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Nov 17, 2023
A Tale of Two Sales Campaigns
We recently had the privilege of managing the sale of two properties, A and B, both nestled in the same location and bearing striking similarities. However, the variation in their sales campaigns highlights the difference in how strategic decisions can affect the outcome. Property A: A Transformative Journey When the owners of Property A expressed their intention to sell, we embarked on a comprehensive evaluation of its condition. Despite having a renter and furnished lease, the property, dating back to its 2005 origins was in its original state. After careful consideration and consultation, the owner opted to vacate the property. This decision paved the way for a transformative process, including painting, new carpet installation, and strategic staging. The property was then listed on major real estate websites like Domain and REA. The results were impressive - a successful campaign that culminated in a sale above the asking price within just two weeks of launching. The proactive approach to presentation and accessibility proved instrumental in attracting potential buyers. Property B: Lessons Learned On the flip side, Property B, also occupied by a renter, opted to proceed with the sale with the renter still in place. This decision, while financially practical, presents challenges. The renter, though tidy, had configured one bedroom as a home office. Prospective buyers struggled to envision it as a bedroom, often referring to it as a studio. This limitation, connected with access issues, and the actual tenancy length, impacted the property's market appeal. After a period on the market with lukewarm interest, a decision was made to serve the renter a notice to vacate. Subsequent improvements, including painting and carpet replacement, were undertaken to enhance the property's overall presentation. Navigating the Tenancy Dilemma We acknowledge the financial implications of keeping a property empty and understand why some owners opt to sell with a renter in place. However, this decision can present challenges ranging from cleanliness and presentation to access issues. In certain cases, the tenancy agreement itself can shape the success or failure of a sales campaign. Property owners must recognize the potential impact on the sales price, as a poorly presented property may signal desperation, attracting lower-than-desired offers. If you find yourself at the crossroads of deciding whether to sell with or without a renter, consider seeking advice from our team. Our insights will prove invaluable in tailoring a strategy that aligns with your specific circumstances, ensuring a successful and lucrative sale. Written by Elli Blanco
Nov 3, 2023
Have you heard of Passive House?
Australia is witnessing a surge in sustainable construction practices, and leading the charge is C Street Projects with their groundbreaking development, Echo, in Hawthorn. Echo promises not just a modern luxury but also a commitment to a sustainable, energy-efficient future for its residents. At its core is the internationally acclaimed concept of Passive House construction, a game-changer in energy-efficient building. So what is Passive House? Originating in Germany, Passive House construction is gaining global recognition for its energy-saving potential. Now, Australia is embracing this approach, and C Street Projects is at the forefront with their Echo development. Passive Houses set a new standard for Australian construction, showcasing the synergy between luxury living and environmental responsibility. Here are some of the key features: Energy Efficiency: The design significantly reduces energy consumption through insulation, airtight building envelopes, and energy recovery ventilation. Superior Comfort: Residents enjoy consistent indoor comfort year-round with minimised temperature fluctuations and excellent air quality. Sustainability: Eco-friendly materials and energy-efficient systems minimise the project's carbon footprint. Financial Savings: The design leads to cost savings on energy bills, making it an appealing financial choice for residents. As the popularity of Passive House construction grows in Australia, we can expect more projects like Echo to transform our cities. These developments offer both luxurious living and sustainability, improving residents' quality of life and contributing to a greener, more energy-efficient future. If you're curious to experience the Echo project firsthand, don’t hesitate to contact me to arrange a tour and see the future of sustainable living for yourself. Written by Peter Hannon Partner & Auctioneer
Aug 11, 2023
NIMBY - NIYBY - NIABY
Earlier this week, our team had an impromptu debate about the impact of a new “Sobering Up Centre” to be opened down the street from our Collingwood offices. The area is gentrifying - rapidly. Helped along by one developer in particular, who just happens to have a luxury “mansions” development in the works directly across the road from the new Sobering Up Centre. Questions and opinions bounced around the room. Will the centre have a negative impact on property values? Is this the right place for a Sobering Up Centre? What is a Sobering Up Centre? I don’t know about you, but I hadn’t heard the term NIMBY until fairly recently and candidly, I quite like it. The first time I saw it written, I was mystified as to what was meant. It was used in the context of the current (permanent, really) housing shortage and referenced the perceived double standards of a certain Queensland MP in opposing developments within his home suburb whilst simultaneously calling for more development elsewhere. This somewhat paradoxical ideology is not entirely uncommon when it comes to matters that are literally and metaphorically “close to home”. It is, however, entirely problematic for resolving some of the bigger societal issues critical to functioning modern cities. We can see this thinking evidenced in attitudes toward renewable energy infrastructure. People might advocate for green energy and acknowledge the climate crisis yet oppose the construction of wind turbines or solar farms in their local community, fearing decreased property values or degradation of scenic views. Similarly, public transportation is, at least notionally, uniformly considered by the community as an eco-friendly and traffic-reducing solution. Still, many residents are prone to oppose the construction of a new rail line or bus route near their home, citing concerns about noise, property value, or crime. I go to a gym in the city and discovered early on Monday morning that an entire row of car parks across the road from the gym had been lost to an expanded bike lane…I was outraged! Yet, at dinner parties, will extol with great gusto that “they’ve got it right in Amsterdam”... just to be clear, I mean the bikes. And by “dinner parties”, I mean eating dinner with my wife and kids in our kitchen. Affordable housing, crisis accommodation and homeless “shelters” fall into the same category. Though we recognise the grave issues that necessitate these types of accommodations, when proposals arise to build low-income housing developments in certain neighbourhoods, residents tend to rail against them, fearing it will impact property values or change the character of their community. Likewise, proposals to build shelters or transitional housing are frequently opposed due to worries about increased crime and safety concerns. Our local council recently declared itself a “nuclear-free zone”, which I’m sure is a relief to residents that feared the construction of an AUKUS submarine repair facility on Sydney Road. However, within the energy sector, nuclear is very much back on the table for experts that realise a “clean and green” transition to a sustainable renewable energy future is going to prove challenging without alternative options. If there’s one thing Australians like less in their suburb than wind turbines, level-crossings, bike lanes, homeless people and drunks, it's anything nuclear. We’re all NIABYs when it comes to nukes! The problem remains; we need all of the above, at least some version of them. So, if not here - then where? I’m lucky enough to own property very close to the proposed Sobering Up Centre, and I’m fine with it. If that means someone is less of a danger to themselves and the public - that’s good, right? There are things on the list above that I’d be less cool about opening up on my street, but and it’s a big BUT, we’re all going to have to be OK with some of this stuff in our “hoods” if we’re going to keep enjoying living in this pretty great society, we’re lucky enough to live in.
Aug 4, 2023
Selling your investment property while tenanted?
As a landlord in Victoria, you may be feeling the pressure of recent interest rate increases, prompting you to consider selling your investment property and exploring other opportunities. If you find yourself in this position, it's important to be aware of the challenges and potential pitfalls associated with selling a property while it is still occupied by a tenant. Current laws in Victoria stipulate that the tenant must be given proper notice of the intention to sell the property. This notice can be provided at any time during the lease, whether it is a fixed-term or month-to-month agreement. It's crucial to remember that the tenant has the right to give only two weeks' notice to vacate the property without any penalties. Additionally, you are required to give the tenant at least 24 hours' notice of entry prior to any marketing activities, such as taking photos or creating floor plans. Please note that such activities should be conducted between 8 am and 6 pm, and the tenant may object to having their belongings photographed, which could present an issue during the sales process. During the sales campaign, the tenant is entitled to compensation for half a day's rent or $30, whichever is greater, for each open house inspection. However, sales agents are limited to conducting only two open house inspections per week. One of the challenges in selling a tenanted property is the condition in which the tenant maintains it during the sales process. According to the law, tenants are not required to make any special effort or incur expenses to enhance the property's appeal to prospective buyers. They are only obligated to maintain the premises in a “reasonably” clean condition. The presentation of the property may vary depending on how organised and tidy the tenant is. Although there are financial challenges of not having a tenant in place during a sales campaign, it remains more cost-effective than selling a property in poor condition, considering the adverse effect it would have on the sale price. To avoid such a scenario, I recommend that your sales agent visits the property and discusses the sales process with the tenant. This is to see if the property will be presentable for a sales campaign and if the tenant is willing to cooperate. Surprisingly, many tenants are more than willing to assist in making the process as seamless as possible. Offering a small financial incentive to the tenant can go a long way in fostering cooperation. Remember, a well-presented and cooperative property can yield better results in terms of sale price and overall buyer interest, making the temporary financial sacrifice worthwhile. If you have any further questions or concerns, please do not hesitate to reach out to me or your real estate agent for guidance and support throughout the selling process. Written by Elli Blanco
Jul 7, 2023
Methods of Sale - Maximising Efficiency and Effectiveness
In this article we're going to delve into the exciting world of buying and selling, but don't worry, we're keeping it short and sweet. We're going to explore the differences between three common methods - auctions, private sales, and expressions of interest. So grab a comfy seat and let's get chatting! First up, auctions! Picture this - a room filled with enthusiastic bidders, an auctioneer with a rapid-fire cadence (check out our newest auction video on our socials), and that unmistakable thrill in the air. Auctions are like a rollercoaster ride of emotions, where properties go to the highest bidder. It's an adrenaline-fueled battle to secure that prized possession. Whether it's a house, artwork, or even a briefly seen storage locker (have you seen storage wars?!), auctions offer a dynamic and fast-paced experience. One key advantage of an auction is transparency. The bidding process is open for all to see, eliminating any doubts about fairness. Plus, the competitive nature can drive up prices, potentially leading to a higher sale value. However, auctions can also be nerve-wracking. If you're not a fan of public pressure or the intensity of bidding wars, you might want to explore other options, which we will discuss. Next, let's talk about private sales. Ah, the more laid-back alternative. Private sales are like a cosy fireside chat between the buyer and seller, without the crowd and excitement of an auction. This method typically involves direct negotiations and a more personal touch. With private sales, buyers have the opportunity to negotiate prices, terms, and conditions directly with the seller. It's a more relaxed atmosphere where you can take your time to discuss and evaluate the property without feeling rushed. Plus, you may avoid the potential stress of competing against other buyers. However, it's important to note that private sales may lack the transparency of an auction, as negotiations happen behind closed doors. When the main demographic of potential buyers for a property requires certain conditions to make an offer, such as first home buyers who often need their offer to be subject to finance, the Private Sale method is often the best option. This allows for greater flexibility and accommodates the specific needs of these buyers, ensuring a higher likelihood of a successful sale. Last but not least, we have expressions of interest. Think of it as a mix between an auction and a private sale. Expressions of interest involve potential buyers submitting their offers or proposals within a specified timeframe. The seller then reviews the submissions and decides which offer to accept. This method allows buyers to make their best offer without the pressure of an auction. It also provides a level playing field for all interested parties. However, unlike private sales, you don't get the chance to negotiate directly with the seller. Instead, you must put your best foot forward in your initial submission. So there you have it, a simple breakdown of the differences between auctions, private sales, and expressions of interest. Each method offers a unique experience, catering to different preferences and circumstances. Whether you're a thrill-seeker, a fan of one-on-one negotiations, or someone who enjoys a balanced approach, there's a method that suits you. Remember, the agent will advise what works best for you and your specific buying or selling needs. So take your time, consider your options with the agent, and embark on your journey armed with the knowledge of these different approaches. Happy bidding, negotiating, or submitting offers, and may your transactions be smooth sailing! Written by Jess Wilking
Jun 30, 2023
Two Trick Pony
Australia's recent ranking of 19th out of 64 countries in the World Competitiveness Yearbook report is further evidence of our over-reliance (dependence) on digging things out of the ground and importing people to prop up the economy. While the country excels in life expectancy and health coverage, its position in entrepreneurship (62nd of 64) and productivity (46th) is alarming. A preoccupation with immigration and reliance on China’s consumption of our natural resources has hindered Australia's ability to foster innovation and diversify its economy. What does this mean for Australian property? World Competitiveness Centre director Arturo Bris in discussing the results of the report, noted that “resource-rich countries – and Australia is one of them – are naturally more productive… However, the challenge for resource-based economies is how to translate such efficiency into prosperity, for example, how to make people’s lives better”. Professor Bris emphasised that countries like Australia must transform efficiency into prosperity through sound policies and institutions. To achieve this, Australia should look to nations such as Switzerland and Singapore, which have successfully built highly productive economic models without significant natural resources. Innovation, particularly in the fields of quantum computing and medical research, could unleash new possibilities and fuel economic growth. The Federal Government’s National Quantum Strategy, announced in May this year, is the type of initiative Australia should be pursuing to realise innovative economic diversity and growth. Still, at a maximum investment level of $1b AUD, it fails to signal genuine intent to succeed. By investing more heavily in research and development, Australia can position itself at the forefront of technology and attract global talent and investment. Australia's heavy reliance on commodity exports exposes its vulnerability to fluctuating global markets. The Committee for Economic Development of Australia highlighted the need to diversify the economy beyond traditional trade strengths. The recently formed AUKUS pact provides an opportunity to strengthen defence capabilities, promote advanced manufacturing, and create high-skilled jobs. By investing in industries such as aerospace, defence technology, and renewable energy, Australia can foster further innovation, reduce dependencies, and secure its economic future. Australia possesses world-class healthcare and research institutions, making it well-positioned to lead in medical research and development. By increasing investment in this sector, the country can nurture groundbreaking discoveries and attract global investment. We witnessed Australia’s capacities during the research, development, and production phases of COVID-19 vaccines. Subsequent investments in mRNA capacities (particularly the Victorian State government) are, as with quantum computing, the right moves, but not at a sufficient level to be considered much more than lip service. Australia has the potential to become a global hub for biotechnology and pharmaceutical innovation, fostering job creation and strengthening its competitive position. Immigration is a divisive and complex issue, one I’m not qualified or capable of distilling into a neat “for” or “against” position in a 500-word (ish) blog piece. On the issue of housing, however, at least in the Victorian context, I have some insights. The simple supply/demand equation demonstrates to real estate agents, renters and buyers, on a daily basis, that there are currently too few homes for the number of people needing to be housed. Matt Barrier, CEO of Freelancer, speaking recently at The Sydney Morning Herald Sydney 2050 Summit, described how he sees Australia’s approach to immigration as it relates to property: “The US uses quantitative easing to drive ‘easy, relentless’ growth — Australia uses quantitative peopling…This is not about ‘growth’ but inflating demand for housing. It’s not about the ‘economy’ but inflating GDP. But population growth does not increase GDP per capita.” These are pretty incendiary observations, and there are plenty of counter-arguments to Mr Barrie’s view. The central observation, however, that we, as a country, have an increasing demand for housing is unequivocal. In order to realise the innovation and economic diversification proposed above, we’re going to need plenty of smart and skilled people from around the world to work alongside the smart and skilled people already here. We’re also going to need somewhere for them to live… this continues to be the core issue for housing accessibility and affordability in this country and one that our governments (past and present) continue to fail to address adequately. Written by Jacob Caine CEO
Jun 9, 2023
It’s Hotter Than You Think!
One of the biggest myths in real estate is that Winter is a bad time to sell. Actually, the opposite is usually true, and that’s especially the case this year. Let me explain. Selling in Winter is actually advantageous for vendors in two ways. Firstly, there is typically a lower number of homes for sale in Winter (because of the myth!). What that does is tighten up supply, and that strengthens buyer competition for the homes on the market. Buyers who want or especially need a new home do not stop looking because the weather gets cold! Secondly, if your strategy is to buy your next home after you’ve sold your existing one, then selling in Winter means you’ll be ready to buy in Spring – when there are usually a lot more homes for sale. These two advantages are present every year, but in 2023, the supply/demand advantage is magnified. This is because we’re at a point in the market cycle when stock is already very low, data from Domain and realestate.com show total listings are down 30% on historical averages, which means buyer competition will be even stronger for the homes available for sale during Winter this year. The market is now absolutely on its way back after a correction with buyer demand clearly increasing, stock levels are not yet improving. This creates great selling conditions, with auction clearance rates in Melbourne up to well beyond the 70% mark and climbing! So, we see a great opportunity for sellers to do very well this Winter in the suburbs with particularly tight supply, so if you’re thinking of selling this Winter, get in touch today! Written by Toby Campbell
May 26, 2023
It's Tax Time
The big news in property this week was the Victorian Budget and the introduction of new land tax measures, with the land tax threshold to be cut from $300,000 to $50,000. Of the 860,000 investment property owners in Victoria, 380,000 have not been subject to land tax before. For example, a couple who owns two properties in Victoria, one being their home and another being an investment apartment with a site value of $120,000 would not be paying any land tax under the current schedule of land tax rates. Under the new land tax measures, from the 2024 land tax year, they would become subject to a fixed land tax charge of $975 per year in relation to the apartment, which would apply on top of existing costs. The Real Estate Institute of Victoria (REIV) has criticised the land tax increases announced in the State Budget, saying they will only worsen the current rental crisis facing Victorians. In recent years, we’ve observed a lack of investor activity within our marketplace, largely due to an array of legislative policies and increasing costs that have made property investment a somewhat unattractive proposition. Unfortunately, the tax measures introduced in the latest Victorian budget are likely to further diminish the appeal of investing in property, which will only exacerbate the tight rental market. As always we would love to hear your thoughts on the matter or answer any questions you may have regarding the possible impacts to your investment. Written by Peter Hannon