Real estate is a confidence game
By Haesley Cush
In the back half of May I have been as busy as a one legged tap dancer. It seems like everyone has waited until after the April public holiday fest to start their auctions. I’ll call 70 auctions in the last two weeks of May.
I am still seeing great pockets of value in the market. But it’s not always located in the places people are looking. In fact, it’s because people aren’t looking there that the value exists.
The cheapest I’ve seen so far has been $197,000 at the Ray White Ipswich auctions last Friday. The property was located at 5 Countess St, Eastern Heights. A quick snapshot for those looking for value, we are talking about a 759sq m block, a zoning that is favourable to townhouses and close to local schools. Bidding opened around $100,000 and most of the five registered bidders battled it out before the property sold under the hammer. Ipswich is still offering great value and from my conversations with Deanne Ramsay from Ray White Ipswich, their vacancy rate is low and there are active tenants in the market.
Around the inner city of Brisbane there has been some great sales too. Last Saturday I sold a beautifully renovated home at 122 Alexandra Rd, Clayfield. Presented to perfection. The home offered an amazing open plan which spilled effortlessly out to the outdoor area where it looked like they’d taken a hair brush to the blades of grass.
A massive crowd was in attendance with three bidders battling it out and the property sold under the hammer for $1.750M. The sub $2M market for a finished home in the sought after Brisbane inner city is also faring quite well.
This is mainly because inner city unrenovated houses are hotter than a seatbelt in summer, build costs for high end properties are getting quoted at $3k per metre and when you add those prices together it’s cheaper to buy than build.
It’s the $2M plus market that I think is offering some value. The Brisbane prestige market started to show some green shoots early this year with some high end thumpers selling and record prices being reported.
But that market is best described as warm as opposed to hot. I still feel this is where a lot of value exists in the market. $2M is such a psychological benchmark for buyers and sellers. Once you get past it as a buyer the competition thins out dramatically.
Value in a market comes from finding the places where competition doesn’t exist. Real Estate is largely a confidence game and competition breeds confidence. It’s the well researched buyers who make offers in the absence of competition that tend to find the best buys.
The risk when making a low offer or bid on a property is that the owner will take it, so at a fair price there’s no risk. If they won’t it’s a simple ‘no’. If they will, then you are rewarded for your tenacity. It doesn’t sound that risky to me!
I hear people complain regularly about the cost of housing, but have they really looked, are they informed and are they making offers? If the answer is no, then they need to hold their tongue, work out their budget and what they want.
Then head out to the areas that meet their requirements, not the reported hot spots or places they are familiar with. They might be surprised where they end up and what they end up with.
Haesley Cush is a licensed real estate agent and award-winning auctioneer, based in Brisbane. He’s been working the gavel since 1996. He regularly travels Australia and New Zealand working with Ray White agents, seeing first hand how the various markets move around the country. He’s personally been involved in more than 20,000 real estate transactions ranging from humble homes to some of Australia’s best real estate.