COMMENTS ON ARTICLE BY TERRY RYDER

COMMENTS ON ARTICLE BY TERRY RYDER

IN THE WEEKEND AUSTRALIAN 9.07.11

In Terry Ryder’s article he shares some of the abusive mail he receives and works his way around to his concerns about “the level of misinformation about property”.

In this we are in complete agreement.

He goes on to say “In my 30 years as a researcher and writer on Australian real estate I’ve never seen a time with so many myths and misconceptions masquerading as research and analysis”.

The points he outlines next we are in total agreement about;

“We don’t have a price bubble.

Our property values will not collapse.

We don’t have a chronic housing shortage crisis.

The great Australian dream is far from dead.

Negative gearing is not causing price inflation.

The inner city suburbs do not provide superior growth.”

I have some thoughts of my own as to where some of the myths originate.

For example take the idiot who recently went into print claiming that Australian house prices were 40% overvalued and using the U.S.A as his basis for the claim.

He seems to be unaware that many mortgages in the U.S.A. allow owners to simply return the keys to their lending institution and walk away with no more commitment. At one stage so many owners were posting their keys back to the bank, it gave rise to the term “jingle mail”.

He also ignored the fact that we have a highly regulated banking system.

When Mr Ryder and I were younger we used to have forecasters, but back then they had to at least show you their crystal ball and call themselves Madam Zara or some such so at least you had some idea they were simply showmen.

My suggestion to save you from falling for these forecasters is this. Ask them to show you where they forecast the GFC, the political assassination of our previous Prime Minister, the hung parliament or even the carbon tax.

Then weigh up the value of their foretelling of the future.

As most of the soothsayers are economists who are never held accountable (only a year ago they forecast 4 interest rate rises of which we have had one) it pays to remember the old definition of an economist as someone who has forecast 28 of the last 3 recessions.

Ross Cutten

Owner / Director

Noble Real Estate

HOW CAN YOU TRULY COMPARE?

HOW CAN YOU TRULY COMPARE?

When you are just about to sell your property you must get valid comparisons.

To do this it is not enough just to compare what is happening to property in the Rockingham District.

You need to know about your suburb.

For example, according to REIWA the number of sales in the Rockingham District were down 16% between the December and March quarters.

But within that average the number of sales in Safety Bay increased by 37% while those in Shoalwater went down by 40%.

There still remains only three factors which affect your chances of selling.

1.      Presentation

2.      Promotion (Advetising)

3.      Price

If the first two are right and the property isn’t selling, the answer lies with the price.

Ross Cutten

Owner / Director

Noble Real Estate

IS THIS A GOOD TIME TO BUY ?

IS THIS A GOOD TIME TO BUY ?

People constantly ask “Is this a good time to buy?”

My answer will also cover the question “Is this a good time to sell?”

This is one of the easiest questions I ever have to answer in real estate.

The simple answer is “Look at what everybody else is doing and do the reverse”.

Is everybody selling like today?

Then it is a brilliant time to buy.

For the sellers the question is “Is everybody buying?”

Today the answer is no. Everybody is selling.

So the answer is, If you can stay out of the current market, then do so.

“How long will we have to wait?’’

I am too old and smart to get involved in predicting the future even though it is currently fashionable to do so.

All I can say is that in 27 years I have never seen a market stay down as long as the current one, so the pressure must be building.

Ross Cutten

Owner / Director

Noble Real Estate

SELLER BEWARE!

SELLER BEWARE!

Following our commitment to NO BULL real estate here is some practices you need to be aware of in the local real estate industry.

1.      Beware of agents asking for you to pay advertising. Why? Consider the fact that one of my sellers (80 years of age) was asked to pay $1,000 up front followed by a further $500. She was refunded $125 when the property failed to sell. The same agency will list properties for sale without charging for advertising. It depends on the willingness or innocence of the seller.

2.      One of our local agencies uses the for sale sign on your property to sell their services. Shouldn’t the for sale sign be about selling your property?

(Please insert a photo of ours here).

3.      You need to know which websites your property will be listed on. The fact that you are as one of the cheapest agents in town promotes “on the worldwide web” is not enough. You must be on the two sites with the most visitors. They are....

realestate.com.au       and        reiwa.com.au

4.      You must have a member of the Real Estate Institute of W.A. Why? Because it is a precondition of membership of the institute that members have Professional Indemnity Insurance. This is there for your protection.

5.      You need to have advertising in BOTH the local paper and both the West Australian and the Sunday Times. It is true that the newspapers are losing ground but they are still a good source of buyer enquiry because not everyone is on the web and only 60% of buyers live locally.

Make sure your agent ticks all these boxes as we have too many sellers and too few buyers in the current market for you to risk not covering all bases.

Ross Cutten

Owner / Director

Noble Real Estate

THE CRAZY MARKETPLACE OF MARCH / APRIL 2011

THE CRAZY MARKETPLACE OF MARCH / APRIL 2011

Wherever people realise I am in real estate these days, they immediately want to know “How’s the Real Estate market”.

This is usually asked in the hushed tones normally heard before the start of The Death March.

I am currently telling them;

We had a good month in March and an exceptional start to April, in fact we sold 15% more in the first 14 days of April than in the whole of March, which as i said was a good month.

People are looking for signs of a turnaround, as confidence is low everywhere according to the popular press.

After 27 years in the business I need to see 3 months of consistent change before I will say it is a trend.

We have already had November, December and the first week of January look like a long term change only to go quiet.

The only thing I can predict with certainty is that sellers will pick up the trend before buyers and they then become less negotiable.

That is why it is important that buyers buy prior to the trend change, to buy at the best possible price.

Ross Cutten

Owner / Director

Noble Real Estate

IS THIS THE EARLY SIGNS OF A TURNAROUND?

IS THIS THE EARLY SIGNS OF A TURNAROUND?

Just when it appeared some investors were returning to the market, the Reserve Bank decided to raise interest rates today.

The last 3 properties we manage for rent which we have listed for sales have been sold to investors.

Each property had rental returns showing around 5% gross return but could not have been more different.

One was a 3 bed home, renovated about 12 months ago in the slowest selling suburb in the Rockingham area, another was a 2 bed old fashioned unloved duplex with common walls in what is traditionally our second most popular and upmarket seaside suburb, while the third was a 4 bed 1 bath in the lowest land value suburb locally.

The only negative is each of these homes sold for less than $300,000, confirming yet again Rockingham’s position as the lowest priced area in Australia within an hour’s drive of a capital city.

Ross Cutten
Owner/Director
Noble Real Estate

THE TRUTH ABOUT AUCTIONS

THE TRUTH ABOUT AUCTIONS

Is your agent suggesting you should auction your property?
Here are some facts about auctions in Western Australia.

According to RP Data 5817 properties were listed for sale in W.A. in July.
The average auction period is 4-5 weeks.
The number of properties sold at auction in August was 81 which shows two things;
Auctions represented only 1.4% of all properties listed for sale in July.
Only 31% (or 0.43%) of all properties which were listed sold at auction.
When encouraging sellers to list their property for auction, salespeople often include as successes those properties which sell after auction.
My suggestion is those properties would have sold by private treaty and may well have sold sooner.
Beware of members of Eastern States Franchises pushing auction.
When the W.A. franchise we belonged to took over our group, they claimed West Australians were no different from the rest of Australia and they were determined to turn us into an auction state.
The above figures tell me 17 years later they didn’t know what they were talking about!
At the time I asked “If we are the same as the Eastern States, why do we still build in double brick a century after they started building in brick veneer”?
So, if your sales representative is pushing auction ask “Why?”
If you want to know the real reason they recommend auction or know the secrets of which properties to auction and what the one key factor you need on auction day is, ask Ross Cutten a lapsed licensed auctioneer with 25 years experience selling homes in the Rockingham District on 041 9944 029.

Ross Cutten
Owner/Director
Noble Real Estate