I attended a very interesting seminar last night. The speaker was Gold Coast Valuer, Tod Gillespie, from Herron Todd White Valuers. They are the largest Valuers in Australia and he gave the group some good insite into property prices and hot spots to buy on the Gold Coast.
Many Sellers are still holding out for a better sale price on their property. Some are even saying "The market is starting to move in my area". While there may be some "sold" signs around there is generally extenuating circumstances. In some instances Sellers have had to take a considerable drop in the original list price.
Tod re-confirmed that if a Seller really doesn't have to sell then withdraw the property from the market. If the Seller does really have to sell then there is a number of things to consider on this market.
1. Is the property listed at realistic price for today's market?
2. Is the agent telling you how it "really" is?
3. Can you determine why a property sold for what it did? I.E. such a high price or such a low price.
There is currently 10 to 12 months supply of stock (properties for sale) on the market in certain suburbs on the Gold Coast. This doesn't take into consideration stock that will be listed in the coming weeks.
Sales all over the Gold Coast are at an all time low and the properties that are selling are either at a realistic sale price or the bank has had it sold on the Sellers behalf.
Tod indicated there have been a number of contracts that have collapsed due to the valuation. If the valuation does not come close to the contract price the Buyer can and generally will terminate the contract. The price can be re-negotiated at a better sale price or the Buyer simply walks away because there is so much for them to choose from they will move onto the next property. It is possible and recommended for a Buyer to get a valuation on a property before going to contract.
Banks have indicated that the recovery of the real estate market can take up to 18 months. They are basing this on the mortgage stock to clear. "Mortgagee in Possession" sales are on the rise and this is where an opportunistic buyer will be rewarded.
Great News for Investors! The market is ripe for the picking. Investors are very well researched and are savy in their offers to purchase. They look for certain pockets of growth, brand new -v- established due to tax depreciation reasons and just as important the rental return.
Buyers are taking longer to make decisions even if they have their finance pre-approved. Many are waiting to see if there is a further drop in the market. Again, there is no immediate hurry for them to make decisions unless it is for their own current living arrangements.
Banks have become very strict on their lending criteria. Previously money was more readily available and they were approving loans where in some circumstances the margin was too tight and maybe shouldn't have been approved. This too has lead to some property owners now being forced to sell.
In summary, if you don't REALLY have to sell then don't. If you do REALLY have to sell then talk to your agent about the list price and the number of properties for sale in your area. Are you comparing Apples with Oranges?
If you're looking to purchase and your finance is sorted - GO FOR IT!
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