Cold listings are now hot property


By Justin Eslick

In Brisbane, like many places across Australia, a number of properties are staying on the market for considerable time and buyers have got the choice of properties and the time to make their decisions – something investors have not had for a long time. Investigate Property has been investigating a number of these types of properties lately. Just in the last two weeks we have looked into:

  • A block of units on the market for $850k in February, now under contract to a client in the mid $700k’s
  • An investment property just 6km’s from the CBD that has been on the market since December 2007
  • A house that sold for $565k in December 2007, now available to buy in the high $400k due to unforeseen circumstances
  • A renovator that has been available since February, with potential for purchase $100k less than the original (over-inflated) asking price
  • A nearby Public Trustee renovator that failed at auction in December 2007 and now on for considerably less than the original price expectations
  • A house that started life at $470k, the vendors rejected an offer of $435k in the first week, now asking just over $400k and we believe can be purchased for high $300k.

Some might say that this is a sure sign of a market retreating, but it isn’t. With each of the examples above the original asking price was inflated, but with the market running as strongly as it did towards the end of 2007 and into 2008, who could blame the vendors? Unrealistic vendors were continually being rewarded with high offers. Now the market is finally saying enough and owners need to become more realistic.

Another reason for the above properties being where they are is because they have gone ‘cold’ and the marketing agent has gone ‘cold’. The agent has not applied any fresh advertising and they have achieved new listings, which are now taking precedence.

There is a lesson to be learnt here, both for the agents and more importantly for buyers! There is great merit in taking an approach of looking at old listings, rather than new listings that are being fought over by buyers. Often with old listings the owner becomes more realistic, or the agent starts working more for the buyer in an effort to secure a deal, or the market catches up.

While we are on the topic of here and now, how many people are considering developing at the moment? If you are, great! Because now appears to be a good time to take that step.

For the first time in a long time we should start to see builders becoming quieter. It doesn’t appear to have happened in a large way yet, but it should soon. Plenty are still busy as they have a backlog of work, but with the market dropping off, so too should building activity. It makes sense. A less active market means less property sales, resulting in less capital for renovations as investors take a cautious approach. A less active market also means less development and building applications, again resulting in less building work. Add to this rising infrastructure charges, especially in Brisbane, which will further put the brakes on development.

The other upside? Less supply coming onto the market, which will eventually trigger demand, particularly in cheaper stock such as units. Even if there is a delay with this, we all know that rents are set to increase dramatically, so another option is to Build to Rent – hold onto the development for good rental yields and very good depreciation. Don't forget also that it can take between 12 and 24 months to buy a property, get the approvals and build, so if you wait to hear about build prices coming down, then it is too late!

Together with the Reno Kings we are hosting “Developing for Profit”, an information packed, two day, development focussed workshop suitable for first time investors through to experienced developers. For more information click here.

Investigate Property is also actively seeking good investment properties for clients, no matter what the market. By buying through a buyer’s agent with town planning qualifications you know you are buying in areas with less risk, higher growth and more options.

To find out how to become an Investigate Property client, click here.

“Thank you Justin for the huge effort you put in to secure our latest investment property. After being told by a number of consultants that our plans to subdivide were not possible, you came through with the right questions and asked the right people and were able to turn what was otherwise going to be just a plain house on a big block into a subdivision property where we get to keep the house! Had we have done this without you we would have walked away from a great opportunity. We can definitely see the benefit in having a buyer’s agent who is also a town planner! Thank you again.”
P.J. Brisbane.

"Investigate Property is not just a purchasing service of quality properties, but it has also provided me with much advice for my own investments. Justin has given me valuable and experienced advice on subdivision, renovation, development and town planning for my own projects. Thanks to Investigate Property, it has saved me from a few costly mistakes!"
S.A. Brisbane

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