Thursday, August 29, 2013

Spring and Spin

Sunday marks the beginning of spring at last, then the election next week, and then we go into a spin as properties will no doubt flood the market. Also so much hype and plenty of "spin" on how fired up the market is becoming. But that's ok, as agents, we are used to living the real estate spin.

The reality? Yes, there is sure to be a lift in spirits and confidence given a decisive election result next week—for all property owners, let's hope it's decisive! The weather is coming good after such a cold wet winter and there may be another interest rate drop on Melbourne Cup Day, according to those in the know. It all feels good.

The reality is that YES, Sydney is reporting all time record auction clearance rates over 80%. YES, Adelaide had a great week with an auction clearance rate of 70.7% last week, and YES, Chinese buyers are active—buying up lots of property—but Adelaide is only sitting on the fringe of all this activity. Our local buyers remain by far and away the most significant players in the market, while interstate and overseas buyers come and go in waves.

I've had personal briefs from both Australian Property Monitors (APM) and RP Data in the past weeks as to the state of SA market. They both show Adelaide as a stable and very consistentresidential market, with little change expected for at least the next two years. Their conclusions factor in the recent surge in activity in Perth and Sydney, and the expected knock on effect it potentially has. Our home values went up just 1.1% over the last 12 months to July 2013, compared to Perth at 8.3% and Sydney at 7.5%. Increasing unemployment and our local economy do worry both analysts, but it still looks ok for property.

Investor activity has gone through the roof as property has emerged again as the flavour of the season. Improved buying power, lower funding costs and solid rents make property look really attractive once again. Yeah—we're getting popular again.

I read with a smile all the spin about the Chinese buyers flooding across our borders and buying up big—and while the nub of these stories is true, the reality is that this is a global phenomenon. The people buying property in Adelaide are pretty much all known to Adelaide with connections here. The Chinese market are astute and don't just throw darts at the map with cheques attached.

As we pointed out months ago in this column; Australia now operates in a Global market place and as local Agents we need to act in the best interests of our clients. We need to be sure we are all over any emerging trends and market changes.

Launching our ToopGlobal website this year ensured we had a place for people from around the globe to connect with us. Part of our strategy was having a fully translated Chinese website for our clients, a precautionary move to ensure we cover all bases, while creating a way to measure and track where enquiry was actually coming from.

The Chinese site—having received so much publicity recently—is a place for global property owners prepared for a scatter gun approach to selling (and with money to burn) to place their "needles into the global property haystack!" Check it out—the site stats say it all. Their real action is in the USA and Europe property sales, and in Australian markets, primarily Sydney and Melbourne developments.

Local connections and local trusted networks are driving the best sales results for local, national and international buyers; there's no doubt about it.

Back home, spring is finally here and it's an awesome time to sell. We have buyers from all over the place hungry to hear about new stock, so it's time to cash in—we're ready to take your call.

Remember, when it's time to get serious, it's time to get Team Toop.

Happy Father's Day dads.

Anthony Toop

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Thursday, August 22, 2013

Innovative & Exciting—Adelaide is leading the way!

It's coming... Citywide, outdoor Wi-Fi. Adelaide is charging forward in the tech space—the City Council has announced they will build a $1.5million dollar Wi-Fi network across the CBD. Local Internet provider Internode is working with the government to get this across the line by March next year... and it will be FREE. An article featured in The Advertiser last week notes that CBDs around the world, including Houston in the US and Blackpool in the UK, already have this in place. Adelaide is nation FIRST and once completed it will be one of the largest citywide outdoor Wi-Fi networks in the western world!

Initiatives like this change the capabilities for us to deliver new standards of service to our clients. The flow on effect should not be understated. Toop&Toop are onto it... more innovation.

The obvious benefit will be the ease and inexpensive way to search for homes or rental properties throughout the city. People will be scattered around the CBD—in caf├ęs or on park benches—scanning the Internet for the latest investment news or Facebook updates on what's sold.

The real message: times are not changing—they have changed. Free Wi-Fi in Adelaide is a milestone, where instant connectivity and communication becomes the norm. Consumers today expect connectivity, and for no cost.

Service industries, such as restaurants, hotel chains and even real estate agents need to understand and embrace this. When I travelled overseas, no free Wi-Fi in a hotel was a deal breaker. Hotels that charge $20 per day will suffer if they don't change their thinking. Connectivity is not an add-on cost anymore—it's expected!

The same rings true in real estate. Tablets and smartphones are not a fad that will disappear. They are expected tools of trade. Real estate has emerged as a fast paced, on-the-go business where instant information is a given. Agents who are not equipped and trained with high-speed information technology are getting left behind.

Pen and paper at open inspections is now synonymous with "double handling". Our clients love having instant, real-time updates—rather than a typical phone call three days later, once notes have been transcribed back at the office—or worse still... no report at all!

This Adelaide initiative opens up more opportunities for video streaming, security enhancements for property owners and a raft of possibilities we haven't even dreamt up yet. Agents providing instant, important feedback such as: who came through the property, budgets and how motivated they are, is all now a reality. We have begun developing the next generation of new services on the back of this
new infrastructure.

Adelaide's push forward in this space shows that times have changed. Agents need to ensure they are focused on what the customer needs, and accept that this might be evolving along the way. Free Wi-Fi is now a given... At Toop&Toop we're asking: "what value-add is next?"

Suzannah Toop

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Thursday, August 15, 2013

Weird feeling.... something is brewing.

Something is happening out there. During the week I received a text from a client of mine who is a developer with information about the expected price break out in Sydney. My inbox has been receiving all sorts of different notes and comments about the market—record low interest rates and high clearance rates for auctions in Melbourne and Sydney. A client even sent me an article by Robert Harley headlined "Bondi apartments sell like hotcakes". It seems there is a mood swing happening.

All the Holden news, the unemployment talk and all the carry on by the politicians doesn't seem to have dented demand. In fact, the mood seems upbeat. This is unusual—usually the market stalls during an election campaign—and all that has occurred is that sellers have held back­­, not the buyers! Maybe it's the expectation of a change of government, or it could be the fact mortgage costs have met rental costs again in some sectors. Despite the gloom and doom, it feels like something good is brewing.

After so many tough years, softening prices and low stock levels, maybe the market is on the verge of a break out. South Australia has had so few new developments that we are in UNDER SUPPLY in Adelaide­; under supply is a feature of a boom, not a recession.

Back in the late '70s - early '80s, all booms and busts occurred state by state, and you could set your calendar almost at seven year cycles. In later years property cycles became National, and of course the latest property markets seem to have become global trending. 

So let's assume for a moment Sydney is heading for a full on boom or at least a price break out—South Australia will ultimately be positively impacted should that occur. Money in property investing is moving much more readily across boarders. SA is currently the most affordable mainland state, and as always, is seen as a stable place to invest in real estate. Buyers from WA are already pouring money into the state because they see our prices as cheap and under value. Superannuation funds and investors like our consistency and stability. We may miss the heady booms, but we also avoid the big crashes too—investors like that.

Buyers anecdotally seem to be getting anxious again; sales are happening off market and I think sellers are ready to transact again. Add these three dynamics to our election in early spring, record low interest rates, plus a chronic shortage of stock (properties to buy), it's shaping up to look like quite a crazy spring for the SA residential market. The big unanswered question is whether sellers will suddenly all dump their properties on the market in late spring—some sellers have been waiting years for a recovery of prices before they have another go at selling. If that happens, it may head off any chance of us seeing long awaited upward movement in prices. 

Toop's Tip! Sellers—don't leave it too late in spring to get your property on the market, do it soon (NOW) while supply is low and demand is hot.

Loving real estate… I think it's about to get a whole lot more interesting!

Anthony Toop

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Thursday, August 08, 2013

Risky business...

'Residents Outraged over Trashed House', was a headline article online last Monday that caught my eye. A house in Melbourne's west has allegedly been trashed by tenants who were evicted following a dispute with their landlord. The photos resemble a dump site, including a sofa mounted on the roof, an ironing board hanging from the front tree and rubbish strewn everywhere. The article states this appears to be an appalling act of revenge and has sparked shock throughout the community. As a landlord myself, this issue is a huge concern. Damage to property is a big risk owners face.

So why be a landlord, why take these risks?

As landlords there are things you can do to minimise your risk. In the first instance these include landlord insurance (in my view, a must) and selecting the right tenant for your home. Once under way with your chosen tenant, regular inspections need to be conducted and any warning signs should be flagged early.

To my way of thinking, it is clear attracting the right tenant is critical. Significant background research and not being too quick to take the first application has saved Toop&Toop's clients a lot of issues. Having 'Leasing Specialists' works better than generalist agents who try to be a jack of all trades, like Genevieve referred to two weeks ago.

Then once the right tenant is found and vetted, it's doubled checked by our specialist Property Management Team. By creating a two-step process of approval you have the benefit of rigorous discussion to ensure the best applicant is chosen.

Taking off my landlord hat, I have also experienced life as a tenant for seven years on the Gold Coast and in Sydney. This gave me a terrific insight into how much life is impacted by the quality of your leasing agent. For example, our requests for a working TV cable and a repaired blind in my bedroom to me seemed very reasonable, but fell on deaf ears. As tenants, we believed it would be simple to fix, but was turned into a massive stand off. It really impacted on our feelings toward our life in the home.

Having now been both a tenant and landlord, I can see the role of the agent is critical. As agents we understand there are two different views of the world that must be weighed up. Leasing agents should have an empathetic team working behind them who understand both points of view, but ultimately are working in the interests of the landlord. This will create an environment where the landlord comes out as the winner. The tenant will invariably care more for the property and be happy to accept more responsibility, minimising the landlord's risk.

Of course as agents we cannot always get it right…human nature can surprise the best of us. However, if your property is well managed, with empathy, you will have better tenants, paying more rent for longer…minimising risk. A win-win situation.

Suzannah Toop

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