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Oasis Property: Sydney Buyers Agents

Property news as it happens, from the desk of Managing Director Gavin McPherson.

Current Edition – October 2009

OASIS PROPERTY WINS BUSINESS ACHIEVER OF THE YEAR [REAL ESTATE] AWARDS

The past month bought Oasis its most recent success in the 2009 Business Achiever Awards presented by Cumberland Classifieds. (Fairfax) Held at the Kirribilli Club, I was delighted to be presented the award in the Real Estate section of the awards, ahead of other candidates LJ Hooker, Raine & Horne and First National. We successfully pipped 4 time winner Peter Hill First National, an award I believe is testimony to all our hard work since 2004. After beginning this company on the back of many years in the development and investment industry, it brought the ultimate pleasure to say that we had been recognised in the community (and most importantly by our clients) as having the quality of service to be on par with some of these companies.

As the only Buyers Agent nomination, I am confident the one item that has always set Oasis apart is our customer service. As we grow individually and also within the industry, we do so with customer service as our first and main objective. Real Estate is Real Estate, and property needs and requirements (for individuals and investors) is about people...not always the bricks and mortar that surrounds them. 
 
I have always believed that customer service reflected a want and need to actually serve a person/client in their ultimate ambition. This has always been our objective. Not to make money. Now that might sound very 'Jerry Maguire-ish' to you, but I am a firm believer that if the service flows, then profitability follows. In recieving awards like this, on the back of well over 1000 property transactions, it warms my heart to think of how we have posted so many clients into their dream home or their most profitable lifetime investment.

Awards or not though, our business still rolls on and we are only ever as good as our last purchase. So, on a more business-like note, please let me get back to our core business and explain what has been occuring in the market through some of our most recent purchases and experiences.
 
MARKETS BEHAVING BADLY!

As long as I have been doing this and as hard as I try to 'pick the market' it just simply be done. Not by me, not by anyone - but I'd like to take you through a little insight into some of our most recent purchases, experience and insights into what we think is in store for us.
 
We have had a reasonable month, securing over $12M in property including:

- St Ives ($2,031,000). A slow moving market with plenty of stock, albeit lack of 'quality stock'. My clients saw this home on the Saturday and it was secured on Sunday evening at 9:30pm. Reinforcing the point I made in my last newsletter installment, I had the feeling that some Buyers Agents had been guilty of buying anything (in a tight market) to meet their (not their clients) requirement to meet quota. Instead, I would be the first to admit that this client took us 6 months to locate and secure the right property.

In all your dealings with a Buyers Agent, and for those searching by themselves, this example should simply reinforce the point: "take your time to look for property, but when you have found it, do NOT hesitate!".

- Bondi Junction ($810,000). This Mackenzie Street property was located by us on a Tuesday morning. We had the property exchanged; diligence completed by 9pm in the evening. We have no better testimony to our services than a transaction like this, in which we have the resources in house to conduct a far greater proportion of the diligence to ensure that when the right property is found, we don't miss out. In a market as tight as this one, we had the feeling that this property would fetch between $830 - $850K at its first inspection. We had no hesitation putting forward $810K and securing the property after some initial haggling, trying to fight off our biggest enemy right now - the market. 

As a short snapshot of where I see this (price bracket) market, I suggest that we might see this hot for some time, with bullish sentiment from allcomers, and between 30 - 40 parties inspecting properties at once. I call a critical mass of enquiry some 12 - 15 parties through at inspection time. While higher interest rates and the odd job layoff might see a few of these missing, most signs I believe still point to higher prices up to the $1.2M bracket for some time. This won't be without some good buying 'windows' which I see as the summer hangover of stock, in late December and January. The patient will be truly rewarded. TIP: Keep your eyes on the property that is now well overpriced. It is this stock that will come back to us later.  
 
- Cremorne Point ($3,700,000). A truly exceptional land bank for our client (developer/investor) this property was located amongst 6-8 other opportunities from Kirribilli to Mosman. Our job was to secure a profitable land banking investment, with capital growth as the dominant factor. With a recent sale with almost identical features on a smaller block with a smaller house selling for $5,125,000, we were confident that not only was capital growth secure, the purchase price capture a tidy retained equity position from the start.

The lesson in this purchase is for the truly savvy purchaser not to put all your eggs in one basket, as that basket might just end up selling for too much. The job as I see it; of a Buyers Agent, is to analyse and follow as many opportunities as possible, as not all of these will come off. For three months we had followed and made ourselves available to well over 20 legitimate opportunities. In the end, it will be your role (or your Buyers Agent) to actually know when is the time to inject yourself into the transaction and when to stand back.

This property was never an opportunity for us at $4.5M, the initial indications of price. As such, we retreated, and didn't add fuel to the fire (market perception of a higher price). We calmly attended the auction as spectators only, saw the property passed in with lots of interested parties that seemed to be waiting for everyone to move first. On that note, we contacted our Singapore based clients who did not hesitate on the opportunity and we ambushed the market to get in before they did, in the post auction haste.

In most of our premium purchasers of late, we have noticed that stock levels, while not historically low, at least are not delivering exceptional quality to the market - so it does in part make for slim pickings.

I am a firm believer that the post GFC bounce has set in, but I do NOT see huge increases in the premium bracket for some time. Some vendor reluctance (of course) has been met with some upwards adjustment, but I would say that the appetite from the buyers that I have had (and competition in the market) has not been huge and most statistics have reflected a reluctance from most buyers to take on signficiant debt levels, at least for the owner occupier properties. I still say that this market will remain 'good buying' for some 12- 18 months to come. All that said, I would be entertaining the prospect of beginning your search now, as quality stock does take some time to deliver up. To this also, I can cite recent examples of some properties (including once significant Burran Ave Mosman) vendors taking some 10 months to reduce their asking price by a whopping 30%. Some things, simply.....are worth waiting for.

Paddington ($1,561,000). This in my experience has always been one of the most difficult projects a Buyers Agent can take on. A renovated 3/4 bedroom terrace in the 'golden triangle' enveloping the Paddington 5 ways district. Fortunately our experience delivered an off market proposition that we secured for our Hong Kong based clients. On the back of our UBAS reports and photo ereports sent to our clients, they jumped on a plane for Sydney and within 12 hours of this we secured the property. 

I suggest that this market (Paddington /Woollahra) quite rightfully is one of the tightest held markets in Australian property. Turnover of property is low and the urge to sell for less is just not an option. The calibre of sales agents used are high, and as such, one purchasing in the area always needs to have their wits about them and an index of recent sales to be sure they are going into their negotiation with an understanding of what 'market value' is. 

It should also be mentioned that many expat earnings have returned, with bonuses reaching all time high levels again for some (Goldman Sachs), while others (Citigroup) still languish on the back of Government bailout paybacks. As calm returns, while we don't see bullish activity ahead, this should still hold the mantle as one of Sydney's tightest held markets. To this, I see gentle drifts to 6-10% growth rates throughout 2010 and 2011.  

Glebe ($827,000). Another long time client of ours, we successfully purchased this property on a Saturday afternoon after the inspection. Again, like most of our recent purchases, all have been secured by being pre-emptive and prepared. In this instance, we had no success achieving an inspection during the week before Saturday due to tenants occupying the property. That didn't mean we didn't contemplate purchasing before we inspected it. We had the contract thoroughly reviewed before we saw the property and arrived at the property with our Pest and Building Inspector. By the time offers started flowing from all other purchasers, we were the only party sitting with a signed contract ready to transact. It was that preparedness that left the vendor accepting our offer, despite higher promises of prices from others. 

The Glebe/Newtown/Erskineville market at present is like watching an auction at the fish markets - and the prices just keep getting higher. For those contemplating buying at the moment, I'd suggest taking your eyes off Newtown for a few weeks, as it is just too hot. History shows that clearance rates at 80%+ (in Inner West) are unsustainable and on the back of every boom is a bust. I don't predict doomsday, but I'd suggest a small discount of 5-10% around the corner. 

Frenchs Forest ($840 000). We secured this client after another Buyers Agent had not met their needs. They came to us 6 months ago and expressed dissappointment at not having success with this agent over an extended period, and many experiences of what seemed to be them putting them into any property. We always indicated that it would take some time to secure what they wanted, as this was their retirement home, and (hopefully) their final purchase of real estate in their lives. As such, it needs to be treated as such. Again, the motto of "take your time to look for property, but move quick when you find it", was lived up to, when we located the property on the Friday and secured it on the Saturday. 

The area of Forestville and Frenchs Forest has long been a very family friendly area, with great dimensions to the land and excellent local amenities. Having proximity to the shops and transport though comes with a premium and almost all purchasers want the same thing. Location, location and location. For those that can wait, this area still remains a very conservative one, and they have thresholds on their upper budget. I believe they will be tested in a higher interest rate environment. 

SUMMARY 

Above is just a few examples of some of our recent purchases (last 4 weeks) and some market commentary. On the whole, I have also been spending a lot of my time speaking to my clients and making them aware that better times for purchasing will be on the horizon. With 4 businesses under our roof, I still truly believe we have the best pulse of the property market from our:

BUYERS AGENTS - being on the ground, at times in excess of 100 properties inspected per week
CONVEYANCING - giving us an indication of volume and turnover of stock
FINANCE - giving us an idea of sentiment and pre approval levels
RENTALS/PROPERTY MANAGEMENT - giving us an idea of the shift from renters to owners and vice versa

If we can be of service in any way, including attendance at one of our Property Negotiation seminars, please don't hesitate to call one of us here at (02) 8705 3252. 

I look forward to my next update, but as always if you need anything with regards to:

- Buying Property
- Conveyancing
- Finance, or
- Property Management
 
I look forward to being of assistance. Please feel free to call us on (02) 8705 3252




Gavin




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      November 2007 - "Investors back to market & new addition to Oasis team!"

About the Authors:

Gavin McPherson is managing director of Oasis Property Buyers and also serves as a Director of the McPherson Property Group. He has authored a range of articles and papers that present empirical data and solid research in a bipartisan fashion. Operating one of Sydney premier buyer's agencies also identifies him as having his ears to the ground to see emerging trends as they occur – not after they happen. He can be contacted at:
gavin(AT)oasisproperty.com.au