Auction clearance rates fall ‘could mean house price slowdown’

Credit: WA Today

They have become much more popular in Perth but clearance rates at home auctions have taken a turn for the worse, according to new figures.

Analysis by property researchers RP Data show just five out of 35 properties that went under the hammer last week were sold. It followed just six out of 18 the previous week, and five out of 26 the week before that.

While the sample size was small, with Perth making up just 1.9 per cent of capital city auctions this year – a lower amount than the smaller cities of Canberra and Adelaide – the figures are a reversal of 65 per cent-plus clearance rates in the city earlier this year.

And the statistics follow a surge in interest in auctions in Perth, where the practice has historically been unpopular.

RP Data senior research analyst Cameron Kusher said clearance rates provided an “excellent indication” of market sentiment, far more so than private sales which were subject to time lags.

The total number of auctions remained strong, but along with lower housing finance volumes and easing consumer sentiment, the signs pointed to a property market slowdown.

Real Estate Institute of Australia president, and WA real estate agent, David Airey said the strength in the housing market earlier this year “is now almost non-existent”.

“Six (Reserve Bank interest) rate rises in eight months is unnecessary and has overwhelmed the market while it was still in recovery,” he said.

Realmark real estate director John Percudani said auctions were ideal in a Perth market where there was an undersupply of properties.

“In these… conditions where there is no doubt you will sell your home, it is more about ensuring you get the absolute best result,” he said.

“There are always three prices with every property, the sellers wish price, the sell price and the market price, and these generally vary widely.”

Many Perth agents struggled with not having an asking price on a property.

“The skills required to carry out no asking price selling requires some very specific marketing and strategy skills that not many agents are equipped with. Also I see sellers shopping properties around to the agent who guesses the highest price,” he said.

“This is flawed, the agent is not buying the home, in fact they’re trying to buy the listing appointment.”

Four Social Media Strategies that Work For Real Estate

Credit: Maverick Strategies
If we know one thing about today’s consumer, it’s that they are communicating online. According to the 2009 NAR Profile of Home Buyers and Sellers, more than one-third of home buyers looked online for properties as their first step in the home-buying process last year.

Developing a social media strategy allows agents to start conversations and interact with potential clients online without the pressure that comes with traditional marketing methods. While a balance of various types of traditional and new marketing methods is ideal, agents who spend time developing a solid social media strategy can build top-of-mind awareness for buyers when they start their home search online.

Whether you are new to the social media realm or are already interacting and sharing useful content, take a few moments to review these tips and best practices for maximizing your Web 2.0 plan from a recent REBAC Connection Webinar. It could make a lasting impact on your business this year.

1. Mix up your content. When deciding what content to share with your audience, focus on things that interest you. What sort of articles would you like to read? What would be useful for a buyer? Be consistent in the frequency of your usage, but try mixing up the means by which you post. Include a link to an interesting article about your local market one day and a video the next. And don’t forget to join already established conversations as well.

2. Avoid over-selling. Agents who find the most success in using social media to build their business avoid the standard sales pitch. Instead of posting properties for your buyers or spamming your audience, focus on becoming a trusted resource for your clients. Your online discussions should be similar to your elevator speech. Think of what you would say to a friend you see in the grocery store who asks, “Is now a good time to buy?”

3. Build your sphere of influence. Social media provides a simple means for building your sphere of influence. Once you decide on the vehicle that will work best for you, whether that is Facebook, Twitter, LinkedIn or otherwise, use the built-in friend suggestions and e-mail contacts to increase your connections. And the next time you meet with a potential buyer in the real world, be sure to tell them to connect with you online. This allows a client to get to know you on a personal level so you are the first one they think of when they are ready to buy.

4. Protect your privacy. The growth of social media has blurred the lines between sharing business and personal information. Fortunately, it also provides the opportunity to build your brand by revealing as much or as little about yourself as you wish. Take some time to edit your profile and security settings according to your preferences, and be sure to review your content so that you can be confident in sharing accurate information with potential clients.

Need inspiration? Look online!

Image Anne, Aimee and Nathans’ home in Sydney from The Selby

Credit: Aussiehomes.com

If you’re doing any kind of decorating, renovating or building, chances are you’re on the hunt for some inspiration. We used to have to rely on dog-eared magazines and books to keep track of ideas we wanted to try, but these days things are a little different.

Over the past few years the internet has become a fantastic resource for home design ideas. We’ve gathered together a list of some of our favourite online places to get a dose of inspiration. Some are blogs, some are forums, but all are guaranteed to give you a creative pick-me-up.

1. The Selby a voyeur’s dream. Todd Selby has the enviable job of travelling around the world taking photos inside people’s homes. He’s photographed hundreds of people from quirky Japanese toy company CEO’s to famed fashion designer Karl Lagerfeld. Taking a peek inside these creative spaces will definitely give you more than a few ideas.
2. Australia’s own home styling legend, Shannon Fricke has worked for magazines such as InsideOut and authored a number of best selling interior decorating books. Her blog is a great collection of interesting ideas, product information, tips and tricks and is perfect for people who are searching for their own style.
3. Apartment Therapy sets out to “help people make their homes more beautiful, organised and healthy” and this site definitely achieves it. Have a look through the pages and you’ll be amazed by the quality of the home tours (one of the most popular features), decorating ideas and tips that are on offer.
4. Unclutterer is a great resource for people that need a little help getting organised. The site features tips, simple strategies, product reviews and reader questions. If you need inspiration to solve storage and clutter issues around the home, you’ll find it very useful.
5. Design Sponge is one of the most popular online decorating blogs in the world. Started by Brooklyn-based writer Grace Bonney in 2004, it’s developed into a handy hub of home and product design knowledge. Grace and her team do a great job of featuring new products, sharing ideas for updating furniture and showcasing emerging designers. New posts are added daily so there’s always something new to see.
6. Holly Becker, a freelance journalist and design consultant, started Decor8 in January 2006. Since then, the site has grown to be a favourite of over 35,000 readers daily. This site is really helpful if you need ideas for the best ways to style a room or to keep up-to-date with new product releases.
7. For fans of architecture and furniture design, Daily Tonic is a site that features the best projects, products and materials from all around the world. While it’s specifically aimed at architects, interior designers and furnishing specialists, anyone with an interest in design and building trends will find it inspiring.
8. If you’re decorating and in need of some advice, Julie-Ann Hind’s Decorating Forum is a great site to bookmark. The conversation is always friendly, all the users are keen to help out and experts are more than willing to lend a hand to solve problems. It’s a great place to get help if you’re a decorating and renovating novice.
9. Cool Boom covers a range of topics from architecture to innovative new housing materials. The site has a decidedly European feel which makes it quite unique (the blog author is from Spain). If you’re daydreaming about your ideal home, and how you’d decorate it, this site will quickly become a favourite.
10. Lost at E Minor is a site that features trends in contemporary building. They tend to showcase a lot of unique (and quirky) case studies from international design firms. If you want to know what’s new, cool and a little bit unusual, this site will have it.

Do you have any favourite online sites for inspiration that you’d like to share? Leave a comment below.

Are the images on your website "lustworthy"? 5 Marketing Techniques Luxury Real Estate Agents Use

Credit: Influential Marketing Blog and Aussiehomes

Not all of us are in the market for a 40,000 square foot villa in the hills of California. In fact most of us probably aren’t, so the world of luxury real estate is one that seems like an exclusive mystery. It is a shame that few of us do get to experience this world, because when it comes to marketing there is a lot that anyone could learn from how luxury real estate and real estate agents in particular run their businesses. What they know about marketing and sales is based on what they have had to learn to make those multi-million dollar home sales. Here are just a few of the lessons you could take from the world of luxury real estate:

1. Focus on your personal brand to demonstrate credibility. One thing that just about every real estate agent does more than almost any other industry (apart from entertainment) is focus on their personal brands. Often you see the story of the agent’s career and how he or she made it to that point. You can read what they are interested in and how many medals of honor or salesperson of the year awards they have won. All of this is designed to give you a sense of who they are before you consider working with them. In the world of real estate personal branding has everything to do with your reputation … and that reputation is a big part of how you can get deals done.
2. Better target your communications to save yourself time. How many ads do you see for luxury real estate crammed into the yellow pages? Or through a banner ad on Forbes.com? Most advertising when it comes to luxury real estate comes from custom regional magazines, luxury publications and other highly targeted sources. Why? Because one thing that luxury real estate agents understand is that hitting the wrong consumers will result in one big downside: they will end up wasting their own time. So the advertising is a function of selection because they only want to reach people who are real prospects to potentially purchase a home from them. They don’t care about reaching millions or even about reaching thousands. They care about reaching the right dozen people, period.
3. Use professional imagery to sell. We generally know about real porn, and food porn, but luxury real estate publications are an entirely different category that could almost be called house porn. They feature lustworthy images of houses, villas and mansions that most people only dream about even walking into. And all of it is listed alongside a tantalizing price that would buy you the rights to claim ownership of that dream, if you had the money. The imagery sells the houses and encourages you to dream.
4. Promote the community you will be joining. When you buy a luxury property, you are not just buying your own property but also entry into a particular neighborhood and even a way of life. As a result, you want to know who else lives in the neighborhood and more about the community you will be joining. It may not mean you’ll be best friends or even interact with those others, but just knowing about the community and what you are part of gives you an important story that you can share with others and help you to feel a sense of belonging in the community which could be a powerful motivator to purchase.
5. Throw in an unexpected benefit/offer. One thing I love about luxury real estate is that the “freebies” are often completely unexpected and sometimes irrelevant things, but could sway the right buyer. For example, I saw one property listed where purchasing it would also mean that the title of “Count of Carbona” would convey to the new owner. So not only do you buy a new castle – you get to be a Count too. Another property offered up a garage full of exotic cars along with the house. When you are buying a luxury property, those small things may not add up to a significant portion of the cost, but could mean the world when it comes to helping a customer establish an emotional connection with a property based on more than just hard details like the bathroom count or location.

Some of these lessons are likely the same that other real estate agents use, but if any of you reading are working in the world of real estate, I’d love to hear your thoughts as well. What other marketing lessons do real estate agents know that other businesses could benefit from?

Cashed-up foreigners snap up homes

Credit: News.com.au

• Foreigners buy $14.9b in property
• Victoria most sought-after state
• Opposition calls for study

CASHED-UP foreigners snapped up $14.9 billion worth of houses and land in Australia last year, including $2.49 billion worth of existing homes.

The Federal Government refused to release but they were in a Foreign Investment Review Board (FIRB) report that was quietly posted online last week.

It shows the Government issued 4827 real-estate approvals to foreign investors last year for commercial and residential properties.

About half the approvals were for temporary residents wanting to buy a house as their principal residence.

A further 988 approvals were granted to investors to buy vacant land for residential subdivision or to build a houses, according to figures obtained by The Sunday Telegraph.

The report shows Victoria is the most sought-after state by foreign investors wanting residential real estate, followed by Queensland and NSW.

The FIRB granted 1562 approvals in Victoria, 1093 in Queensland and 956 in NSW.

But the figures are incomplete, because the Government changed the rules in April last year so foreigners no longer had to notify the FIRB if the property was to be their principal place of residence.

Under foreign investment laws, non-Australian residents can buy a dwelling for their principal place of residence.

The Government has been criticised for relaxing foreign investment laws, blamed for driving up house prices.

Although the Government announced last month that it would adopt a more stringent approval process, experts claim the latest changes will have little effect on the market.

Opposition finance spokesman Joe Hockey said it was clear that foreign investment was having an upward impact on housing prices.

“The Government has been all over the shop on foreign-investment rules in the past 12 months,” he said. “What is clear is that their rules making it easier for foreigners to buy real estate have put upward pressure on housing prices.”

Immigration-law specialist David Stratton said the new amendments focused on penalties for non-compliance.

“In one sense, little has changed: foreign residents can still purchase Australian properties and, in particular, people in Australia on temporary residence visas can still purchase existing dwellings,” Mr Stratton said.

Foreign-owned companies are allowed to buy second-hand dwellings to house their Australian-based staff.

A developer can sell an unlimited number of dwellings, either off the plan or newly constructed, to foreigners, provided the properties are advertised locally.

In 2007-08, the biggest foreign investment in both residential and commercial real estate in Australia was made by buyers from the US, Britain and the United Arab Emirates.

The following year, Singapore investors topped the list, followed by the US and Britain.

The Opposition has called for a comprehensive study of foreign real-estate investment.

Australian capital city house prices rise by 20 per cent in year to March

Credit: News.com.au

• Capital city house prices up 20pc on year
• Sydney, Melbourne up more than 20 per cent
• RBA will hike tomorrow, says Westpac
• Economist: House prices won’t implode

AUSTRALIAN capital city house prices have risen by 20 per cent over the year to March, latest government data shows.

The Australian capital city house price index, released today by the Australian Bureau of Statistics shows house prices rose by 4.8 per cent over the quarter alone, putting pressure on the Reserve Bank to further lift interest rates when it meets tomorrow.

However, some economists are cautioning against taking the ABS data at face value.

Westpac economists Andrew Hanlon and Elliot Clarke said in a note the ABS measure was “prone to overstating price swings” when there were shifts in the make-up of market activity.

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“Our preferred measure, and the measure watched closely by the RBA, the RP Data–Rismark series reports house prices up 12.7 per cent over the year to the month of March,” the economists said.

Today’s data shows Melbourne house prices rose nearly 28 per cent, Sydney house prices increased 21 per cent and Darwin prices increased by more than 17 per cent.

All capital cities posted double-digit growth over the year to March.

Brisbane, Adelaide and Perth had more measured growth with 12.1 per cent, 10.8 per cent and 15 per cent growth respectively.

Hobart increased 14.1 per cent and Canberra house prices jumped 20.6 per cent.

The ABS said Sydney and Melbourne were the main contributors to the average price of the eight capital cities.

“The strongest growth in these two cities came from established houses with relatively high prices,” the ABS said.

CommSec economist Savanth Sebastian told AAP there was nothing too surprising following five rate increases in the past seven months.

“Property prices are still seeing strong growth and it’s important to realise that this isn’t going to be solved by raising interest rates,” he said.

Market to cool off – ANZ

ANZ economist David Cannington said while momentum has remained strong, he expects house price growth to “moderate” over the rest of 2010.

“This will be compounded by ongoing reductions in first home buyer demand and the recent policy back flip on Foreign Investment Review Board rules,” he said in a note.

However he said the strong data proved the fundamentals of the housing market were tight, and demand continued to outpace supply.

“Solid market fundamentals and a positive economic outlook should keep house price growth in the black,” Mr Cannington said.

Rates will rise tomorrow – economists

Westpac said price momentum in 2010 had been “resilient”.

“Recent strong auction clearance rates suggest any cooling off in housing markets has been marginal, at least for those parts of the market that see properties sold via auction.”

Mr Hanlon said there was concern over house price resilience in the face of rising interest rates.

“Rising interest rates will become a headwind as the year progresses,” he said.

“The RBA hiked in March and again in April, taking the standard variable mortgage rate to 7.15 per cent.”

Westpac expects the RBA to hike interest rates when it meets for its monthly board meeting tomorrow.

Using Social Media Marketing As A Real Estate Agent

Source: Best Social Media Marketing Tips

The face of marketing in the real estate world has changed along with the trend of every other business in the present and will be the only medium that people turn to in the future of marketing. Social media marketing is not new and it is hotter than ever. It is a growing day by day and needs to be paid attention to.

For an established agent in the real estate market you may think you have gotten by all right without it but you need to do more than just get by. Whether you are first starting out or been in the business for years you need to make sure that you have a pulse on the current trend to stay with the current market for your growth and for new clients to find you. Ignoring the fact of the importance of social media marketing is a risk you should not be willing to take.

Getting started with world of social media is easy when you know what to do. If you do not have the technological skills to do it hire those who do. Find a way to get into the pool even if you do not know how to swim effectively. Here are a few tips on the road of getting started.

Website: Most people are on a website for their real estate needs but you should also have a website built that is for the community or areas that relate to your business. But it does not have to be about real estate. If you build a site that will benefit the community and give information that people use for contacting one another then you can add your business information in it as well soft selling your reason for the site. Giving more than you get always equals a positive influence on your community and people will respond to it.

Blog: Using blogging to reach people is also a great idea. You are able to choose a topic that you are passionate about and get a following. Say you specialize in reverse mortgages. Blogging about it and reaching the community with talking about walking your parents through a reverse mortgage, for example, will help those who are going through it. These certain subjects that relate to your business are a great way to go.

eNewsletters: Using an eNewsletter is the one of the easiest ways to use social media marketing. Sending out a weekly or monthly viral newsletter about topics pertaining to current issues can benefit and spark the readers to view it. Place your company information at the bottom so people know where to find you but use the newsletter to talk about other things. Join the chamber of commerce and soft sell your business while networking just like everyone else.

Join Forums: Finding forums is another great way to get out there in social marketing. You can talk about related issues and give advice. Add a link to your conversations to ensure people can find you if they want to but talk on the forum because you care and give advice to those who need it.

The social media marketing that you effectively use will build your business and increase your lead potential. Using Medias such as Facebook and Twitter are also very effective. Use a Facebook that is exclusively for business purposes if you have a separate personal one.

Rate Rise? Here’s a $1,000,000 clue…

Credit: Sean Cussell’s Blog

THIS little worker’s cottage in Coppin Street, Richmond, tells the story of Melbourne’s booming housing market.

It is also a glaring example of why financial markets think the Reserve Bank board will hit home buyers with another rise in interest rates today.

The house sold for $1 million at auction on Saturday, almost double the $533,000 its owners paid just five years ago and more than four times the $218,000 it sold for in 1996.

The free-standing weatherboard has a courtyard garden, two bedrooms, one bathroom and overlooks a neighbourhood green. A young professional couple beat three other bidders, with help from the parents.

”Richmond used to be known as Struggletown because it was so down and out,” agent Chris Murphy of Hocking Stuart said. ”Not any more. Now people are struggling to buy in and a million bucks is almost the norm for a comfortable house.”

Saturday’s result in Coppin Street was hardly isolated; figures released by the Australian Bureau of Statistic yesterday confirmed that Melbourne has led the latest phase of the property boom around Australia.

The ABS said capital city house prices rose a record 20 per cent in the year to March. Melbourne prices were up 28 per cent for the year and 6.7 per cent in the March quarter alone.

The rises, combined with new figures showing a record monthly jump in commodity prices, prompted financial markets to revise their outlook for today’s Reserve Bank board meeting, with a rise in rates now a probability.

Based on the latest ABS figures, The Age has calculated that Melbourne house prices have soared 563 per cent since the index began in 1986, meaning that a house that cost $100,000 in the late 1980s now costs $663,000. By contrast, disposable incomes have climbed just 210 per cent.

Some economists yesterday expressed doubt about the reliability of the ABS measure, preferring to place weight on privately compiled RP Data figures that show Melbourne prices up 19 per cent in the year to March.

The ABS house price index can overstate market movements because it includes only sales of fully detached houses in metropolitan areas, and excludes terraces and townhouses. Detached city houses generally lead price gains.

”But whatever way you look at it, this will concern the Reserve Bank,” said Macquarie Bank interest rate strategist Rory Robertson. ”The economy is doing well, house prices, share prices and now commodity prices are trending up and rates are below average. It looks like they’ll move.”

BT economist Chris Caton agreed, saying ”even though the ABS measure is not the bank’s favourite, a 20 per cent national increase in house prices is very difficult to ignore”.

After the release of yesterday’s housing and commodity price figures, financial markets lifted the likelihood of a rate rise from 55 per cent to 70 per cent.

A further rate rise of 0.25 per cent would add another $48 to the monthly cost of repaying a $300,000 mortgage, bringing the total extra cost since October to $235 a month.

Property adviser Monique Sasson Wakelin said the Coppin Street house was typical for Richmond, where first home buyer grants had helped to stimulate demand. ”A house like that will characteristically double in value every seven to 10 years,” she said.

”The fact that it’s almost doubled in the space of five years is a direct function of the first home buyer grants that have caused a domino inflationary effect in the market.”