Western Brisbane residents aren’t immune from the pressures of the 9th interest rate rise in three years despite living in some of its most affluent suburbs. There’s a perception out there that the housing affordability issue is confined to the city’s poorer pockets, but there are ‘struggle streets’ everywhere and the affluent west is no different. For every upwardly mobile family moving into the area, there is another grappling with an increasingly dwindling margin between income and mortgage repayments and that can’t be ignored. Indeed, I’ve met with a number of local families recently who are looking to downsize even though their family has actually expanded – they want to stay in the area but can’t afford the repayments on a large home. The fact is nine interest rate rises since 2004 has taken its toll and although wages have also gone up across the board, many families have unwittingly over-capitalised. It only takes a redundancy or forced change of circumstances to suddenly throw a financially functioning family into chaos. Data from the Queensland courts has shown that home repossession rates have skyrocketed in the last three years, with almost 800 homes having been relinquished this year already. While very few of these have been in the western suburbs, five of which – Pullenvale, Fig Tree Pocket, Chapel Hill, Moggill and Brookfield – are among Brisbane’s richest suburbs according to the last census, it would be foolish to think everyone out here is on easy street. My business – this industry’s business - is helping people find and purchase their dream home (and by extension sell their old home), and to see people being forced out of the market due to rising interest rates is distressing for everybody. There is no clear-cut solution to the current economic situation, but at least both sides of politics are talking about ways to ameliorate the pain for families. Let’s hope there’s some post-election action beyond the rhetoric! Until next week … Gerard Baden-Clay Principal, Century 21 Westside
Contractually speaking - 25th October, 2007
It was interesting to read solicitor Tim O’Dwyer’s comments last week about the apparently parlous state of contract preparation within the real estate industry, not least of all because they came almost four months after the rules relating to real estate contracts changed. Tim’s assertion, that agents who amend contracts on behalf of buyers and sellers are now effectively breaking the law, implies that somehow agents would have a vested interest in doing so; as though they might have something to gain by not doing everything to the letter of the law. This is plainly ridiculous. It also creates a picture of recklessness and insufficient training among real estate agents, when of course the reality is that contract preparation is a critical component of the modern real estate training curriculum – ultimately overseen by the legal profession through the conveyancing process. (In my business’s case, voluntary membership of the REIQ additionally entails commitment to ongoing Best Practice training and participation in the association’s comprehensive Continuing Professional Development Program – added reassurance for consumers that we really know our stuff.) Importantly the current system of contract preparation is a highly efficient one for buyers and sellers, ensuring their specific needs and points of negotiation are couched within the terms of their contract. It is also extremely cost-effective for consumers, ensuring their legal fees are limited only to essential conveyancing costs. The alternative, a system whereby lawyers prepare contracts from the outset, potentially riding roughshod over the nuances of consumers’ specific conditional requirements, would not only cost buyers and sellers thousands of extra dollars per contract, but it would also mean that they would still incur legal fees for those occasions when contracts fall over – as they inevitably do at times. Don’t get me wrong. I’m all for changes to the real estate industry that increase its capacity to deliver a highly professional and ultimately transparent service, but I fail to see how unnecessarily lining lawyers’ pockets with families’ hard-earned cash is good for anyone bar lawyers. Until next week … Gerard Baden-Clay Principal, Century 21 Westside
Hot property speaks volumes - 18th October, 2007
Sometimes a single house sale can say everything about what’s happening in a local market. This month’s sale of a rare sub-$500,000 property in Chapel Hill bared the teeth of a bullish first-home buyer/investor market, with multiple offers above the list price being received within hours of the first open-home inspection. The three-bedroom property in Cassandra Street, the sale of which went unconditional last week at $19,000 above the list price, attracted a record 52 groups of people through its doors within 45 minutes. Following that, another 28 groups inspected the property over the next week – 80 inspections in eight days … that’s heady stuff and it shows incredible interest in this price range. And that’s the key issue here – the price range. With the housing affordability issue dominating every barbecue conversation these days and both sides of politics hurling promised “solutions” at the populace, it’s very clear that first-home buyers simply want to get into the market on the ground floor and work their way up from there. They may have to pay a little more than they thought to get a foothold, but it’s a very solid foothold. Their additional investment will inevitably be recouped within a market displaying such high demand and residual value. It also demonstrates to people wondering whether or not to renovate their old home before selling that many buyers are happy to purchase unfinished real estate with future potential. In this case, the owners of Cassandra Street had done minimal work to the bones of a solid home, but the work that they had done was well-considered and smart. I’m thrilled that the owners have achieved such an excellent result. It’s given them the financial scope to achieve their next housing goal ahead of schedule while also giving another buyer entrée into a value-rich area. Until next week … Gerard Baden-Clay
Time to go Online - 11th October, 2007
Some things are inevitable, some are inspired, and some are both. Online auctions, the latest groundbreaking initiative of Century 21 nationally, falls into the third category. They’re hot, they’re happening and they’re coming to a suburb near you. Yes, online auctions could be held in Brisbane’s western suburbs as early as next month following recent successful trials in southern states. This month’s trials have not only proven the technological integrity of online auctions but also have demonstrated their widespread consumer support. I was recently asked to speak about this hot topic on Seven News, which prompted a number of next-day enquiries about when and how online auctions would be introduced locally. Clearly there is a view that this is very much the way of the future – a natural extension of other types of online bidding – and there is certainly some excitement that this medium of selling puts power back into the hands of home-buyers. Indeed the old days of pressure-cooker auction environments in auction rooms and on street sides are perhaps approaching an end. Online auctions enable interested parties to participate via live video streaming without the intervention of third parties and without the normal poker-face emotional game-playing that has historically gone part and parcel with the auction experience. For those people who have avoided auctions in the past due to the stress of the high-emotion, in-your-face setting, online auctions are very good news. For sellers, they also open up the possibility of international bidders being able to directly vie for a home, multiplying one’s buyer base exponentially. Century 21 has joined with PTY Auctions to develop the Microsoft-based software applications that power the online auctions – a cost to vendors of just $320 to place their auction online. Bidders are able to register online, bid and exchange contracts, place proxy bids and monitor more than one auction from different agents. I don’t think I’m understating things: it’s a brave new world and it’s very exciting. Until next week … Gerard Baden-Clay Principal, Century 21 Westside
Up the Garden Path - 4th October, 2007
It’s reprehensible, not only because it compromises the hard-won integrity of our modern industry but mainly because it potentially misleads people who are making extremely important decisions about property. I’m referring to the practice of “talking it up” – gushing over-the-top positivity about market movements for the sake of getting buyers and/or sellers roused into immediate action. It’s an old-school, pre-code of ethics attempt at market manipulation that, in spite of a more well-informed populace, is still practiced by a small percentage of agents who frankly should know better. Last week my office released a report to the media about an observed lull in local property activity – specifically a decline in stock levels – that we surmised may be attributable to pre-election jitters. This information was based not only on listing activity through our office but through all local offices – incontrovertible statistics available to everyone. I was therefore amused, and then just plain angry, to read commentary from another local agent saying that both buyers and sellers were currently pumping with adrenalin to secure deals before the upcoming election. The article was devoid of any statistics – necessarily so because they wouldn’t have added up – and seemingly designed to drum up local business by leading people to believe they would be remiss not to act in the current fever-pitch state of play. The simple fact is listings have been down for the past couple of months, although as I write this there is a sense that things are turning again with solid interest among first-home buyers prompting some downsizers to put their sub-$500,000 homes on the market. At the end of the day, however, most people buy and sell due to their own individual circumstances, not because a real estate agent tells them they should and now. It follows that we should be reporting how the market IS, not simply how we’d like it to be. Until next week … Gerard Baden-Clay Principal, Century 21 Westside
