2010 12:00:00 +1000 http://blog.mcgrath.com.au/blog/4/39/ http://blog.mcgrath.com.au/blog/4/39/ Video We recently asked our team why they love working for McGrath and this is what they had to say... marketing@mcgrath.com.au (John McGrath) Tue, 16 Feb 2010 12:00:00 +1000 http://blog.mcgrath.com.au/blog/2/38/ http://blog.mcgrath.com.au/blog/2/38/ Article It's been a few weeks since my last blog post... so I thought I'd make up for lost time by sharing with you my top 10 hot suburbs for the year ahead. These are the areas that I think are either great buying opportunities or are set to fly in 2010. Overall, I expect the market in most parts of Australia to be up by 8%-10% by Christmas. There are a few simple factors that will drive this: The economy is coming out of a chilly winter and the mood is positive. Real estate values move with the sentiment as much as they do with things like interest rates There's been a severe shortage of new building developments and this won't change for several years - so the under-building situation is here for at least two more years Australia is the poster child for lifestyle and economy, and interest from overseas buyers is increasing - both expat and foreign investors More and more people are seeking to live in the same popular precincts - the inner circle of major CBDs and close to beaches and waterways - and there just ain't any more real estate in those places! So if you want to invest in real estate in and around Sydney in the near future, here are my top suburb suggestions for both houses and apartments. Houses: Balmain - one of Sydney's oldest and most popular harbour side inner city suburbs. Brighton-le-Sands - set for major growth. Situated on Botany Bay and only 15 min to CBD. Curl Curl - offers the lifestyle of Bondi Beach at about 30% lower price. Erskineville - adjoins popular Newtown. Only 9 mins to CBD and home to one of the best cafés in Sydney. Freshwater - used to be Harbord. Still just as beautiful and somewhat undiscovered. Haberfield - the Woollahra of the inner west. One of the truly great 'under the radar' suburbs of Sydney. Hunters Hill - World class peninsula suburb that was over sold during the GFC. Tremendous value today. Marrickville - feels like Paddington in the 70s. Buy here and double your money in the next 6 years. Northbridge - Like Hunters Hill, this suburb was discounted during the GFC and set for strong price growth in the next 12 months. North Parramatta - Bordering one of Sydney's fastest growing commercial precincts. Represents great affordable housing. Apartments: Balmain East - modern living with traditional Balmain charm. Camperdown - about to boom with the new brewery development ahead. Borders the CBD. Coogee - still one of the best beachside apartment suburbs on the east coast of Australia. Glebe - the unforgotten jewel in Sydney's inner city. Lane Cove - not just some of Sydney's finest houses, but best value apartments as well. Leichhardt - the Surry Hills of the inner west with the best spaghetti in Sydney! Manly - A short ferry ride to the city. Manly provides Sydneysiders one of the best lifestyles available. Neutral Bay - walk to the city. On the edge of the harbour. Need I say more? Pyrmont - terrific value for money in the closest suburb to the city. Ramsgate - if you can't afford the eastern suburbs or inner west, check out this bayside area. marketing@mcgrath.com.au (John McGrath) Thu, 11 Feb 2010 12:00:00 +1000 http://blog.mcgrath.com.au/blog/4/37/ http://blog.mcgrath.com.au/blog/4/37/ Video On Monday night I spoke with Peter Switzer on the Sky Business Channel. Peter was keen to hear what lies ahead for property this year, how the Sydney market has been performing and my tips for buying at auction. For more information visit http://switzer.com.au (used with permission of Switzer Media + Publishing). marketing@mcgrath.com.au (John McGrath) Tue, 12 Jan 2010 12:00:00 +1000 http://blog.mcgrath.com.au/blog/2/36/ http://blog.mcgrath.com.au/blog/2/36/ Article A recent survey from the Bureau of Statistics and RP Data confirms my predictions for market activity in 2010. Upgraders will remain the largest buyer group, along with an increase in investor and downsizer activity. The ABS Housing Mobility survey shows a massive 45% of Australian home owners feel their homes are too small. The survey was conducted when interest rates were twice today's levels and upgrading was not financially viable for many home owners, but with interest rates now significantly lower it's no wonder upgraders are active right now. So what do these buyers want? In addition to a bigger property, they also want a better quality property that is close to shops, cafes and transport and in a quieter location with better security. In previous posts, I've discussed the reasons why more investors will be in the marketplace next year. If you're going to be one of them, you better take note of these valuable insights into what tenants want. The survey revealed the main reasons tenants are unhappy with their current homes: poor condition, lack of security, noise levels, traffic levels and not being close enough to shops and transport. In addition, 25% complained their property was too cold. Based on this, I suggest investors consider the following when looking to buy in 2010: Good condition - if you buy an older style or run down house or apartment put some money into kitchen and bathroom renovations. You don't have to do anything too flash, just ensure these rooms are modern, neat and tidy with lots of storage space. Once you have a tenant, keep the property in good working order. Good security - put a deadlock and chain on the front door and key locks on the windows. Quiet street close to shops, cafes, transport - avoid properties on main roads, they're definitely convenient but noise and traffic are major issues for tenants. Look at leafy residential streets within a 10 minute level walk of shops, cafes and transport . North aspect - a perennial desire in real estate but not the be-all-and-end-all. Light and bright internal living spaces, balconies and backyards are the goal. A dark property is seriously depressing and they're iceboxes in winter. Don't go there - look for light! For maximum capital gains, try to buy within 15km of your state's capital city As this is my first post for 2010, I'll take this opportunity to wish you and your family a happy, safe and prosperous New Year. marketing@mcgrath.com.au (John McGrath) Fri, 27 Nov 2009 12:00:00 +1000 http://blog.mcgrath.com.au/blog/2/32/ http://blog.mcgrath.com.au/blog/2/32/ Article Hopefully by now we all have a sense of responsibility to act kindly towards our environment. Or better still, you've become passionate about it both personally and professionally, like I have. Even if you feel that some sectors may be exaggerating the current plight of the environment, it's hard to deny that if we don't do something decisive and fast now our Earth will be in trouble and our kids won't enjoy the same environment we had growing up. We try to make a difference by being eco-friendly in the way we do business, as we know the real estate and building industry has a huge impact on so many people. That's why I love seeing property developers (the same crowd that attract much criticism by so many communities - often rightly so by the way!) lead by example and build beautiful, green housing environments that look after our planet and their residents simultaneously. Check out this new development in leafy Lane Cove on Sydney's North Shore. It's one of the best examples I've come across when it comes to sustainable design and architecture (They're also very cool homes). The other trend I'm hearing in the US is that buyers are now flocking to green developments and voting with their wallets by paying substantially more for homes that are kinder to the environment than those that aren't. In fact, a friend of mine in San Francisco is currently rebuilding his own green home and told me that he estimates buyers are now paying 10% more for these types of homes. This may be a combination of the feel-good factor as well as the monetary savings that come with an energy efficient home. Go Green! marketing@mcgrath.com.au (John McGrath) Wed, 18 Nov 2009 12:00:00 +1000 http://blog.mcgrath.com.au/blog/2/35/ http://blog.mcgrath.com.au/blog/2/35/ Article Holiday homes became a luxury that many people couldn't afford during the peak of the GFC, with many forced to sell their retreats or investments due to major losses on the sharemarket. This resulted in an oversupply in Australia's major coastal markets and prices have softened significantly over the past year. We're now starting to see a turnaround due to rising confidence in the Australian economy but sales volumes are still well off the 10-year average, so it's still a buyers' market in these popular lifestyle and holiday areas. Here are some examples of softening prices in Australia's most desirable locations: Byron Bay in NSW - median house price now $608,630, down 7.5% Gosford in NSW - median house price now $406,081, down 5.9% Coffs Harbour in NSW - median house price now $347,068, down 3% The Gold Coast in QLD - median house price now $527,503, down 7.7% Sunshine Coast in QLD - median house price now $501,678, down 4.7% Cairns in QLD - median house price now $358,362, down 5.3% Augusta-Margaret River in WA - median house price now $556,026, down 13% Why not do some research, identify a few investment locations and spend your summer holidays there. In major markets you'll find that most agents work up to Christmas and return to the office fairly early in January so it should be easy to get some information and arrange a few property inspections. marketing@mcgrath.com.au (John McGrath) Wed, 04 Nov 2009 12:00:00 +1000 http://blog.mcgrath.com.au/blog/4/34/ http://blog.mcgrath.com.au/blog/4/34/ Video I recently had the pleasure of again talking with Peter Switzer on his TV show, Switzer, which appears on the Sky Business Channel. For more information visit switzer.com.au (used with permission of Switzer Media + Publishing). marketing@mcgrath.com.au (John McGrath) Mon, 19 Oct 2009 12:00:00 +1000 http://blog.mcgrath.com.au/blog/2/33/ http://blog.mcgrath.com.au/blog/2/33/ Article Earlier this week I posted a piece on the Top 20 Most Searched Suburbs on our website. I'm not surprised that 3 suburbs in the Top 10 were from Sydney's Inner West. If you're like me and appreciate cosy cafés, specialty deli's and bakeries, then you must take some time out to stroll the streets of Annandale or Balmain. On the weekend I was having a coffee at La Buena Mesa Café in Annandale and dropped in to view one of our listings nearby. For those of you who have ever driven down Johnston Street, you'd know it's hard to miss The Abbey, one of Sydney's most fascinating and historical houses. It's rare that I get to go through a property with such amazing architectural detail with a castle-like feel positioned just moments from the city. I love the way the view of Sydney harbour and the Anzac Bridge are contrasted with the historical look of this grand home. marketing@mcgrath.com.au (John McGrath) Tue, 13 Oct 2009 12:00:00 +1000 http://blog.mcgrath.com.au/blog/2/31/ http://blog.mcgrath.com.au/blog/2/31/ Article Imagine if you bought a few terraces in Paddington in the mid 70s? You'd have had amazing returns on your investment within the first 10 years and astronomical returns by now. So it's always a good idea when buying a property to ask yourself, where's the next Paddington? What areas and suburbs are likely to outperform the market? I think you can research this a few different ways. The first is what I call my Vespa tour. In essence, I get on my Vespa on a Sunday morning and ride around areas I think may fit the profile of the next Paddington. I find these by starting with areas I know are in hot demand right now (Annandale, Surry Hills, Manly, etc) and then find adjoining pockets, villages and suburbs that haven't quite hit the radar yet. I use Google Maps to help me spot a few of these but usually by jumping on the Vespa and spending a few hours and several cappuccinos later I have unearthed a few gems. I write about these areas from time to time on my blog. Another good indicator is to see where people are starting to concentrate on when it comes to online research. This tells you ahead of the curve where the weight of money is looking to house itself, literally. So I've compiled a list below of the Top 20 Most Searched Suburbs on our web site over the past 90 days. Check them out & see what you can spot. HUNTERS HILL LANE COVE PADDINGTON LEICHHARDT CREMORNE MANLY NEUTRAL BAY ANNANDALE TERRIGAL ROZELLE SURRY HILLS RANDWICK KILLARA COOGEE GLADESVILLE MARRICKVILLE MOSMAN NAREMBURN BONDI BEACH ARTARMON marketing@mcgrath.com.au (John McGrath) Thu, 01 Oct 2009 12:00:00 +1000 http://blog.mcgrath.com.au/blog/4/30/ http://blog.mcgrath.com.au/blog/4/30/ Video Each quarter I'll be posting a video of my thoughts and some key insights regarding the current property market. marketing@mcgrath.com.au (John McGrath) Mon, 28 Sep 2009 12:00:00 +1000 http://blog.mcgrath.com.au/blog/2/29/ http://blog.mcgrath.com.au/blog/2/29/ Article This is very cool. When space is at a premium but you still want to house your wine collection, think about this amazing design. I'm not sure of the cost and you'd probably need to be a real connoisseur to justify the investment but it looks cool and it would certainly set your home apart from the competition come time to sell! marketing@mcgrath.com.au (John McGrath) Mon, 14 Sep 2009 12:00:00 +1000 http://blog.mcgrath.com.au/blog/2/28/ http://blog.mcgrath.com.au/blog/2/28/ Article One of the most interesting assignments for me is when I get the opportunity to sell homes of great designers and architects. I've been fortunate over the years to sell a good number of these and it's not only great that you get to see cool homes, but you also get to know them well as a person (this is the greatest payoff in real estate for me by far). It's helped me improve my understanding of architecture and see inside the minds of some of the country's top designers, which has also helped my business. We're just about to start selling the home of one of Australia's greatest architects, Alex Popov. I met Alex about a year ago when we started working on a development in Randwick together. I didn't know what to expect before I met Alex but I've found him to be very generous, warm and engaging. We're selling Alex and Alison's terrace which, as you can imagine, is very cool and only a few minutes from the city on the edge of a huge park. They're moving to a custom-designed penthouse within Trio Apartments in Camperdown.