oc | Monday 30th March

Solutions for Young Homebuyers – Bumper Winter Issue

The happiness of youth. Simon Carruthers (Cayzers) loves his job and why not? Six bidder Volcano bought under the hammer for $1,300,000 at 50 Reed Street Albert Park

The happiness of youth. Simon Carruthers (Cayzers) loves his job and why not? Six bidder Volcano bought under the hammer for $1,300,000 at 50 Reed Street, Albert Park


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  • 6.00pm Saturday June 20th – Mid Term Report
  • Market is in wind down mode re new stock, as most good agents are beginning to break for winter school holidays. Next week is the last serious week of auctions, until early spring.


  • Any market read on any winds of change, won’t be meaningful until September, when larger numbers of newly presented good quality homes start to enter the early Spring market.
  • Summary for year to date is very simple: equal or stronger than any market, any of us with a longer history in real estate, have witnessed.
  • Main drivers in Inner East and Bayside have been overseas buyers – they have been explosive and relentless. See our James Buyer Advocacy May Stats – click here
  • Prices on homes with big land, big land with no homes or bulldozable homes have gone up 10% over the Christmas break and some another 10% between February and now. Yep that’s 20% on some – WOW!
  • The “Overseas 20%” flow on effect has been substantial and profound; with $1m fringe suburbs now seeing more and more sales at $M+, as Inner East and Bayside underbidders are forced out of their traditional areas of hope on price. The types of properties not attractive to Overseas Buyers have also had significant price increases due to the wounded underbidder flow on effect – ie as locals who can’t buy big land homes are forced to compete on smaller land homes. The 3P’s (Price, and Position) have had profound and long term structural changes in early 2015; which has been a culminating result of overseas buying since the 1970’s and an accelerated increase in overseas buying and influence since the 2009 FIRB legislative and FIRB attitudinal changes. Melbourne is now firmly an international buying market.
  • Bubble? Mmmm, not sure for the above reason (immigration), of course at some stage the intensity will ease – but that easing will only be sharp if there is a significant change to immigration AND tax/superannuation buying laws AND interest rate increases and that appears unlikely to occur in a hurry.
  • One final summary comment as we near Melbourne’s Winter Solstice. The game has changed and all of us have to change if we want to buy in Melbourne’s now International Market. James Buyer Advocates has changed – you don’t see our ratings public anymore, until after they’ve sold – yet we are buying more. You don’t see our ochre jackets at OFI’s as much, yet we are buying more and you don’t see my hat, tweed suit and hand up at auction as much anymore, yet look at our James May buy and miss results. Click here. From 2015 the game has changed, we at James Buyer Advocates have changed to better meet our client’s needs, do you the wounded underbidder need to change?


Good News 1: Simone and Adam bought (selling agent was Tom Ryan) for a client today on the their first bidding job with us. The client had previously missed 4-plus times over the last 18 months. The good news was this was a referral from a selling agent, Desiree Wakim, for no money, no house to sell. It was a referral from Desiree because she cared and she thought Simone could help. And Simone did. Thank you, Desiree!

Good News 2: Just bought for a client (selling agent was Mark Wridgway) who had missed out on 2 properties with us in the last month. We bought this one at auction, for around $400,000 less than our last offer on the other homes with other agents. Nothing to do with the agent we bought off, he got a great result. Just pointing out you don’t always have to spend more and more to be happy. Think laterally on your needs, our client did and got a better result.

Good News 3: Gina returns to work end of next week after successfully completing the Harvard Negotiation Course in Boston. 20 people in her group from all around the world. We’ve asked her to show some mercy on James Tostevin, Mike Gibson, Rae Tomlinson, Peter Kennett and others, as well all of us at James. Fingers crossed Gina does.

Good News 3: Gina returns to work end of next week after successfully completing the Harvard Negotiation Course in Boston. 20 people in her group from all around the world. We’ve asked her to show some mercy on James Tostevin, Mike Gibson, Rae Tomlinson, Jeremy Fox, John Morrisby, Peter Kennett and others, as well all of us at James. Fingers crossed Gina does.

James Market News will be off air from this week until late July/Early August. However, James Buyer Advocates will still be open and sifting through off markets. EOI’s. stales, private sales, the fewer auctions and clarity meetings with clients – eg getting a good plan to attack spring with.


23 Finch Street, Malvern East (John Bongiorno, Marshall White), $4,530,000, Under hammer, 2 bidders

47 Erica Avenue, (Phillip Kingston, Gary Peer & Associates), $3,650,000, Under hammer, 3 bidders

11 Bristol Street, Surrey Hills (Campbell Ward, Jellis Craig), $3,580,000, Under hammer, 2 bidders

For James Auction Reports click here


2 Munro Street, Brighton (David Hart, Buxton), $1,677,000, Under hammer, 8 bidders

50 Reed Street, Albert Park (Cayzer Real Estate), $1,300,000, Under hammer, 6 bidders

9 Clifton Grove, East (Hamish Tostevin, Marshall White), $1,502,500, Under hammer, 6 bidders

For James Auction Reports click here


9 Smythe Avenue, Mont Albert $4,100,000, Passed in, 0 bidders

109 Male Street, Brighton  $2,200,000, Passed in, 0 bidders

54 Athelstan Road, Camberwell $1,910,000, 2 bidders

For James Auction Reports click here

From youth at the top to the wily old fox at the bottom, Mr Kingston, no less. So I suppose we could say this was an inside job. Bought under the hammer, 3 bidders, $3,650,000 47 Erica Avenue, Glen Iris.

From youth at the top to the wily old fox at the bottom, Mr Kingston, no less. So I suppose we could say this was an inside job. Bought under the hammer, 3 bidders, $3,650,000 47 Erica Avenue, Glen Iris.


Go to our young homebuyers website www.jameshope.com.au

Last week we addressed some of the key issues facing younger homebuyers. This week, as promised, we’ve got some practical solutions.

Home buying and these suggested solutions are not for all young people (sub 45). But sitting on your backside, doing another tertiary course, or hoping a magical answer will come from your iPhone is also not the way for every young homebuyer either.

Yes, Australian society is presiding over a system that is unfair on you as young homebuyers.

Australian Society is taking away young people’s housing supply and increasing competitive through negative gearing, wealthy immigration and through paying no attention to regional infrastructure. Young people need to push forward a new batch of leaders with ‘we’ ideas instead of ‘me’ ideas and change. You need to get out on the streets and protest until you find leaders who can even up the ledger between older and younger Australians but……the revolution may take 20 years and…..

…….you as a young homebuyer can’t afford to wait forever to enter the property market.

Waiting for the market to ease never works.

No easing of the market will assist you to any noticeable degree. If you wait for any future government intervention to save you, your now 6-year-old child may be 26 before you can afford to buy. Your 16-year-old may be a 36-year-old.

You have to take action yourself. Wait for the market to change and you’ll pay the price. Please don’t confuse this statement with passing on buying the wrong home and then continuing to look for the right one in a patient, logical manner.

So our suggestion is don’t focus on the unfairness of negative gearing, super funds, Asian , well-off Baby Boomers and private family wealth. Focus on the fact that, this weekend, there are 300 people out there trying to buy the 30 good homes in inner to middle Melbourne on offer.

Yep 270 of those people are going to be unhappy – you need to be one of the winning 30 buyers this weekend or next weekend or later in the year.

So in Inner Melbourne right now; you as a young homebuyer are in a fight, like the wildebeest of Serengeti in a drought. There is limited grass and you need to avoid the predators (dodgy buying and selling agents, dodgy financial planners, dodgy brokers and dodgy advice which may come from well-intentioned people like your friends and relatives). Other predators are negative gearers, super funders and wealthy overseas migrants – not to mention your fellow young homebuyers.

Ok, all this negative and hard stuff is there, but don’t let it overwhelm you. Acknowledge it and move on. Many wildebeest see bad things, but the strong and the smart live on.


Our statistics (bidders per auction) show that on good homes there are consistently 6 to 10 bidders per well-priced suburb median Inner Melbourne home above a million dollars. It’s the same or even more below $1M.

Not every young homebuyer can be a winner – there are simply not enough good quality Inner Melbourne homes to satisfy demand. This is the mindset I think, or I hope Joe Hockey was trying to espouse. It’s up to you.

So get the right mindset – it’s up to you or you’ll be living in Whoop Whoop West. And when you try and sell in Whoop Whoop West in 10 years, to be closer to schools, the prices in Inner Melbourne could be even more unattainable.

Get the right plan and then go after the right position, right home and right price. Read The Age/Weekly Review Young Homebuyers Guide, we wrote last year (stats say one of the most read columns of its type in Australia) click here and you’ll see what you need to buy. Click here for James Home Buyers Guide pdf same words.

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Get a deposit and get multiple funding sources – banks, relatives, tenants, partner and so on.

I’m not a great saver, more a forced one and I care little about superannuation – which may or may not be a wise move now I’m hitting the twilight years!

I’ve think I’ve worked hard (bought over 1000 homes), had good jobs, lived in secure housing near the city, travelled, raised some great kids, had good family support and a good life (lot more to come I hope). I’ve lived off good income, at times overdrafts, parental help in the early days and growth allowed by negative gearing in the latter days. Our family has been lucky, but we’ve also made our own luck. The one money thought that stands out for me: good capital growth and a good job has given us a good good life and covered over a lot of my life mistakes and money sins.

Saving is good for many and recommended, but my point is there is more than one way to skin a cat (isn’t that an awful saying) and to fund a home. Such as:

  • *Parents (1) – They are your best chance for help with a deposit and loan guarantees. But you may have to sell them on the idea of helping you as they’ll want to protect themselves as they get older as well. Tell them if they don’t want to drive a hour to see the grandkids then you will need help buying closer (ok, not next door but maybe only 15 minutes away) – pull on the heart strings and then pull on their purse strings.
  • *Parents (2) – Start hassling them to buy investment homes. They can make their retirement better by buying and renting back to you. These investments build wealth and income and you help each other. It’s the Greek/Italian, Chinese and Jewish way and it works. If you are worried about family arguments, get a written legal agreement, such as a formal lease.
    * for both of the above, you can’t expect (well you can, but why should they) your parents to do it all. You have to help yourself; to save, maybe get a second job and yes, you may have to move further out (just not too far and good 3P’s), to buy your first home and live in it for 5 to 10 years.
  • Get a good job. Joe Hockey is right – please I don’t barrack for any political party – unless Pendles or Clokey are running for PM. If you want to be a Buddhist, vegetarian, charity-giving monk then hats off to you; but in all likelihood you won’t be living with three kids in a Hawthorn semi-detached period home. Please I know this sounds harsh – but there is validity to Joe Hockey’s comment – get a job that pays. Sales, Real Estate, Marketing, Small Business…….. or get a second job, or do this plus ask your parents for help and maybe negatively gear. Do what it takes, and do it sooner rather than later, if buying a good home is an important goal of yours.
  • Get creative. Buy the home you can’t afford to live in now by buying and negatively gearing now. Put a tenant in and live at home with Mum and Dad. Or buy a home and live in somebody else’s home while they rent your property. Make sure agreements meet tax laws, but negative gearing on a good capital growth home is such a powerful tool. You need it to beat overseas bidding and if you can get some growth in the next ten years before you can afford to move in, you will have put hundreds of thousands of dollars into your back pocket. And it’s legal and mostly tax free (if you’re smart about it). Yes, of course there are risks, but sometimes to get into the housing market you need to take some risks, even if there is no real safety net.

Get a plan and a process that works.

Price, property and position. These are the three ‘Ps’ you need to keep in mind when planning to buy a property.

for Precinct, Home with Land, House with a liveable floor plan and all in a position that is near infrastructure.

The knowing is not rocket science – the rocket science, in 2015, comes in the getting.

Have clarity on what you want. Is a particular property really the home for you?

List the financial and emotional outcomes you want from your home under the price, property and position headings. At the end your PPP plan, as a starting point, shouldn’t be more complicated than three sentences. It’s simple but many people don’t work out what they want before buying – they don’t have a plan. Read the Melbourne Homebuyers Guide – click here

However, avoid plans from financial planners, bankers and seminars – if they involve high risk deals such as off the plans and new apartments – these do not work for young homebuyers.

Remember the FFFs too – five-year, flexible and future-proof. In 2000, a young buyer bought a Docklands apartment for $507,500. They sold it in 2014 for $576,000. At the same time another young buyer spent $493,000 on a family home in Glen Iris. They sold it in 2014 for $1.5 million. Read the Melbourne Homebuyers Guide – click here

Once you have your plan, assess, and – eg follow a proven process.

But, just as they don’t plan, many people don’t stick to a process either. And many people can’t negotiate. So…….

Get a professional.

My next piece of advice is the advice I would give you if you were having an operation, going to court or starting a business and that is to get a professional.  The facts prove themselves. A good professional property advisor will help you. See our James Buyer Advocacy May Stats – click here

People think you simply buy a house by sticking your hand up at auction. But only 25%-30% of the properties we bought in May were bought under the hammer. 70-75% weren’t. They were negotiations.

People baulk at paying a 1% fee for an advocate’s services, but while you wait and wait to buy a home, the market goes up. In the past few months some house prices have gone up 10-20% and many buyers are:

  1. still not in a home and;
  2. now having to find 10% to 20% more

This is all because they felt they couldn’t afford good professional help – when indeed it would have paid for itself 10 or 20 times over in the last few months and perhaps 100 times over a 7 year period. Include it in your bank loan.

Buyer advocates are widely – and wisely – used in Europe and the US.  But most Australians think they can buy a home by themselves because that’s what Mum and Dad did. That was a different time and a different market. It might have worked in 1985 but, for many, it doesn’t work in 2015. You either don’t buy, or you end up buying a home nobody else wants at a price that nobody else was prepared to pay for it.

This week I met Hard Luck Harry and his wife, Hard Luck Harriet. They’ve bid 5 times on homes in the last two years and felt nothing was going right. I made one suggestion – when nothing is going right – go left. Try something different. Hire an experienced, reputable buyer advocate / buying agent.

I’ve never done this before and I probably won’t do it again, but click on the link below and you will see our last month stats for jobs we did. Nothing is hidden (except our client’s identity) from these normally confidential monthly stats. They are James Buyer Advocates May 2015 results and they show you a way to buy in less than 10 weeks with one to two bids. We might not be successful for every buyer in 10 weeks, but it won’t have cost a cent in that case. 50% of the people we had to beat for these properties were Overseas bidders.


For Young Homebuyers – the Inner Workings of James Buyer Advocates in May 2015. Click here

Yes, we mainly buy properties in the $2m to $6m bracket, but most of the issues are similar for young homebuyers. Most of our clients have affordability issues. Almost everybody we work with has a limited budget, too.

Make good decisions and take action.

Good decisions. It’s all about the decisions you make. Isn’t all of life like that? If you decide not to make a plan, not to get some professional help, not to work hard and not to do your research they are your decisions – and they are bad decisions if you want to buy a good home.

This is what a James Report contains. You need to build your own excel databases to be able to do something like this.

  1. Ask Questions of your Plan
  2. Assess the property (Due Diligence)
  3. Work through values, not just what the agent says.
  4. Get a negotiation strategy that works, email mal@james.net.au if you want, for a free phone appointment on Mondays or Fridays or go to our young homebuyers website www.jameshope.com.au Enjoyed speaking to a number of young homebuyers last Friday – hopefully I helped, and no I didn’t charge for the advice or sign anybody up. This week I still have some spots and then restart in August.

Click Here for sample of what we do for our clients – James Bidding Report


Finally, I’ll leave you with home-buying wisdom from the Melbourne Homebuyers Guide:

1. Happy spouse, happy house.

2. History repeats itself unless you break the cycle by breaking your habits.

3. Good decisions and bad decisions take the same amount of time and angst – only the quality of the prep is different. Get those 3P’s (price, property type and most importantly position) spot on.

4. Time heals or hides nothing in Melbourne property, it only accentuates.

5. No definition of value maintains its rigour for all people, except value to you; and

6. In negotiation, the closer you get and the more you talk about money, the further you drift from getting what you want.

 and my new No 7. Get the right mindset – its up to you.


  1. In August, September and October (subject to demand) we will run the 1000 slide Buyer Advocate Course with some modifications for young homebuyers. We will make no money from this as Young Homebuyers are not our target market – so let’s see if we can help you. More info www.jameshope.com.au or email.
  2. Get a negotiation strategy that works (email mal@james.net.au if you want, for a free phone appointment on Mondays or Fridays or go to our young homebuyers website www.jameshope.com.au Enjoyed speaking to a number of young homebuyers last Friday – hopefully I helped and no I didn’t charge for the advice or sign anybody up. This week I still have some spots and then re start again in August.
  3. We also have one on one talks for parents to show how we buy investments for family/parents/ through parents. We do charge parents fees and make money from parental purchases. Please email mal@james.net.au for more details.


G’day Dennis Danaher and I’m a property lawyer involved in many, many buys and sells each year, at all price ranges.

Mal has asked me to give some advice for young homebuyers.

Firstly can I acknowledge your plight – in my opinion it is harder than 20 or 30 years ago to buy your first home. And like Mal, I share the view that it is better to get into the market as soon as you can, providing it is a good home. Eg good land, good floor plan and good spot. If you buy poorly and I see this regularly, you will be selling a lot sooner than you thought for a lot less than you expected. Not a good start to your property journey.

The best piece of advice I can give is also similar to Mal – get good professionals around you. In my area of expertise that means get a good lawyer (not too cheap and not too dear) to check anything you are about to sign or might sign on the weekend BEFORE you sign.

Get a lawyer you can trust BEFORE YOU SIGN and AVOID WEIRD.

Many young homebuyers I know find home buying contracts and other paperwork a bit scary – all the stuff seems a bit weird.

So one of the more common solutions for younger homebuyers is to ignore the paperwork and just sign where the agents tell them.

This is not a good idea.

For instance did you know that you are not buying a block of land, you are buying a piece of paper. It’s called the title. And what is says on this piece of paper is what you are buying, not what is between the fences. So that piece of paper needs to be right.

A bit weird hey?

Did you also know that you can have a verbal legally binding agreement on a lease where you are renting BUT for a purchase of that same home you CANNOT have an legally binding agreement unless it is in writing.

Another bit of weird hey?

How about this one – you can sign a contract on an off-the-plan apartment and they can hold your money for two years and then not build. Weird hey?

I could give you hundreds of stories about weird things on buying properties but who wants to hear from a boring lawyer.

All you want to hear from that boring lawyer is IT’S OK to SIGN, there is nothing WEIRD.

Get a lawyer you can trust BEFORE YOU SIGN and AVOID WEIRD.

Dennis Danaher – Danaher Legal – Solicitor


Hello I’m Richard and I’m an architect (yeah I know one of them!)

So for Young Homebuyers finding your dream house in today’s market is difficult. I do know this and there are some risks involved.

But if you get it right – it can be so worth it, emotionally and financially.

1. Even with a limited budget, you need to be clear on what it is you are buying and not just buy anything. While I know Mal is encouraging younger homebuyers to get into the market as soon as they can, he is not saying just buy anything. I totally agree.

2. Attributes such as a north-facing backyard, solid brick construction, off-street parking make any property a good purchase; but I acknowledge finding a place which ticks all the boxes is difficult to find and then often a lot harder to buy (due to competition). They are worth the fight.

3. Notwithstanding that – you still need to do your due diligence, especially if you are thinking about potential for renovation.  Check with local authorities, to see what really is possible. Look around the area to see what others have been able to achieve, but still be conservative and do research before making hasty decisions. Often sites that look perfect can have eccentric easements or particular constraints that may not be apparent.

4. We’ve all seen the TV shows and they can be inspiring, but they too have to follow council and building rules.

5. A good design can transform something fairly terrible into something amazing, however a good tip is some properties simply are easier and less expensive to develop than others. Buy easy before hard.

6. Often architects are seen as a luxury expense, but if selected carefully can offer sound advice and experience and make money in the long run through clever design decisions.

7. My best piece of advice for first homebuyers is get the architect crystal clear in writing of your budget before he or she is engaged.

Buying your first house is a nerve racking process but it should also be an exciting time too.

Never Stop Dreaming and do something about it.

Richard Blight – Blight Blight Blight – Architect


Agent Survey: What is your longer term advice for younger buyers trying to get into this market?

Michael Hingston (Jellis Craig, Hawthorn):
It’s important not get disheartened as there are always good opportunities around. The reality is that everyone has a budget, even if it seems as though they don’t. Doing your research will save a lot of time and frustration and being prepared to stretch will significantly increase your probability of success. When bidding or making an offer ensure you don’t set your limit on even numbers such as $1,000,000 or $2,000,000 as it is amazing how many properties are purchased at just a few thousand dollars over. Real Estate is a long term game and you must take a long term view with the purchase. Good luck.

Ada Taylor (RT Edgar, Toorak):
My advice to any purchaser is to always think long term. We all have our own individual ‘wish list’ but to make any sound investment in real estate you should always try to appeal to the largest market – not just your own current needs. The most important considerations should always centre around location, orientation, and the potential to add value. Properties located close to transport, amenities, and schools will always be sought after. Orientation is important as light plays such a vital role in how a home ‘feels’. Buying something off the plan or fully renovated does not always represent the best value for money. Be brave to see the potential in any property even if it may take years to realise. Finally, if looking at apartments (which many younger people often are), wherever possible look for older style and boutique developments which tend to retain greater value.

James Tomlinson (Marshall White, Armadale):
Do your due diligence, homework and establish a relationship with an industry expert (agent or buyer’s advocate) that you feel comfortable with and have trust in. With the right research, market knowledge and time invested; opportunities will arise.

Sam Gamon (Chisholm & Gamon):
Property selection is hyper critical for long term success. Even if you have a compromised budget, try not to settle for properties with vulnerabilities or weaknesses. If you need to look a little further afield in order to secure the right attributes, you may see the longer term rewards so long as you’re selecting properties in established areas with growth potential. Ideally focus on areas close to the train or some form of reliable transportation, close to amenity and potentially near shops that have the makings of good cafe strips etc. Make it your goal to pick a property with off-street parking, outdoor area and light. Ideally select something with a pretty front cover or one where you can make improvements. It’s important you select a property where you can maintain some control of how it is presented to the market in the future.


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