Thursday, March 26, 2015

Traditional... but even more valuable than ever

This year Suzannah and I decided Team Toop would sponsor The Advertiser's Annual Property Guide – a lift out magazine in this Saturday's Advertiser. As 'Gen-Y's', Suzannah and I have grown up with technology. Innovation is at the heart of Toop&Toop's culture, and we are well known and awarded in the industry for this. So from the outside it may seem odd for Team Toop to be so heavily aligned with such a traditional publication. But here's the thing... The 2015 Property Guide has done all the hard work for you, by compressing and analysing all the masses of information that is just too overwhelming to trawl through online.

There is no denying that buying, selling or renting out your property is a major decision. On average, people spend 20 to 30 years paying off their home. So before making any decisions, it is smart to research your market and do a little homework on exactly what the trends are, and have been, in your area.

As a property nerd, I have been hanging out for the new guide since last March, and I 100% believe it is a 'must have' tool for anyone looking to buy or sell property, or start an investment portfolio this year! The Advertiser's Annual Property Guide is essentially a year's worth of A+ homework compiled for you!

With interest rates at all-time lows, vacancy rates at the lowest we have personally seen and market conditions strong, the guide gives a concise recap of the past year in property for those who want to take advantage of the exceptional buying conditions! The information that is supplied in the book can offer some extremely valuable insights into what is happening (and what has previously happened) in every single SA suburb!!

Having technology at our fingertips and the internet ensuring real estate statistics are so readily available, it could be easy to look past this guide with the mentality of 'looking it up online later.' But trust me; if you're serious about transacting in the property market, you are going to wish you kept the Property Guide!

Understanding exactly what this information is saying is key to unlocking a huge amount of market knowledge and intel that you can use to make truly educated decisions and feel confident in your buying, selling or investment strategy.

So what do these red and white lines of statistics and information mean and why are they so important?

Firstly, having every suburb in SA consolidated into one magazine is so valuable if you are a buyer who is not necessarily looking in a specific suburb. You may be looking for a specific type of house, or features like four bedrooms, but have a few different areas in mind. The Property Guide makes it easy to compare these suburbs and their short and long-term results to gauge and predict how the area will fair for capital growth and what sort of prices you can expect to pay.

The median house price is generated by looking at every house sale in a particular suburb over the year and taking the middle price. This is the most recognised and representative indicator of typical selling prices over time and can give you a solid understanding of current house prices in the suburb.

How does your suburb compare? A quick way to gauge how a suburb is comparing to the rest of SA is to look at the ranking column – this column takes the change in median value over the last 12 months and ranks the suburb compared to the rest of SA. Investors, if you have properties in the top 10, these areas are experiencing massive capital growth right now and could be a great chance to take advantage of this and look at selling, and buying up in the new up and coming areas.

Change in Median (5 Years and 10 Years) is a very useful column for those in their primary place of residence looking to sell or those looking for a new family home. This information gives you an insight into the medium and long-term capital growth from the past and gives you some indication of what to expect in the future. The long-term view is more balanced and neutralises the peaks and troughs that can occur in a market.

Vendor Discount is a really important figure for both buyers and sellers to look at. For vendors, it is an imperative figure to understand when working on your sale strategy with your agent. This figure gives insight into past seller experience from the last year in your suburb. It is derived from the first advertised price of a home (which legally needs to be the higher of the agent and vendor selling figure), compared to what the property actually sold for. So for example, if you see that an area has a -4% Vendor discount, this means that the average property sale in that suburb sold for 4% less than the prices that were originally mentioned in the marketing. The reason this is important to understand, is that when you see current listing property prices in your area online you may use this as the basis of your sale expectations, but it doesn't necessarily mean that this is what they sell for and you could run the risk of losing the initial impact of your campaign to buyers if you don't look at this vendor discount figure and take it into consideration.

Right now, Adelaide is THE hot spot where it seems everyone is focusing their attention for the next property cycle. We are the most affordable mainland city in Australia with strong and stable rental and capital returns, making Adelaide a safe option, even for the conservative investor.

So, locals who are looking to buy or sell; the Property Guide can give you the inside story and is a great way to equip yourself to recognise the best opportunities in the Adelaide property market. We believe this tool is extremely valuable to customers, which is why we have supported the publication this year and why we have 2,000 extra copies being delivered to our offices on Monday... to provide to anyone coming into the market throughout the year that wants to get up to speed quickly! 

If you have any questions about buying or selling, or would like one of our team to help talk you through what all of these statistics mean, or even if you would just like an extra copy of the guide, make sure to give one of our team a call... they would love to help! 

Thursday, March 19, 2015

Proud and parochial... we are rocking.

South Australia has been recognised again this year as the best marketers in the country. This is not for being spin doctors, but as technology innovators for strategic and sophisticated marketing (communication) systems. 

Genevieve and I were in Perth last weekend for the National Real Estate Awards. After going head to head with the big players in Australia, we were thrilled to bring home the 'biggie', the 2015 National Communications Award. Chatting to agencies and businesses on the night, our unique 'off market' marketing channel, 'The Vault' is generating a lot of interest as it creates significant cost savings for our clients with confidentiality and 'speed to market' capabilities like nothing seen before. It was a great night and our team were extremely proud to be up there representing SA against the best of the best.

Being over in Perth, we did unfortunately miss the last weekend of the Fringe Festival. We were there for four days and what a beautiful city – there are stunning beaches everywhere you look. But I have to say, I did miss the buzz of Adelaide.

Think about the other goals we South Australians are currently kicking. With record numbers of over two million people, the Adelaide Festivals have lived up to their reputation again this year, with a 20% increase in attendance. This energy has clearly been infectious, as people are out and about everywhere. It's not just limited to Mad March now, there are more and more pop up bars and restaurants appearing across the CBD throughout the year.

Living and working on the fringe of the city in Norwood, I must admit, I don't get into the city as often as I would like but when I do, there are so many new places to go. With the new planning and liquor licencing laws that were introduced in 2013, the city of Adelaide is constantly changing. These days it's not uncommon for people to keep a running list of 'must visit' Adelaide restaurants and bars, as we don't want to forget restaurant recommendations made by friends and family.  

So I'm thinking, what impact is all this activity having on housing prices in the city and what yields can investors expect to see now in the 'new look' CBD? 

When comparing the city to the eastern suburbs, property is still very affordable with a median unit price of $385,000. Investors buying a 3 bedroom unit in this price bracket will achieve a rental price of around $450 per week! The yields are extremely strong and the affordability of the CBD market creates great opportunities for investors. 

Whilst we are starting to see a few new developments pop up across the city, the potential to jeopardise these returns with over supply is not to the extent 
as seen in Sydney and Melbourne due to our thorough planning regulations in the CBD.

According to an article in Property Investor Magazine, the SA Deputy Premier has noted the initiatives underway could increase the population in the CBD from the current 22,000 to 50,000 residents. With 69% of renters already living in the city, this would create further demand. And it makes sense... Tenants are quite happy (and actually enjoy) a short walk into work and we are finding they are loving the flexibility of being able to leave the car at home as they run errands or catch up with friends.

This is reflected in what our team are seeing, as they are receiving over twice as many quality rental applications for the CBD than two years ago. This clearly shows that there is a trend towards tenants moving back into the city to live as they want to enjoy the buzz and excitement that is around the place and also the convenience. 

So if you are looking to invest, keep an eye on all the developments happening across the Adelaide city. It's not just Mad March anymore; Adelaide CBD is becoming a permanent hot spot for renters. 

Team Toop are passionate about how good our hometown is, and it's with good reason: We love this place.  

Suzannah Toop

Thursday, March 12, 2015

Team Toop are excited to represent SA in Real Estate's night of nights!

This week we are heading over to Perth for the 'Oscar Awards' of Real Estate; the Real Estate Institute of Australia's Awards for Excellence. At the time this goes to print, Suzannah and I will literally be half way between Adelaide and Perth, full of nervous and excited energy as we gear up for the awards night. 

Toop&Toop are representing South Australia in three of the largest awards for excellence on the night; Marketing & Communications of the Year, Innovation of the Year, and the most prestigious award: Australia's Large Agency of the Year. To the Eastern States, SA may be seen as the underdog but we are really pumped and looking forward to seeing where we benchmark against some of the biggest agencies in Australia.

Like the Oscars, these awards are the highest accolade in our industry. All of the entrants have been put through their paces and have truly deserved their title as Australian finalists by winning the award at the state level. 

Toop&Toop have been entering and winning awards for as long as I can recall. Even as a child I remember Mum and Dad getting all dressed up and Suzannah and I telling them to 'break a leg' as they drove off to various award nights. 20 years later, I now know why it is engrained in our culture and why it is so important. Awards keep us driven and accountable to always think of how we can improve and do things even better.  

One thing that irritates me when I hear about a company winning awards, is not knowing why they have won. Personally, this is the part that is  so interesting to me, and often you never actually get to find out. So I wanted to share why we are 
National finalists...

Marketing & Communications of the Year
We won this award in SA for our unique approach to marketing our client's homes. The way we are structured with our own in-house fully serviced Advertising Agency allows us to offer our clients professional photography, property videos and personal property websites. This is all at very cost effective prices, which attracts large numbers of buyers to our clients' homes. Last year we also developed an 'off market' marketing channel, 'The Vault' which is an Australian (possibly world) first and is 100% unique to Toop&Toop clients. It has been just over 12 months since we launched The Vault and with over 2,500 registered VIPs (Very Important Purchasers), we are getting exceptional sales results for clients before a property even hits the public market! 

Innovation of the Year
We won the SA Innovation award for our Toop&Toop Wellness Centre. The Real Estate Industry is known for its 24/7 nature, and across Australia the burn out rates in the industry are very high. We introduced our Wellness Centre, with a full time Wellness Centre Manager to help our team manage the pressures of the industry and help to create a sustainable long-term career. It has been 12 months since we introduced this innovation and we are seeing a huge difference in the team culture and energy levels and this is transferring through to our service to clients. 
It has been so exciting to introduce something that our team can truly benefit from and is making a difference in not only their lives but flowing through to our clients who are seeing the benefits as well. 

Large Agency of the Year 
We were so honoured to win this award at the state level as it truly encapsulated and recognised the power of Team Toop. This award was about our 123 people, from all different departments, in all different roles, working together as one team. Having Property Management, Sales, Marketing, IT and Administration across seven offices in SA all working together on the same systems and all communicating with each other in real time is unique in real estate and it can not easily be done. We are seeing the power of this team work first hand through the results we are achieving for our clients and the extra levels of service we are able to offer. 

For us, the WHY is exactly what the awards night is all about. Suzannah and I couldn't be more proud to be in Perth representing such an amazing team. One thing these three awards have in common is that they are all team awards. We have so many talented people who make up Team Toop and hard work has enabled us to be national finalists in three categories... something no other agency in SA has done!! So to Team Toop, a big thank you for all of your hard work this year – you have made us proud and hopefully we can make SA proud and shake things up at the Nationals!!

Thursday, March 05, 2015

All eyes on Adelaide.

With the recent rate cuts, the property market is a popular topic of conversation as everyone is trying to gauge where the economy is sitting. There is plenty of negative media talk about Adelaide's economy right now, but let's take a look at the facts.

Fact: Investor activity is at an all-time national high.

The property market ran hot throughout the Christmas/New Year period and we are yet to see 
it step down a gear. Investors are out in full force and it is taking home buyers longer to find the right property due to the increased competition.

So what are the experts reporting? Looking through Core Logic's latest market information, it is interesting to see the stats come through for 2015 which clearly 
shows what investors, agents and buyers have been feeling in the market.

A staggering piece of information that stood out in this report is that investors have reached their highest value and proportion of loan commitments on record. Currently, loans to investors make up $11.7 billion which is just under half the value of all loans. With data spanning back to 1994, this means nationally we are experiencing more investor activity than we have seen in 20 years. Investors are out in full force across the nation which risks pricing first time buyers out of the market.

Chatting to my Melbourne contacts, there is an emerging trend of young professionals living interstate now turning their attention to better priced markets. They are looking to buy their first investment here in Adelaide 'just to get into the property market'. This means they are happy to rent their own home in Melbourne, as they can afford to get what they are after... the right suburb, and a big home. The twist is that they are now considering buying an investment property here in Adelaide. Their logic is to ultimately be able to realise the equity in their Adelaide property in a few years' time to enable them to buy something in their home state. Essentially, in this way buying counter cyclic is recognising the potential Adelaide currently offers investors... and I can see why!

With a median house price of $430,000, Adelaide is now the most affordable mainland capital city. Melbourne sits at $613,000 and Sydney at $850,000 so it's little wonder first time interstate investors are looking elsewhere. Although it's not just affordability – Adelaide is still to experience the upswing when analysing the stats. Adelaide's 12 month capital gain is 2.9% when our 10 year average is 3.7%. This suggests we are nowhere near the top of our cycle.

Sydney on the other hand, has experienced a 13.8% increase in values in 12 months, where their 10 year growth average is 4.6%. That's an enormous amount of activity being generated in 12 months and experts are saying this level of growth cannot be sustained.

So what are the rents doing in Adelaide?

Unlike Melbourne and Sydney where new apartment buildings are popping up almost monthly, Adelaide has the lowest Annual Dwelling Approval of all major capital cities.

Supply of new dwellings is now gaining pace interstate. Melbourne and Sydney have three to four times the number of new buildings coming through than Adelaide. The introduction of new supply on a large scale is likely to create downward pressure on rents as tenants have choice and are in a stronger bargaining position as landlords compete to attract tenants.

More good news... Adelaide is outperforming Melbourne and Sydney in gross yields and speaking to Melbourne agents last weekend, they are feeling 
it. Swapping stories on how the market is tracking this year, they were genuinely shocked that tenants in Adelaide are offering above the asking price just 
to secure a rental property.

And there is more... If the experts are right and we see another two rate cuts this year, there will be more stimulus to investor activity. Cash deposits represent such poor returns while property offers potential for reasonable rental return. Plus, in Adelaide in particular, it is reasonable to expect a strong capital gain period.

We are therefore expecting to see an increase in interstate buying in Adelaide as these other markets become inaccessible.

Adelaide is in their sights. We are geared up to help investors in South Australia run their properties, so be certain to call us. Investing in property is in everyone's sights, so let's work together!

Suzannah Toop