LOOK ON THE BRIGHT SIDE

It’s no secret that the Perth real estate market is no longer booming. Naturally, everyone is constantly trying to pick that silver bullet that will fix everything and make the tough times go away. Many were hoping an interest rate cut was the answer, unfortunately it’s not that simple.

But let me put things into perspective. Sure the market is not an easy place but the news isn’t all bad. If you’re a buyer, the news is actually quite good. The market is full of choice and affordability has made a come back. The cost of money is starting to drop as indicated by the first cut in interest rates and buyers have the time to make informed decisions. Put simply, right now there is an abundance of opportunity out there for buyers. The challenge for buyers maybe the availability of loan funds although the Federal Governments $4 billion initiative last week will greatly assist funds liquidity for housing.

We are truly witnessing a buyers market and to be honest, it is probably about time they had a fair go and actually good for market fundamentals. Boom time pushed the Australian Dream further and further from the reach of many people and while Perth is by no means a ‘cheap’ place to buy, prices have corrected and there is value to be had. I see this continuing well into 2009.

However like all things, this buyer friendly market won’t last forever. The fact is this is simply a normal part of the property cycle and in time things will again turn in favour of the sellers, it’s the way the cycle works. World economic factors may distort and prolong the cycle timing but it will re-align itself.

While things are not going to dramatically change in the near future, Perth is poised for change. The following factors indicate that a strengthening of the market is on the horizon.

1) The dropping of interest rates is always the first trigger – the first sign of the ‘curve’ in the property cycle.

2) Demand for housing continues to accumulate as people move into the state looking to capitalise on the employment opportunities.

3) Another key factor is employment, all signs point to continued employment growth in WA. Security of employment encourages buying confidence.

If you understand the property cycle, you will understand that what we are going through now is completely normal and somewhat predictable. Trust me, I have been in this industry for a long time and I have seen it all before.

New Realmark Corporate Website

I'm very proud and pleased to announce that our new realmark.com.au website has been launched this week. This new website has a fresh, contemporary look inline with the brand positioning of Realmark and introduces a number of key advantages for our clients.

I invite you to view the new realmark.com.au.

Buyers no longer fear auction

Here at Realmark we have seen a noticeable lift in auction activity over the past month. Realmark auctioneers held five auctions held over the past two weeks. All have had bidders, with one selling under the hammer, one selling on the day and offers written on the other three which are still pending negotiations. All auctions drew an impressive crowd.

So why is this? Well sadly I don’t think it is because all of the property markets woes are over. I am also certain it doesn’t have anything to do with the Reserve Banks announcement of interest rate cuts.

I think it all comes down to the buyers.

In Western Australia the idea of the auction is relatively new, us sand gropers have always been far more comfortable with the private treaty sale. Many thought the auction was reserved for the multi-million dollar mansions scattered throughout the western suburbs. The auction was something that normal West Australians simply weren’t used to.

However our eastern counterparts have a long history with the auction, believe it or not, they think the private treaty sale is a little strange.

So what has changed in WA? I think the buyer has changed.

Today’s buyer is far more calculated and knowledgeable than the buyers of boom time. Buyers today are well informed when it comes to price and they want to negotiate in an honest, transparent environment. They don’t want sales spin, they want the facts. The auction provides all of the above and hence, they seem to be coming.

Don’t get me wrong, it is not as easy as sticking up an auction sign and buying a hammer, auctions have to be done right. But I believe the current market has spurned a new breed of buyer, and they are not afraid of an auction.

So what is the morale of the story? Simple. If the buyer has changed, we as agents need to change too. Boom time is over, its time to adapt.