The Domain House Price Report for December 2018 has provided a list of the suburbs which had previously seen median home prices above $1 million dollars, which can no longer claim as such.
In early 2018, the number of million-dollar suburbs was on the increase – last February saw 13 new suburbs cross this immense threshold, bringing the total count to 143 such suburbs. However, recent data shows that as of December 2018, 16 suburbs have fallen from the illustrious list.
The full list of these suburbs, their new median prices and total percentage decrease across the year, are as follows:
While property owners in this region will be unhappy with this news, Director of Nelson Alexander Flemington, Paul Harrison, pointed out to Domain that this is having, and will continue to have, a positive impact on the Melbourne and Australian markets at large.
Labelling these price dips as a “correction,” Mr Harrison said that buyer interest had piqued in January of 2019 as a result of these lower prices. “It was like everyone decided to forget 2018 and wait until 2019.”
While Melbourne’s prices drop and buyer interest flicks upwards, it is a very different story among the nation’s smaller markets. Perth is seeing surges in home value and sales activity throughout many regions. Meanwhile, Tasmania is seeing a slowdown of the real estate surge it enjoyed throughout late 2018, with contention as to the cause. Common to all of these stories is an upwards slant, albeit one that is slowing for some and just beginning for others.
All momentum could soon be subject to a strong disruption, however, with the final report of the banking royal commission to be released later today. The recommendations of the report on banking lending practices could determine much of 2019’s ebbs and flows.
While many property videos feature cringe-worthy appearances by agents trying to self-promote on a vendor’s dime, some videos do generate exceptional results. And from what we can gather, it’s all about content.
YouTube & Facebook have improved the quality of data that can be collected from a video, giving back information on how engaged the viewer was, where they stopped watching and what they did after watching.
This data, alongside every social media platform’s mission to push video content further than links or pictures, is the driving force behind video’s push to be the dominant form of advertising in the real estate landscape.
We’ve collected a list of sample videos including the good, the bad and the downright cringe-worthy, all in the name of learning (and a bit of a laugh), to learn more about what content makes a video work.
A Little Bit Of High Energy Fun
Plum Property – 80 Warburton Street, Bardon
Plum Property is an online name synonymous with property videos; high quality productions, entertaining content and no stuffy sales pitch.
80 Warburton Street is the property video with the highest view-count on the agencies YouTube channel – but be sure to check out all the others.
“Now Here’s The Deal”
Whitefox Real Estate – 33 CRIMEA STREET, ST KILDA
“Now Here’s The Deal” – That now famous catchcry of the boutique brand that has exploded onto the Melbourne real estate scene almost overnight.
Star Power To The Rescue
Realestate.com.au TV Commercial
Real estate behemoth REA Group racked up nearly 1m hits on this video featuring Arnie back in 2014 – almost double their next highest viewed video on the channel.
Arnie was brought in to bring a little star power to the media giant’s TV advertising campaign, focusing around their editorial content.
Quick, Fast, Edgy & Throw In Some Cartoons For Good Measure
How Smart is a CENTURY 21 Agent?
Century 21’s cheeky 2014 tv commercial was aimed at providing “a fresh new approach and talent.”
The agency produced 2 x 30 second and 2 x 15 second adverts for screening on air that year based on the “How smart is a Century 21 Agent?” campaign.
Yes, “Zold” Makes It To This List… But Here’s Why
10 Pleasant View Crescent, Wheelers Hill
Love him or hate him, Zed Nasheet has had brilliant success in delivering high-impact video marketing campaigns, mostly through stepping out of the “norm” and heavily promoting his own brand and style of sales.
Whilst his style definitely has it’s haters, his videos attract tens of thousands of views and his success as an agent speaks for itself.
Below is a property video including a full entourage of backup dancers, lamborghinis and an original song. While we don’t LOVE the video, it DID rack up 33,000 views on YouTube alone…
If The House Isn’t That Impressive, Just Show The Garage
Sotherby’s International – “Modern Hideaway” in Bellevue
The production quality of this next video is actually quite poor, however it didn’t reach 1 million views for nothing!
The producers of the video knew the best feature of this home was it’s garage, or rather, the cars in the garage. 91 seconds of the total 120 second video is focused on a car or the garage, then we get a peek at a lounge, a bedroom and then the lounge again.
Still, if it looks stupid, but it works, ain’t stupid!
Cringe-Worthy Songs Seem To Work Actually…
Xsell Property – 8 Leane Ave Ridgehaven
We couldn’t get all the way through this video, but it is Andrew Kyriacou of Xsell Property’s highest viewed video.
The Adelaide agent has made headlines for his approach to selling homes, and his agency loves pushing the boundary with everything they do.
(Oh, if you ever try doing something a bit different, don’t read the comments section of YouTube… It gets nasty)
Cottesloe, Gwelup and Bicton among most promising Perth suburbs
Stirling is Australia’s second-strongest government area for growth markets
These increases are built from a low base, following a drop post-resources boom
In the wake of widespread downturn throughout Australia’s larger markets – Melbourne’s recent figures particularly bleak – Perth’s suburbs have been singled out by a recent index as leading the charge of a national real estate recovery.
The 2019 Price Predictor Index is put together by analyst Terry Ryder and available through his Hotspotting site – basing its predictions on quarterly sales trends, Mr Ryder has indexed Australian suburbs leading the way in the real estate recovery.
Mr Ryder’s Perth suburbs to keep an eye on throughout 2019, and their corresponding median price values, are as follows:
Greenfields at $270,000
Bassendean at $483,750
Spearwood at $470,000
Joondalup at $502,500
Gwelup at $818,000
And among the state’s most affluent regions:
Bicton at $1,057,500
Cottesloe at $2,125,000
Each of these Perth suburbs are seeing increases in demand and value, likely to continue throughout 2019.
“Perth is moving into a recovery phase and we are seeing a lot of suburbs with rising sales activity, albeit from a low base,” Mr Ryder said.
“Nevertheless, the pattern over the last 12 months for many suburbs has been up, and the Perth market is now the strongest we’ve seen since the end of the resources investment boom.”
Echoes of the resources boom
This low base is especially evident when comparing median suburb prices since the resources investment boom. Port Hedland is a vivid example, with median prices at over $1 million during the peak of the boom, dipping to less than $350,000 a year ago. Despite this diminutive base, Port Hedland also exemplifies the increase, median prices now up by 12% at $385,000.
Taking a look at Western Australia’s market through a broader lens, municipalities are also performing well among their interstate peers. My Ryder points out that the area of Stirling is the second-strongest municipality in Australia for growth markets, with the strongest being Port Adelaide-Enfield.
My Ryder states that, “We have often commented in this report that the municipality of Stirling has stood out for ‘sterling performance’ in the face of the Perth downturn — and its status has grown.”
Similarly, the government area of Melville is among the top ten Australian municipalities for sales growth.
Smaller markets have contributed much to the real estate market of late, Tasmania also credited with increasing real estate figures, albeit hindered somewhat by alleged ill-advised council decisions.
Seemingly unhindered by such problems, Western Australia appears to be on a steady upwards march – lending Australia momentum, as the nation struggles to recover from widespread downturn.
In the final three months – 9% dip across greater Hobart, 23% drop in inner-city sales
80% of Tasmanian sales went to Tasmanian buyers, only 2% foreign
Tasmania was host to record property sales throughout 2018, with data from the Real Estate Institute of Tasmania showing 11,400 property transactions took place, valued at roughly $4 billion.
A late-year slowdown
However, despite these figures, a slowdown was observable in the latter stages of 2018, with a 9% dip across greater Hobart and a 23% drop in inner-city sales – in statements appearing on ABC News, President of REIT Tony Collidge lays the blame of this slowdown, and the onus of reinvigorating the Tasmanian surge, on the Hobart City Council.
Stock, says Mr Collidge, has dried up, due to new projects being rejected by the Council for ‘spurious’ reasons.
“If councillors decide they don’t want a project in a particular area — even if it complies with the planning scheme — they can reject it and that is totally wrong,” he said.
“There is no clear guidance on height or rules and regulations that govern building in the inner city. The Sunshine Coast has the strictest green planning scheme in Australia, yet it’s easier to build property there than here.”
Contesting these claims is Hobart Lord Mayor Anna Reynolds, stating that the majority of projects are approved without involvement of the Council. The projects they are concerned with are those that attract complaints or test the limits of the planning scheme, rejections only eventuating with good reason.
Looking over the past few years, Ms Reynolds describes 562 multiple-dwelling projects constructed or under construction, a further 148 approved, and only 134 rejected.
A strong, self-sustaining market
Regardless of the cause of this slowdown, it comes at the tail-end of an exceptional year for Tasmania. As noted in a recent report, amid declining larger markets – Melbourne in particular observing a 22% drop throughout 2018 – Tasmania and other states saw increases, buoying the larger economy.
Furthermore, throughout the year, Tasmania saw 181 properties sold for over $1 million – only 33 of these from interstate. 80% of all Tasmanian properties sold in 2018 went to Tasmanian buyers.
Additionally, despite the pervasive fear of outside interest threatening the prospects of Australians in the real estate market, foreign investors represented only 2% of buyers.
“Tasmanians have always been the dominant factor in our market,” said Mr Collidge. “And out of the 20 per cent that went to mainland purchasers, two thirds are people buying to live here. Investors from the mainland only account for 7 per cent to 8 per cent of total sales.”
By maintaining its internal interest – and, depending on who you speak to, increasing stock by alleviating ‘spurious’ project rejections – Tasmania could return to robust form in 2019.
Recent data released by CoreLogic puts into tangible terms the significant downturn faced by one of Australia’s largest markets – over the course of 2018, the clearance rate of Melbourne fell by 22%.
Last week, a realestate.com.au report acknowledged the existence of a real estate downturn, but labelled it overblown, suggesting that while some of the country’s larger markets are faltering, consistency among smaller markets is lending brighter hues to the larger picture.
Overly quick predictions and inaccurate figures were labelled as the cause for the exaggeration of the downturn – however, CoreLogic’s recent figures cannot be labelled as such. An undeniable and significant downturn is observable, between the 68.1% clearance rate recorded throughout the final three months of 2017, and the 45.8% rate recorded in 2018’s final three months.
Realestate.com.au report that several big names in real estate have offered explanations for this downturn, ascribing the dip to buyers’ relationships with banks, financial approval proving increasingly time-consuming and fickle.
Australian head of real estate Geoff White and Mortgage Choice chief executive Susan Mitchell each point to the discrepancy between the duration of auction campaigns and home loan assessment periods. Where agents’ campaigns typically last roughly four weeks, the time taken for bank approval, which was previously 10-12 business days, often cannot be completed before auction.
To explain these expanding timelines, Ms Mitchell points to recent increases in the tightness of money-lending.
“According to our network of brokers in Melbourne, the tightened lending environment that developed throughout 2018, and is likely to persist in 2019, has meant that the timeline for loan pre-approvals has lengthened.”
In assessing and confirming factors such as living expenses, Ms Mitchell says, “It is not a matter of providing a ‘guess’ or ‘estimate’ when applying for a home loan; it needs to be factual and exact.”
In an unconditional auction, where a contract of sale is immediate and binding, buyers are reportedly increasingly wary of the bank changing its mind.
The figures resulting from these cautious banks and wary buyers make clear the severity of the slump in Australia’s largest market – also emphasising the resilience of smaller markets, which buoyed the national economy.
Inaccurate figures and hasty predictions exaggerated the downturn
In 2018, Sydney’s market fell by 1.48%, Melbourne by 5.93%
Adelaide saw a property price increase of 1.1%
A recent report from realestate.com.au has reflected on the downturn seen throughout 2018, continuing to tug on the market in 2019’s early stages, surmising that Australia is “now in the midst of a housing downturn,” but labelling this slump as “not as bad as widely reported.”
The report attributes this exaggeration to inaccurate figures and overly hasty predictions. According to realestate.com.au, Sydney saw a downturn of 1.48%, while Melbourne dropped by 5.93%, these figures lower than those reported elsewhere.
Throughout 2018, a significant downturn could be observed throughout Australia’s real estate market, particularly in its larger markets – New South Wales and Victoria struggled to creep above 50% clearance rates each week.
Other states exhibited more stability, South Australia in particular often achieving clearance rates in the 60s and 70s range – though larger markets are frequently host to over 1000 scheduled auctions in a week, South Australia often seeing 100 to 150, SA in nonetheless a consistent performer among the country’s middling markets.
Indeed, realestate.com.au ascribes to Adelaide a 1.1% increase in property prices for the past year.
Canberra, Hobart and Brisbane are also reported to be increasing. The ACT kept pace with South Australia for much of 2018, though in the last few months of the year, clearance rates for the territory slumped somewhat, often resting in the 40s.
Tasmania and Queensland, as they appeared in realestate.com.au’s weekly auction results throughout 2018, were fluctuating markets – a small sample size of recorded auction results led to clearance rate that leapt up and down.
However, this report confirms that amid these erratic figures, a general upturn did take place.
Looking to 2019, the report predicts continued but restrained downturn in Sydney and Melbourne – downturn which should be largely abated by consistency in other regions, as in 2018.
With a banking royal commission taking place and a Federal election incoming, the latter half of the year holds uncertainty for all markets, rising and falling, large and small.
According to data from Digital Finance Analytics the Bank of Mum & Dad sector has grown to amass $20 billion dollars worth of completely unregulated loans.
The portfolio is so large, the parental lending sector has a portfolio larger than AMP, HSBC, Heritage Bank & Citi Group.
$20 Billion Dollars – Parents Money Unnecessarily At Risk
Jess Stimson is a solicitor at Cartland Law, a firm specialising in tax & estate planning matters, and whose clients include lawyers, accountants, advisors and businesses, and she told Real Estate News Group that parents were placing themselves under unnecessary risk by not formalising their loans to children.
“If there’s no loan documentation, regardless of who has lent the money, then it’s difficult to enforce your rights. So if there is any kind of dispute, how will you ever prove there was a loan as opposed to a gift?”
“It can also cause family disharmony, as people can become unclear about the terms of the loan. Parents might be of the understanding that the money was loaned on a standard interest rate, whereas the child might believe it was interest free or a gift.”
Stimson says there are a number of common scenarios where parents can lose the entire sum of the loan, cases in which a simple loan agreement would protect them.
“The next big problem is what happens in a divorce or breakup. If the money is given to your child who is already in or subsequently enters a marriage or domestic relationship, then that money may become part of the marital pool of assets if the marriage or relationship breaks down. This means that the spouse or partner will receive the benefit of your loan or gift.”
“Someone you think is just a boyfriend or girlfriend could end up having a claim on your parents loan.”
“Whereas a formalised loan can be called on first to be recovered before the assets are split up. The same applies to bankruptcy – you can hope to call on a loan before other creditors make claims.”
Even After Death – Loans Can Cause Issues, Contested Wills
Stimson also pointed out that issues for parents can continue from the grave, for instance when two or more children have a dispute over how the parent’s estate should be split up when moneys has been loaned to both children and terms are unclear.
“In extreme circumstances, if the parents died and one or both children were given loans, there could be a dispute between the children regarding who received ‘more’ which complicates administration of a deceased estate. A loan agreement gives an objective value of the loan and can be used to settle a dispute or even avoid one altogether, rather than a ‘he said, she said’ argument that can quickly eat away at the estate’s assets in legal fees.”
Parents Can Get “Bank-Like” Debt Security
Stimson says that in the case of large loans, in the realm of hundreds of thousands of dollars, parents should still look to securitise their loans by registering a mortgage on the title.
“By registering the mortgage, you can have the same protections as a bank so that if anything were to ever go wrong, your assets are better protected from losses.”
Not Too Late – Retrospective Loans & Mortgages
Fortunately, parents who have already given loans too their children but haven’t formalised the agreement are not doomed to be at risk forever, and can put protections in place any time after the money has been transferred.
“Loan agreements can also be done retrospectively – we can prepare and sign an acknowledgement of a loan agreement for a loan that was advanced in the past. This gives the parties an opportunity to agree on the ongoing terms of the loan, and means you can mitigate any future risks despite not setting up an arrangement correctly in the first instance.”
“We frequently prepare loan documents and mortgages for clients in circumstances where they wish to support their children or even a friend, but want peace of mind that the money won’t be lost in unfortunate circumstances. The documentation and agreements are quick, easy, and relatively low-cost matters given the size of the risks involved.”
Stimson recommends a consultation to determine what risks you face and options available in order to protect your assets and avoid potential family disharmony.
For big brands moving into real estate, the business of a sales agency is a great proposition.
From an accounting point of view, there is no cost to acquiring stock to sell, each unit sold usually yields tens of thousands in revenue, your advertising and marketing is paid for by your clients, and your product is in very high demand.
On top of that, your sales arm will often feed leasing management contracts of someone else’s asset into your property management business, which in turn is an asset you can build and sell for a value often multiple times the revenue generated.
Life is good in real estate. At least, that’s what the outside world sees.
Big Players Diving Into Our Pond
But where there’s money to be made, new competitors will always be snapping at your heels to offer some differentiated version of the same product. And if they can’t do it differently, then they can always just offer it cheaper.
And big companies are always looking to create alternative revenue streams, so it’s no surprise that many are opening real estate sales businesses to try to get a piece of the pie.
So let’s take a look at who’s coming to town, and what they’re bringing to the table…
Jims Real Estate
Mr “Jim-of-all-trades” Jim Penman started his career by launching a part-time gardening business while studying his PhD, and launched a full-time mowing business in 1982 with just a $24 investment.
In 1989 he changed from a subcontracting business into a franchise business and in 1994 launched the second franchise, Jim’s Cleaning. The Jim’s Group now has over 50 other divisions with over 3,800 franchisees, including real estate which was launched in 2017.
Investor loan commitments saw a 0.6% increase, the first since February
First-home buyers rose to 18.1% of all loan approvals
Loans for newly-built dwellings behind much of the surge
While the real estate sector has weathered a difficult 2018, a look back can often show a silver lining – as is the case here.
The arrival of spring often heralds a swell in Australia’s real estate market, and 2018 is no exception. Housing finance as a whole saw a rise of 2.6% from September – this increase was part of a spring surge comprised of a host of positive figures.
A 0.6% gain can be seen in the nation’s investor loan commitments from September to October, making for an increase from $9.8 billion to $9.9 billion. This is the first time this value has risen since February.
Seeing a more substantial boost was the lending to owner-occupier buyers, which in October rose by 4.8% to a value of $13.9 billion – this figure ignoring the refinancing of existing loans.
Increases to both investor loan commitments and loans to owner-occupier can largely be attributed to loans for recently constructed dwellings.
First-home buyers are the other hero in this period, first-home buyer loans increasing from 8764 in September to 10,137 in October. Subsequently, first-home buyer loans amounted to a total value of $38.5 billion for the twelve months up to October.
This is the highest value seen for such a period in eight years – first-home buyer loans amassed $41.3 billion in the twelve months preceding May 2010.
With auction clearance rates dropping below 50% for many of Australia’s largest markets due to lenders being increasingly hesitant to provide home loans, this spring surge is a welcome sign that the real estate market may be on a positive trajectory regardless.
South Australia’s change of laws around property manager registration has sent the industry into a frenzied freak-out, with training organisations sending out different (and sometimes conflicting) information to the industry, and some accused of “scare mongering”.
We sat down with Industry Advocate and owner of the South Australian Property Management Community Facebook group, Brett Wheatland, to go over a number of key questions around property manager registrations.
I’m not currently managing Property, only Assisting, do I need to be Licensed ?
Yes, a Property Manager means a person who, for or on behalf of an agent:
(a) grants leases, tenancy agreements or licence agreements in relation to land (whether or not that land is to be used for residential purposes or for the purposes of a business); or (b) induces or attempts to induce, or makes representations or negotiates with a view to inducing, a person to enter into such leases or agreements; or (c) ensures compliance with the terms and conditions of such leases or agreements; or (d) performs a function of a kind prescribed by regulation for the purposes of this paragraph.
and performs any of the functions of a property manager on behalf of the agent.
Ref: Land Agents (Registration of Property Managers and Other Matters) Amendment Act 2017
I currently have my Sales License, do I need to do anything more?
Yes it is likely you will need to upgrade your existing registration to meet the minimum standard outlined by CBS. The following modules are the ones you will need to undertake in addition to your current qualifications:
CPPDSM 4011A –List property for lease CPPDSM 4013A -Market property for lease CPPDSM 4016A -Monitor and manage lease or tenancy agreement CPPDSM 4020A -Present at tribunals
I currently have my full Agency License, does that require any further Training ?
Good news, If you hold a current land agent’s registration no further training is necessary.
I have completed some training in the past, are there specific modules I need recognition for before I apply for my License ?
The following Modules are considered “approved training” and outlined by CBS as follows, and your local RTO maybe able to assist you in determining whether or not you are eligible for Recognised Prior Learning.
CPPDSM 4007A – Identify legal and ethical requirements of property management to complete agency work CPPDSM 4009B – Interpret legislation to complete agency work CPPDSM 4010A – Lease property CPPDSM 4011A – List property for lease CPPDSM 4013A – Market property for lease CPPDSM 4015B – Minimise agency and consumer risk CPPDSM 4016A – Monitor and manage lease or tenancy agreement CPPDSM 4017A – Negotiate effectively in property transactions CPPDSM 4020A – Present at tribunals
What is the cut-off date that I need to make an application for my License ?
CBS recommends that you lodge your property manager registration application by 1st August 2019 as you will be required to be fully licensed by the 28th September and you should allow time for processing of your application.
How much will my License Cost?
Your licensed property manager registration will include an application fee of $290.00 and a Pre-Grant fee of $200.00 which means your first year’s application will be $490.00 and will cover you the full year starting from September. Lodging your application earlier will automatically cover you for the period leading up to and including September 2019 to account for the period in advance.
Do I need to have another Police Clearance done?
Your property manager registration for Licensing will require a National Police Certificate (NPC) that is no more than 12 months old.
For questions regarding your property manager registration requirements, or to book in your further training, contact: John Morris – Real Estate Training College www.realestatetrainingcollege.com.au
Editors Note: Real Estate News Group accepts no liability and gives no warranties or guarantees for the accuracy of this information regarding training, licensing or insurances. Your individual training needs and circumstances may vary and we recommend contacting your local accredited RTO and CBS to confirm your needs.