You think newly zoned land is the same – it’s not – it’s a $700,000 difference.

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In James Market News today:

  • Under Quoting – Only 8 more sleeps to go
  • Todays auction action
  • Off Markets
  • Chris Richardson from Access Economics – Opinion
  • Big Changes Part 2 – zoning and $700,000 difference on one block

With the Easter break, very few auctions today, most of the activity is off market.

We expect it be the same again next week, before we burst into – The May Auction Market, the week after.

Under Quoting

Only 8 more sleeps to go

Only 8 more sleeps to go until we see the big changes in Agent Quoting.

We are quietly confident you will see a major improvement in Agent Auction Quoting. Of course it won’t be perfection but it should be a lot better.

Any sustained criticism by our industry of our government or the CAV, when we couldn’t get our act together over the last few decades, won’t get any mileage from us here at James. We had our chances to self regulate and we didn’t, so we don’t want to criticise, we want to make it work please – hopefully we really are not all ratbags.

Buyers please understand what the government is seeking to do – they are trying to provide a consistent form of quoting that is legal and better than the lies we have now in some places.

Quoting has to be fair to buyers and sellers, not just buyers.

Ethical or legal quoting can only go so far – Buyers will still have to contend with:

– the agent is working for the seller and;

– there may be 5 or 6 other buyers on the home (if it’s a goodie) all wanting to buy and all keeping their cards close to their chest.

So the CAV and the industry can improve quoting but they cannot provide a perfect form of quoting. It is not possible to know what every home will go for, even with good agents having good intentions and the CAV’s big stick.

However, Consumer Affairs can see trends in selling agents who continually “make mistakes” and they are showing they will prosecute.

AND DON’T FORGET THE CASH …

From May 1, yes that is right $5,000 in cash prizes to selling agents who do the right thing.

If you missed the MONEY$$$$ then click here to read last weeks full article on Underquoting.

Auction Action

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Justin Long sells 13 Avenue, Under the Hammer $5,733,000, 3 bidders – Read the report here

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Luke Banitsiotis sells 15 Durham Road, Surrey Hills Under the Hammer $2,867,000, 4 bidders – Read the report here

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John Clarkson sells 43 Black Street, Brighton Under the Hammer $3,130,000, 4 bidders – Read the report here

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Off-markets at James – last week

We know a lot of buyers don’t really believe the off-market (unadvertised) is real – they cannot see why anybody would sell off-market and they believe the off-market is just marketing hype from agents and advocates.

Please tell that to one of our clients who lost a shoot-out at $5,300,000.

We lost at $5,300,000 on an exquisite Brighton home through Andrew Campbell at Buxton. No sour grapes – we saw, we offered, three hours later we had agreement at $4,500,000 if no better offer that same day – unfortunately there was and we couldn’t match it. Well done to our competitor and their client, you bought a good home.

Not all bad news at James Buyer Advocates in the off-market scene.

A client was successful on a 1000 sqm home (off-market) in the Urquhart Estate, , north of $4m in the same week. Andrew MacMillan at Jellis Craig was the agent and there was fair bit of biffo in this one as well – this agent also makes your life difficult as he works for the seller well.

We are currently involved in 3 more off-markets, plus we have organised selling agents to sell an additional two homes off-market right now.

I imagine the off-market option for some types of properties will increase with the new quoting laws.

Craig and Ali

Opinion

Chris Richardson – We respectfully disagree with you.

Lots of talk around about young homebuyers and we think it’s good to get some differing opinions, as to what might work.

However a thing that won’t work is the blanket advice from Chris Richardson, when he said at the National Press Club, Canberra and we quote:

“The one bit of advice I give to young Australians is right now …. don’t buy ……. rent.”

Chris wasn’t quoted out of context. Listen to his entire speech here – it’s actually quite good. Click here

Now, we at James like a headline and alternative opinions – but this sort of comment, which may be well-meaning, is inappropriate and especially when it comes from a man of his stature. He is a well-respected economist and what he says holds some weight and that is the problem.

Unlike a lot fly-by-nighters, people actually listen to him.

Chris’s comments about young homebuyers not buying, but renting now were;

1) Not based on his area of expertise

2) Completely contrary to the rest of his Press Club speech, about being informed and missed opportunities harming future generations and dealing with fear.

3) Error in history, unless he is telling us that centuries of renting beats owning for lifestyle, family stability and wealth. Being forced to move from place to place is better than a safe haven?

Was this a tired answer to a question at the end of a long speech or has he shifted to suggesting that gambling and picking the market is now his recommendation for young people.

The correct advice for almost all young people is unequivocal.

Enjoy life, work hard, save hard and buy good (near transport and as close to the CBD) with an OK home, whilst keeping a buffer for illness, unemployment and interest rate increases AND if the appropriate opportunity arises now, then BUY NOW. If it doesn’t or you miss, then keep looking until you can buy (a goodie).

Oh and if you can, pester your parents to throw a bit in or partially guarantee a loan!

Please do not stretch too far, BUT equally as important – do not stop or give up!

This is always, always a better long term policy for the majority of young people and why?

Well let’s quote Chris Richardson from his same Press Club speech at the 21.30 minute mark – A more prosperous Asia, is an Asia that will want clear air, better food, better education, more travel and safer saving and this is almost a perfect wish list for Australia.

And where do you think a more prosperous Asia is coming to Chris?

In the long term it’s not going to get any better for young Australians wanting to live in ; and we are not attacking the man here, we respect Chris Richardson’s right to an opinion – we just strongly disagree with his headline (for young people).

ZZ1

Welcome to Part 2 of the James Big Changes Reports on the $2M+ Inner Melbourne market.

What you are about to see in the Inner Melbourne market, is bigger than Ben Hur.

In 2016 it was innocent until proven guilty – now in 2017, it’s guilty until proven innocent.

This change means that previously a developer had to fight to get an apartment block – now it’s a fight to stop his/her right to have an apartment block.

OK, that was my attempt to get you excited on the subject…

Today, we are discussing the Biggy of all the 2017 Changes.

The 2017 Residential Zoning Changes.

How bloody boring hey!

Nope, not at all – these changes – which are not proposed, they are enacted (March 27th) – yep they are here now, will see major changes in four things:

1. Streetscape changes in some streets as become the default build – fewer townhouses because while you can go up more, you can go out less due to minimum garden spaces. Could see the birth of the little houses movement – why not? Due diligence from an experienced eye is critical.

2. The of land/homes with and without Heritage overlays will further dichotomize – as there will be land that you have multiple options on and land that you only have one option on. See our story below – big price differences and how to avoid overpaying calculations.

3. Neighbours, streets, even whole blocks banding together to defend their neighbourhood character. The only antivenin for the zone changes is your local council putting in new zones / overlays or refusing permits and then winning at VCAT. However at VCAT it is now guilty until proven innocent – meaning it’s happening unless you stop it – not the other way around.

4. Gridlock in feeder roads to CBD and schools – you have to buy near a train for school, work and …… you will not be able to time effectively long travel distances on a regular basis, via car, within a decade or two. Professional advice on picking your precinct becomes critical for the longer term.

Please note:

Our article is not an editorial on whether the zone changes are good or not (a lot of it makes sense to us).

The powers that be have to provide housing options, for the thousands of migrants and young people, that are flowing into Melbourne unchecked from overseas, interstate and by natural births over deaths.

This article is about the biggest changes we have seen in our neighbourhood lives since ……. well …….. dual occupancies and ……..growth zones (around the train stations and shops etc).

ONLY this is far more wide reaching, as it goes into the heart of many .

This article is the start of examining on behalf of our clients – what the zone changes all means.

ZZ3

But it’s not everywhere – it picks and chooses, depending on your current residential zoning.

ZZ2

Ok, so what does this mean for you the buyer and seller, in this 2017 market?

Financially – as we always have, we will be advising all our buy and buy/sell clients what the “specific to each individual’s home” new financial issues are.

Some of our clients maybe sitting on potential gold mines and some clients need to understand, that they may be buying into financial quagmires.

Emotionally – we all understand that in Melbourne we are continuing to have massive, unchecked population increases that need to be housed – but many of you may not want that to be, literally in your backyard; so careful consideration needs to be given to your next purchase.

ZZ4

How to protect yourself when buying and selling.

We have bought over a thousand homes and zoning, overlay and council checks have always been part of our due diligence. They should be part of yours.

You need to know (as best you can) what is or what may be likely, coming next door.

The game has changed – James Buyer Advocates

ZZ5In General Residential Zoning – it is now unlimited the number of homes you can have on one block, maybe 2, maybe 5 and maybe more – as long as you meet the height and garden space requirements.

As well, it is not unfathomable for Toorak to become, over the next few decades, more like East, or even ; as it has large amounts of General Residential Zoning and if the numbers stacked up, possibly lots of apartment blocks in the future.

In Hawthorn there is a lot more Neighbourhood Zoning – which has more restrictions on what can be built and potential for change under these new zones is less widespread in lots of Hawthorn.

But let’s leave the future to others – let’s look at right now!

ZZ7

Here is a little story – pardon the pun.

Oh Mal, please spare us your stories.

Sorry, I think this highlights what it happening RIGHT NOW.

This is a buy we completed in the last month (2017) at James Buyer Advocates – the names have been changed to protect the privacy of all – but the dollar difference is 100% accurate.

Malvern 2017 – we received a phone call (as we often do).

Mal, I’ve put an offer in and I don’t feel good – can you help?

My standard reply is: it would have been better to speak to us before you offered – our fee is 1% – would you like to proceed.

Yes please.

I have offered $5,400,000 on a Heritage home and the selling agent has said $5,500,000 will do the deal.

Mal is this smart, are my values ok?

Well John, it’s a classic period home – but actually no – you have offered too much, as you have calculated land value on surrounding land values – which are in adjoining growth zones and also they have no Heritage overlays.

1. Your land has a Heritage overlay and is worth a lot less.

ZZ6

2. And what’s more John, as the values of the adjoining land go up when they are developed – your actual values may well go down, as you will become an island – a home that you have bought and spent money on renovating, may well become a lone ranger, surrounded by wagons of flats.

That is a double whammy.

You pay too much on the way in and you get too little on the way out.

Z11

Ok Mal, I’m listening – what next.

Your – pay $5,500,000, after all you want the home or take a punt, shut up shop and restart negotiations in a month – I’m hard pressed to see others paying what you offered.

Three months later, at Easter, with further advice the home was purchased at $4,800,000 – closer to the right money.

Yes it was our client who bought it – brave, but $700,000 better off – a big chunk towards any renovation (even after our fee) AND our client’s decision was no longer a mushroom one (in the dark and full of …..); it was a totally informed one.

They truly know what they are buying.

So good for our buying client and 100% true on $700,000 and details – only the names have changed.

A current story about zoning, overlays and the valuation mistakes that can be made.

Although you may disagree, it was still good for the seller, as we paid more than anybody else.

So hey – there it is.

Whoever thought zoning could be so damn exciting!!

Next time you’re at a party and you are thinking of hooking up with a stud or a town planner – chose the town planner, they will be so much more stimulating with the new zone changes!!

OS&I


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