Understanding auction-speak
Understanding auction-speak
Posted on Wednesday, September 18 2013 at 3:37 PM
Auction lingo is confusing potential buyers and putting them at a disadvantage, according to one buyers’ agent.
Patrick
Bright of EPS Property Search says buyers need to recognise the terminology
used by auctioneers to understand the auction’s progress.
“Like many
professions, real estate has its own language and terminology that is often
intimidating and confusing to outsiders.”
Bright says the
terminology is designed to elicit a response from potential buyers, but if they
read between the lines, they can use auctioneering terms to keep track of the
sale.
“At an auction, the
auctioneer wants to run the bidding up as fast as possible, taking big rises
and using their bags of tricks, jargon and one-liners to maintain the bidding momentum.
“If you don’t
understand the environment or the language being used, then it can be quite
intimidating.”
Trevor Matthews, an
agent and auctioneer with Matthews Real Estate, says he’s seen buyers go into
auctions unprepared for what was about to happen.
“I
think it’s just some people are totally unfamiliar with auctions and have no
idea. There can be difficulties for people who have trouble with normal colloquialisms,
let alone auction lingo.
“I’ve
announced a reserve price has been reached at an auction and then had someone a
few minutes later ask, ‘Has the reserve been reached?’ after I’ve already
announced it.”
Matthews
says the auction process is now fairly transparent.
Auctioneers
will announce they’re seeking the vendor’s advice when the bidding hasn’t
reached the reserve, or make it clear when they’re bidding on behalf of the
vendor.
He
also says auctioneers won’t generally accept small bid increments when they’re
well below the expected reserve.
“The
only time I’m interested in $1000s or $500s is when the reserve has been
reached.”
Matthews
says buyers should attend a few auctions to see how they run before they bid on
their preferred property.
EPS Property Search compiled a list of common
auction terminology and how best to interpret it during the sale.
“I’ll only take rises of $50,000 or more” means the
bidding is a long way short of the reserve price.
“First call! Second call!” If this is said before the reserve is met then the auctioneer is
attempting to get another bid by provoking the fear that you’ll miss out if you
don’t bid now even though the property isn’t yet on the market. Once it’s been
announced that the reserve has been met it means if you don’t bid now then it’s
very likely that you’ll miss out!
“I’ll refer the bid” This is when bidding has stalled below the reserve and the auctioneer
needs to talk to the selling agent to apply pressure to the vendor to lower the
reserve price in the hope of making a sale under the hammer.
“I am selling” or “we’re playing for keeps” means the
property is on the market and the highest bidder at the fall of the hammer will
become the buyer of the property.
“I’m making a vendor bid of….” This is used if no one will make an opening bid or if the auction has
stalled and the bidding is a long way from the reserve. The auctioneer makes a
bid on behalf of the vendor to kick-start the bidding.
“I’m confident it will be sold under the hammer.”
It can be just a one liner, however it usually means
the selling agent has received decent pre-auction offers from buyers who are at
the auction, or the auctioneer has been advised by the selling agent that it’s
a really low reserve.
“Last opportunity” The
auctioneer is about to pass the property in so bid now if you want it. Or, if
it has passed the reserve, it means that the property is about to be sold to
the highest bidder.
“I’m happy to take rises of $500” The bidding is close to the reserve or the property is about to be sold
and the auctioneer is milking the bidders for a bit more.
“There’s real value here today buyers” The auctioneer is trying to encourage bids when none are forthcoming.
“We think it’s worth more” The selling agent has over-quoted to the vendor to get the listing, or
the bidding is a long way from the reserve or a combination of both.
“We’re selling today!” Typically an attempt to get you to bid when the reserve hasn’t been met,
but not all the time. If you hear that phrase always ask ‘has the reserve been
met?’ as some auctioneers use that term once the reserve has been met but most
will beforehand. Your chance of bidding against a dummy bidder is high prior to
the reserve being met and the property being called “on the market”. In 99 per
cent of situations you’re better off not bidding until the reserve has been
met.
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WA landlords reminded to lodge security bonds
WA landlords reminded to lodge security bonds
Posted on Tuesday, September 17 2013 at 4:34 PM
Landlords in Western Australia are being reminded to lodge new security bonds following changes to the tenancy laws, which came into effect in July.
Consumer
Protection says there’s a transition period for existing bonds, which will need
to be transferred to the Bond Administrator by December 31, 2014.
The
reminder comes after a Port Hedland landlord was recently fined $800 for
failing to lodge a tenant’s bond of $2200.
Commissioner
for Consumer Protection Anne Driscoll says the Residential Tenancies Act, which
governs the handling of bond money, is designed to safeguard the interests of
tenants.
“Changes
to the law now require all new bonds to be lodged with the Bond Administrator
at Consumer Protection immediately. Bonds on existing tenancies still being
held in a trust or other accounts will need to be lodged during the transition
period,” Driscoll says.
“The
requirement that the Bond Administrator eventually holds all bonds in trust
ensures that the money won’t be misappropriated and will help reduce the
disputes that often arise between a tenant and landlord over the return of the
bond at the end of the tenancy.”
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House prices continue to grow
House prices continue to grow
Posted on Wednesday, September 11 2013 at 2:28 PM
Capital city property markets continue to rebound and median prices in most centres increased over the June quarter, according to the latest Bendigo Bank/Real Estate Institute of Australia (REIA) Real Estate Market Facts report.
While the housing sector recovery is well and truly under
way, REIA president Peter Bushby says the uplift isn’t across the board.
The combined median price across eight capitals grew by 3.3
per cent for houses and 2.6 per cent for units and other dwellings in the three
months to June.
“The weighted average capital city median house price is now
$549,898 with Sydney, Melbourne, Brisbane, Adelaide and Darwin all contributing
to the increase,” Bushby says.
“However Perth and Canberra both dipped and Hobart recorded
the biggest drop.”
Those few dips aside, the result shows that markets are
continuing their recovery phase after most bottomed out around the middle of
last year.
Compared to this time in 2012,
the median house price for capital cities is up 6.1 per cent and, with the
exception of Hobart, went up in all capitals.
Melbourne had the biggest jump
over the past year, up by an impressive 8.4 per cent, Bushby says.
“There was mixed news for
investors too over the June quarter, with median house rents for three-bedroom
houses decreasing in most capital cities. Darwin had the only rise and there
was no change in Perth or Hobart. However, compared to the June quarter of last
year, Darwin and Perth had large increases in median rents for other dwellings,
up by 18.6 per cent and 12.2 per cent respectively.”
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New government lifts consumer sentiment
New government lifts consumer sentiment
Posted on Thursday, September 12 2013 at 11:20 AM
A new government combined with low interest rates, rising asset prices and the Aussie dollar appreciating again has skyrocketed consumer sentiment.
The Westpac-Melbourne Institute of Consumer
Sentiment increased by 4.7 per cent in September, which took the
index to 110.6, its highest reading for almost three years.
A level above 100 means the
number of optimists outweighs the number of pessimists. Sentiment is now 12.7
per cent higher than it was a year ago.
The key driver, according to
the survey, was the election outcome.
“Consumers like certainty and
the election outcome eliminates the uncertainty around who will govern the
country,” a Commonwealth Bank statement says.
The cash rate is also at a
record low, which means low mortgage repayments and the ability to repay debt
quicker or obtain cheaper new debt which, in turn, is encouraging more
investors back to the market.
“Asset prices and in
particular house prices have been trending higher over recent months. This is
welcomed by homeowners. Rising house prices improve confidence by strengthening
household balance sheets through a lift in net worth.”
Sentiment was up the most in
Victoria (13.1 per cent) but in a sign of good things to come for Queensland
and South Australia, both states recorded improved sentiment. It was up by 7.4
per cent in the sunshine state and 6.3 per cent in SA.
On the other hand, consumer sentiment was lower over the month in New
South Wales (down 2.9 per cent) and Western Australia (down 0.8 per cent).
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Eastern seaboard high-speed rail a key to decentralisation
Posted on Wednesday, September 11 2013 at 11:10 AM
A high-speed rail (HSR) system between Sydney, Melbourne and Brisbane could be strategic in alleviating capital city infrastructure pressures and decentralising communities, according to a PRDnationwide research report.
The
High Speed Rail
Property Report is a comprehensive look at how the proposed
HSR system could affect the property landscape along Australia’s east coast.
The
second phase of a Federal Government study into HSR was released in April this
year.
It’s
anticipated that the HSR network would comprise about 1748 kilometres of
dedicated route between Brisbane, Sydney, Canberra and Melbourne. Trains would
run at an average of 300 kilometres per hour on a dedicated track.
Aaron
Maskrey, director of research at PRDnationwide, says the HSR could prove
critical in alleviating future pressure on existing capital city amenities,
despite the estimated cost of around $114 billion.
“Population
forecasts for metropolitan centres in Australia indicate that unless we
facilitate change, there’s going to be an enormous strain on (the) infrastructure
and amenities of our capital cities to accommodate growth,” he says.
“The
proposed high-speed rail project can potentially serve as the catalyst for
changing the face of public transport for the whole eastern seaboard, reducing
congestion on our already bulging highways and crowded airports, and offering
commuters an alternative means to live and work.”
The
report says the 11 regions that should benefit directly from HSR are South
Brisbane, Gold Coast, Coffs Harbour, Port Macquarie, Newcastle, north Sydney,
South Sydney, Canberra, Wagga Wagga, Albury Wodonga and north Melbourne.
The
system could be the catalyst for creating new non-metropolitan business
districts, Maskrey.
“We
may see business, health and industrial precincts pop up as companies consider
relocation along the HSR to reduce operating costs and increase accessibility too
for their clients, suppliers, staff or patients.”
Tony
Brasier, managing director at PRDnationwide, suggests locating stations next to
capital city international airports to bolster the country’s reputation as a worldwide
business hub.
Brasier
says rather than spending $20 billion on the Sydney Airport upgrade, the funds
could be put toward a HSR connection between Canberra Airport and Newcastle
Airport, which would reduce congestion at the Sydney facility.
“Recent
estimates of the cost of a new Sydney Airport have been quoted as in the
vicinity of $20 billion. This could go a long way towards funding a Canberra –
Sydney – Newcastle HSR as a first stage to a Brisbane – Melbourne service. Anyone
who has experienced high-speed rail between Hong Kong and Shanghai airports and
their respective city centres will appreciate the impact it could have on
efficient airport accessibility.”
The
Commonwealth Government report on the HSR claims it will provide journey times
that would be competitive to the airline industry, allowing for the
complications of check-in and security at airports.
“Travel times between Brisbane/Gold Coast and
Sydney and between Sydney and Melbourne are less than three hours for the inter-capital
express services and up to 3.5 hours for the
inter-capital regional service.”
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Housing affordability improves
Housing affordability improves
Posted on Thursday, September 05 2013 at 12:06 PM
The proportion of family income required to meet loan repayments has dropped by 1.2 per cent – the best since 2003, according to a recent report.
The Adelaide Bank/REIA Housing Affordability Report
showed 28.7 per cent of household income was required to meet loan repayments
in the June quarter of 2013. This is the lowest recorded drop since the June
quarter of 2003.
All states and territories,
apart from the Northern Territory, recorded an improvement in housing
affordability with Queensland showing the largest improvement dropping by 1.9
per cent to 26 per cent.
The data showed New South
Wales was still the least affordable location to buy or rent with more than
34.3 per cent of household income required to meet loan repayments.
The ACT was the most affordable
at 16.4 per cent required for loan repayments and 14.5 per cent required for
rent.
Despite the improvements in
affordability as well as seven interest rate cuts since November 2011, the
report also highlighted that the number of first homebuyers made up just 14.6
per cent of the owner-occupier market – a figure which normally averaged 20 per
cent.
In addition, the total
number of loans increased by 21 per cent over the June quarter.
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Rising stock levels signal seller confidence
Rising stock levels signal seller confidence
Posted on Thursday, September 05 2013 at 1:27 PM
An increase in Australia-wide listings indicates sellers are more confident about the property market, according to one analyst.
SQM Research has
released figures showing a rise in national stock levels during August of 2.6
per cent to a total of 360,414.
Year on year, the country still recorded declines in listings in every
capital city besides Brisbane and Darwin, but it appears sellers are becoming more
bullish about property, according to the release.
In Sydney, the 9.1 per cent increase in stock
numbers during August indicates sellers are becoming less desperate, according
to the SQM report.
“This rise may reveal that vendors are beginning to make their move.”
Louis Christopher, managing director at SQM Research, says along with the
traditionally busier spring-selling period, improved vendor confidence will see
even more stock come onto the market.
“Potentially with more confidence instilled in the national economy,
vendors will be encouraged to place their properties on the market.”
Chris Gray, director of
property consultancy Your Empire, believes the statistical rise is too modest
to indicate a trend, but from his on the ground experience, seller confidence is
improving.
“With the election out
of the way next week, that should help, spring should help… so you’d hope that
there would be more properties on the market.”
Gray says a rise
in listings, in his opinion, will fuel value gains.
“The more property
that comes on, more buyers will be around as well and there’ll be more capital
growth and I think it will just kind of spiral and then hopefully just keep
pumping the market.”
Gray is certain
recent price rises are likely to continue in real estate.
“The tip for
buyers is, we’ve been telling them to buy for the last few years anyway, I
think it’s going to get harder and harder week by week.”
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Owning property easier now than 10 years ago
Owning property easier now than 10 years ago
Posted on Wednesday, September 04 2013 at 10:51 AM
It’s getting easier for investors and homeowners to buy and hold property, with housing affordability improving over the past two years thanks to falling interest rates.
The proportion of income required to cover mortgage
repayments is now down to 28.7 per cent, which is the lowest it has been in a
decade, according to the Adelaide Bank-Real Estate Institute of Australia
(REIA) Housing
Affordability Report.
All states and territories recorded improvements over the
past quarter, REIA president Peter Bushby says, with the exception of the
Northern Territory.
Queensland property in particular is very affordable right
now, Bushby says. The proportion of income needed to meet loan repayments
dropped by 1.9 per cent to 26 per cent.
“No doubt, the seven interest rate cuts since November 2011
have played a role,” he says.
“The variable interest rate fell in the June quarter, from
6.1 per cent to 5.9 per cent, which is a decrease of 0.7 per cent compared to
the same time last year. The (average) three year fixed rate fell by 0.3 per
cent over the quarter. It’s 0.9 per cent on the same period in 2012, sitting at
5.1 per cent.”
He adds the Australian Capital Territory is still the most
affordable state or territory due largely to higher incomes there.
New South Wales remains the least affordable state, with the
proportion of income required to meet loan repayments 5.6 percentage points
higher than the nation’s average.
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Investors set record in rush back to the market
Investors set record in rush back to the market
Posted on Monday, September 02 2013 at 11:31 AM
Property investors are returning to bricks and mortar – and in a big way.
Around 49.5 per cent of home
loans processed in New South Wales last month were for investors, according to
mortgage broker company Australian Finance Group. This is the highest level of
investor activity the company has ever recorded for any state. Other areas
around the nation were also strong, with investors comprising of 36.7 per cent
of new home loans processed in Victoria, 35.8 per cent in Queensland, 32.9 per
cent in South Australia and 28.4 per cent in Western Australia.
General manager of sales and
operations Mark Hewitt says $3613 million worth of loans were processed in
August, which is higher than the record-breaking figure of $3608 million in
May.
“With property prices
starting to rise and rates set to remain low for a while yet, a lot of
investors are anticipating the next property cycle,” he says.
“The New South Wales figure
is very strong, but in part this is because two thirds of first homebuyers
exited the market after the withdrawal of buyers’ grants.”
Along with unprecedented
levels of investor interest, New South Wales saw the average mortgage size
break through the $500,000 barrier for the first time, to $505,000. Fixed home
loans are also becoming more popular, with 26.1 per cent of new loans now
fixed. This suggests many borrowers are locking in part or all of their loans,
in anticipation of the next rate cycle turning, Hewitt says.
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Cost of housing – different but same
Cost of housing – different but same
Posted on Wednesday, August 28 2013 at 4:38 PM
It might seem like house prices rise and rise but those with a mortgage today still spend the same proportion of their income on housing costs as they did in 1994 and 1995.
The Australian Bureau of
Statistics has released a Living Conditions report on the proportion of
income spent on house costs and says the proportion remains at 20 per cent.
The report also found lower
income households had lower housing costs per week on average, but these costs
represented a greater proportion of household income.
Lower income households with
a mortgage paid $314 per week on average, or 26 per cent of their gross weekly
income on housing costs. But landlords seem to be winning in cheaper areas,
with lower income households renting from a private landlord paying about $295
per week, which represents 30 per cent of gross weekly income.
Since 1994 to 1995, the proportion of households that owned their home
outright dropped from 42 to 31 per cent. Those with a mortgage increased from
30 to 37 per cent and households renting have increased from 18 to 25 per cent.
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