Are we there yet?

I had the good fortune to attend a recent presentation by Gavin Hegney, a local property expert, you have probably heard him on 720 radio.

Consider Gavin's opening words, "recovery usually happens when we don't feel it". Makes sense, if we look at the share market, it is up 50% since the GFC and yet sentiment is still weak.

Gavin is reasonably upbeat about the property market future, he suggests fundamentals are improving in WA, whilst sentiment is lagging behind.

Fundamentals such as rental vacancies, population growth and employment are suggesting positive outlook. Gavin shared how in the last cycle eastern states money was a big reason for the WA property growth and he predicts this will happen again as WA is starting to look more affordable, with strong fundamentals. Interesting at the crest of the WA slump, WA was the least affordable in Australia, now we are the most affordable again.

In the meantime WA remains slow, Gavin suggested the number of listings is artificially high, he proposes that 10-20% of these are subject to sale and will soon come off the market. He also believes 2 in 3 properties are overpriced and this correction will come either as reduced prices or removed from the market.

So are we there yet? According to Gavin we are in for a 3-4 year recovery phase which will see modest growth at around 4-5%.

As for tips of where to buy, consider this "8 in 10 people are looking for a home", his lesson is buy where people want to live, can't argue with that.

Interest rates stay on hold

In its first meeting of the year today the Reserve Bank opted to keep rates on hold at 4.75 per cent.

The decision comes on the back of economic data out last week showing inflation was running lower than expected.

The official interest rate is now 4.75 per cent. Mortgage holders on variable interest rates are being charged a standard variable rate of about 7.83 per cent by their lenders.

Today's decision will be a boost to the opening of this year's property market, which is just starting to ramp up now that the summer holidays have officially ended.

Glass 1/2 full

Maybe I'm an optimist but surely the flip-side to this release is that over 55% will not delay purchasing property. 

Based on my recent customer experience, what the market needs is movement so people can sell theirs to then buy another. I have 4 prospects waiting to sell their homes to buy a change of life in Bindoon.

Media release distributed by AAP Medianet.
Australian Home Buyers Delay Major Purchases into 2011
Property, new cars, holidays on the backburner, Homeloans research shows
A poll released today by mortgage provider Homeloans Ltd shows that almost half (45 per cent) of Australian home buyers will delay purchasing a property in 2011 due to rising interest rates and the cost of living. And one in three of those will put all major household spending such as a new car, holiday or consumer goods on hold for 2011.

Lessons from recent Real Estate Rural Network conference

I attended the REIWA rural network gathering last Friday and was pleasantly surprised by what I managed to pick up. I thought I'd jot down some prompts to recall some of the outcomes for future research:

1. Small Landholders (by definition 1 to 100 ha) by Dept of Ag, Neil Guise.

• Neil shared interesting research on small landholders, which by the way is no small group - some 60,000 in WA (versus 6,000 commercial farmers). Apparently 95% of the small landholders are there for lifestyle reasons (no surprise) and 80% would like the farm to be viable but here's the catch within time constraints. I totally understand that - I explored a number of options with our farm but to be honest, despite my marketing knowledge all roads kept coming up against hard manual labor, which to be honest I'm just not built for that. But I haven't given up - lets face it, these are the dreams that keep it exciting as you look across a few acres and wonder what could be. I did come away inspired to plant lime trees - maybe one day.
• He shared information about the foodlink program which is of course very commendable and a great start to helping niche players find a market. At this years show they showcased 8 WA niche success stories; from bananas to honey all very positive. I particularly liked the local Gingin success story Fruity Fanatics, frozen fresh fruit - having great success with school canteens as a new healthy choice. I wish I thought of that one.

2. Food security presentation by Stuart Clarke from Ag Dept.

• Stuart provided some great insights into how to have a win against the power of the supermarkets and the sobering facts of food inequality across the globe.
• He had these 3 words of advice for farmers: 
• Create
• Capture
• Defend value

3. Juliet Grist from Rural Financial Counselling Service WA

• Juliet provided a very impressive presentation on the role of the service in helping farmers in need. She warned of a tough year ahead and the need to be ever so professional and honest when dealing with farmers when dealing with the stress of poor harvest and financial frustrations. 
• Key lessons included;
• understanding the holding cost of property
• retirement & handover issues (no one wants their kids to take-over and the importance of off farm activities & skills
• the importance of professional marketing plans (banks will step in if they can do a better job of marketing the property)
• she pleaded with real estate agents to provide meaningful appraisals as it often takes months to undo unrealistic expectations. She stressed it shouldn't be about winning the sale but managing expectation.
• possibility of chemical fallow which is proven to increase the value of future harvests
• "homesteading" - potential for farmer to keep 200 acres if emotional attachments
• She shared her 4 point plan; 
• Calm the situation - listen, empathise
• Provide clarity - some people can't see the wood for the "tree" in front of them.
• Back up plan
• Awareness of personal factors - for e.g. maybe they don't want to farm anymore.
• Focus on de-personalising the plan - giving them control, providing regular updates - keeping them constantly informed.
• Mental health awareness - above all Juliet shared the importance of understanding your clients mental position as well as farm position and don't leave it until it is too late to refer to the Financial counselling service. Which reminds me I must connect Global Mindscreen with this service.

4. Disclosure and prudence:

• Update from landgate on "land interest" enquiry database. All very positive and hopefully they will spend some time with REIWA to ensure they are integrating these new tools into the way we currently prepare disclosures etc. 
• Afternoon finished with a legal presentation on the importance of prudence when selling property with no mortgage given recent case in City Beach of stolen title. I think they have made the right decision that the title is always upheld, otherwise it would be mayhem but yes definitely worth staying alert for such circumstances.  I imagine higher risk in lifestyle properties where people may hold title and are not always living there. Certainly is a good case to keep a mortgage - even if only small to avoid the risk of your lawyer stealing your title:)

Summer Sale!

Price Slashed by $60,000
Bindoon, 200 Gray Rd
Lot 26, 4.94 acres only
$245,000

Reduced for the summer season. You can pick up a beautiful 4.94 acre block, fully serviced for only $245,000. (Power, phone, water, fencing, gates and crossover in place.)

As a local you know that city people are less likely to buy a country property during the off peak summer season, so this is your chance to grab a bargain;  buy it as an investment property or maybe a friend or relative is looking to move here.

The block offers the convenience of the Bindoon Townsite, only 2kms down the road and yet looking across the creek through a privacy screen of trees, it provides the perfect rural retreat with views of vineyards and more.

Call me! You know at this price it wont last. Offer closes 31/1/2011.

Tree Changers moving into the hills

Interesting article on the growth of the Perth Hills. "The hills are alive with property buyers Sam Saffioti, Principal Licensee, Roleystone Real Estate, 07/10/2010"

Our community and family

Not surprisingly half of the respondents to my survey were retirees.

The challenge moving forward will be to retain these elders in our community, especially as we recognise the benefits of  embracing the extended family. I know of at least a dozen families who have moved to this area to be near their parents. It certainly played a key role in my decision to move here.

To retain our elders we need more medical facilities and retirement housing solutions which thankfully the shire has earmarked as a key strategic project for the future. I agree it is certainly a worthwhile goal for our residents and surrounding regions as we offer the perfect downsizing retirement option. 

For many residents they go to perth as little as possible - if we can minimise the trips for routine medical requirements all the better.  Let us celebrate and welcome our new arrivals Dentist, Pathology and hope this is the start of a long list of services coming to our community.

FINANCE - THE RULES CHANGE FOR RURAL

I spoke to my Mortgage Broker, Shane Abbott, The Mortgage Gallery to find out the latest finance issues.

If you are thinking of purchasing rural property as an investment, for a tree change or a hobby farm there are lending issues you need to understand first.

Banks treat rural property differently to standard sized properties, therefore you need to take the time to review all the lending issues before you make any moves in the market.

A majority of the banks will only lend at standard rates to properties 50 hectares and under. Anything over this, and it is considered a commercial transaction and as a result you will have to get a commercial loan.


If you are looking at buying BEFORE you make an offer you should sit down with a broker like Shane and be absolutely clear about your specific situation.  You can contact Shane on 0419 196 446.

Selecting the best country escape. Is big best?

No doubt the size of your budget will play a role but lets take a look at the 3 key factors you'll have to weigh up as you make your decision:


1. Distance to Perth
2. Size of acreage
3. Quality of home

1. Distance from Perth.
Unless you are planning to do the commute daily, or you need to put your children on a bus to high school, I'm not sure an extra 10-15 minutes really makes a big difference. So think carefully before you pay a premium to be south of Bindoon. The extra 15 minutes could buy you more land,  which you may prefer over time.
2. Size of acreage.
You can bet your life you'll always want more so big is better. Having said all that I've heard retirees complain that it is too big for them to handle. Whilst size is important, the real driving issue is privacy.  I have a friend on 7 acres and I swear you feel like you are on 50 because the trees are positioned such that you can't see your neighbours business.
3. Quality of home.
Chances are you’ll be out enjoying the great outdoors so you may not need all the luxuries of a city dwelling. For example a small kitchen might be easily compensated by a big outdoor kitchen.   Ability to extend might be attractive.

That's all great in theory but as we all know we don't always buy with the head. 
What's your hot button?
For some it is horses, others wildflowers, birds, bushwalks and more.
For me it was all emotional; the views and having access to Brockman River - the idea the idea of water running through the property did it for me.

I’d love to hear what others believe is the best mix. Or help you find the perfect escape for you and your family.