No Comments

How It’s Done: House Valuation in Melbourne

While there are plenty who claim expertise in the art of valuing homes, the reality is that it’s a little more complicated and less predictable than one might think.

Recent news highlights Australia as having some of the priciest accommodation in the world. As a nation with an iconic property market, it’s no surprise how the topic of house valuation has slowly integrated itself into the average Australian day. Even among non-homeowners, estimating the selling price of houses has become a sort of hobby; many attend auctions despite not having any intention to bid for a property.

While there are plenty who claim expertise in the art of valuing homes, the reality is that it’s a little more complicated and less predictable than one might think.

House Valuation: Location, Housing Features & Circumstance

The basis of house valuation predictably involves the essentials of the house itself. The assessment method is as follows: evaluating the property’s location, land value and accommodation, followed by any additional features such as swimming pools, landscaped gardens and development restrictions.

After all primary information is gathered, they are pooled into comparable sales data as required under Victorian law since new underquoting legislation was made effective on May 1, 2017. Underquoting refers to the practice of misleading a buyer about the likely sale price of a property. These laws necessitate that agents provide potential buyers with details of three comparable sales in a statement of information, as well as an indicative selling price no lower than the seller’s asking price.

Mixed reviews accompany this newly implemented law: some express disapproval over the unseemly properties chosen for comparison, but, most experts have deduced the impact to be generally positive.

“The new price-quoting legislation has seen a shift in the manner in which agents advertise and quote property prices, with a reduced margin between the advertised estimated price and the actual sale price,” says Real Estate Institute of Victoria president Richard Simpson.

Despite such practices guiding property price-listing processes, things could still change during a sales campaign, based on interest recorded at open for inspections.

Jellis Craig director and auctioneer Dallas Taylor brings one last unforeseeable — and very crucial — factor to attention: emotional attachment.

“There’s an element of emotion there that you can’t put into the equation when valuing a property. Emotion might come from the buyer’s parents living around the corner or a triple garage that would be perfect for a home business,” Taylor says.

High demand is, of course, another factor that greatly contributes to the pricing of any particular property. RT Edgar director Oliver Booth provides a possible scenario favourable to landlords: “If you’ve got three people who all like it and all want it, the price is going to go up.”

Which is precisely what’s been happening in all property hotspots all over the world. All the time. 

Which are your favourite suburbs in Australia? Let us know in the comments below!

By Nimue Wafiya


Source:

https://www.domain.com.au/news/how-the-experts-put-a-value-on-melbourne-property-20180302-h0vyop/


CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential and purpose-built student property in cities across the United Kingdom (London, Luton, Manchester, Liverpool, Newcastle, York, Glasgow, Scotland; Sheffield, etc); Australia (Melbourne, Perth, Brisbane) and Thailand (Bangkok). Our projects are concentrated in high-growth areas with great educational, infrastructural and job growth potentials. We aspire to make a difference in the lives of our clients by helping them achieve their investment goals through strong market research backed by third party experts and due diligence. 

Disclaimer: CSI Prop does not provide tax & legal advice and accepts no liability. Readers are encouraged to consult a qualified tax or legal advisor for a thorough review.

Need advice or clarification? Call us for more information and/or to find out about our projects! Hotline: 03-2162 2260

No Comments

Australia’s Housing Market to Remain Bubbling

Looks like the Australian housing bubble is here to stay for some time yet. Image credit: globalriskinsights.com

Very recently, the Victorian government announced the abolishment of the controversial stamp duty for first-time homebuyers. This ‘lifeline’ to young people struggling to get on the property ladder takes effect from July 2017 and is applicable for any homebuyer in Victoria whose property costs less than AUD$600K.

In a market where experts and market watchers are spouting concern over housing undersupply and skyrocketing house prices, this could well be the road to hell being paved by good intentions’.

Why?

Because simple economics tells us that cheaper property prices (in the form of the abolished stamp duty in this case) will stimulate demand. And increased demand in an overheated market will push prices higher in that price range. Even Federal Treasurer Scott Morrison has shared his reservations, which you can read here.

Compounding this is the low interest rates (the central bank slashed rates twice last year) which  contributed to the boom in house prices, particularly in Melbourne and Sydney. Experts argue that to put a dent in the housing market, the RBA would need to raise interest rates, which is unlikely due to concerns about inflation and the risk that it would impact the economy significantly.

Sharp increases in interest rates may not be the wisest thing to do because it will affect growth and if anything, the RBA would likely increase rates on a gradual basis.

Which is why it may be some time yet before the prices of property will collapse as interest rates would have to rise to a certain level before the property bubble will pop. An article in The Daily Reckoning reports that when the US housing market blew up in 2007/2008n, it was the result of the Federal Reserve raising rates 17 times (25 basis points each time) from 2004 to 2006.

So it seems most likely that the housing market may well bubble merrily away…and house prices in Melbourne at the very least will continue going higher for some time to come.

Read more at http://bit.ly/2m6wLL1

CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential and purpose-built student property in cities across the United Kingdom (London, Luton, Manchester, Liverpool, Newcastle, York, Glasgow, Scotland; Sheffield, etc); Australia (Melbourne, Perth, Brisbane) and Thailand (Bangkok). Our projects are concentrated in high-growth areas with great educational, infrastructural and job growth potentials. We aspire to make a difference in the lives of our clients by helping them achieve their investment goals through strong market research backed by third party experts and due diligence. 

Disclaimer: CSI Prop does not provide tax & legal advice and accepts no liability. Readers are encouraged to consult a qualified tax or legal advisor for a thorough review.

Need advice or clarification? Call us for more information and/or to find out about our projects! Hotline: 03-2162 2260