SecretAgent - The inside scoop

The inside scoop

We've taken a few days off!

31/08/2010

A quick sunshine break before the Spring market really starts to kick into gear.

We will be back next Monday with the normal auction wrap.

Catch you then - Thanks for reading.

{snippert articles}

Auction Wrap

30/08/2010

Auction numbers increased this weekend, however this did not stop the clearance rate from remaining solid.

This weekend 687 auctions took place, of which 488 sold and 199 were passed in resulting in a clearance rate of 71%, this compared to the 72% achieved last weekend from 343 auctions.

A number of auctions that we attended over the weekend that were passed in were later sold, like 113 Millswyn Street, South Yarra which was passed in at $1,750,000 Vendor Bid after having no bids on the street. The property later sold for $1,825,000.

Next weekend around 600 auctions are scheduled to take place.

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Hovering

27/08/2010

Two very differently used tactics for negotiations can be stalling and striking.

Striking means seeing an opportunity and pouncing before anyone else has a chance. A very effective way to buy property in a good to solid market.

Stalling can work when you really aren't fused about the outcome. These can also yield good buying oppurtuities especially in achieving large price drops. Also this can be used when other interest is almost non existent.

Hovering is more of a concern. By being too unsure or being unable to make a decision - Hovering is what I see many entrants into the property market go through. Any advantage or control is quickly lost and the less control you have of the outcome.

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Investing in office space

26/08/2010

The real estate office sector is such a volatile investment market.

I've never really liked the office market. It's always unpredictable and believe me, I've seen so many people burnt by investing into this section.

The lure of strong returns tends to be the defining factor as to why people invest in the first place. An 8% yield is hard to resist for investors.

The two main problems are this:

1. When the office market is oversupplied, it's oversupplied. To have a vacancy period of 6 months is not unusual.

2. Reselling on just the return. When buying, you need to always think about selling. The problem is that by selling on return, you need to have an attractive return to sell (unless to an owner occupier) and to have an attractive return - the price needs to be lowered as a result. Emotion which so often comes into play on the residential market, is simply not there. The scarcity factor is also limited.

Office space also has different grades. A, B and C grade are the normal classifications. 'A' class office space will improve the situation for the investor.

Articles like this point to the strength and potential. My thoughts are to still stay away in most cases.

One defining point is that society and work are becoming much more mobile. Companies are finding in easier (thanks to technology) to outsource many jobs overseas, keep staff working from smaller spaces and workers can be mobile out and about with clients. Also many new companies are electing to start a business remotely to cut overheads and leverage technology.

I'm not sure whether much of the planned office space to come has been clearly thought through.

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Unusual weather patterns - my property tour last night

25/08/2010

Last night I was showing a few clients some property to purchase.

It was one of the heaviest downfalls I've had and it made a challenge of getting from one property to the next. Hail was belting the car and
the roads were super icy.

Admittedly, it was actually pretty fun. One aspect I like when inspecting property in these conditions is the ability to see bad design & faulty buildings.

These are the moments when houses get flooded and places get invaded by the elements. One property we looked at had almost a river of water flowing past it - luckily it was still out of reach from the place.

Some houses I went past last night clearly looked flooded and the angle of the land meant it was prime for flooding issues.

The section 32 normally includes a certificate indicating whether a property is in a high flooding zone or not. Whether you believe
climate change or not - floods do seem to be happening with more regularity and in locations normally not susceptible.

The house inspection on a volatile day should not be skipped. Seeing a property in an extreme situation gives you a rare insight into a
number of factors that you wouldn't see on an ordinary day.

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