The future of Australian property prices

[MrBurns]

Why are agents still so ubiquitous in the real estate market?!

The seller meets the agent who attracts the interest of buyers through internet ads that can be placed by the seller! Why not just cut out the agent and save on the commission? Are they legally required for a property transaction to occur? It doesn't make sense that you can sell many assets online without the need for an agent, yet agents are still employed in the sale of houses

There's no legal requirement to use an agent, people do because they need correct valuation advice and the agents have all the buyers.
However if people knew how easy it was they'd do it themselves.
In a hot market agents can squeeze the price up using Auctions.

[Miss Hale]

Why are agents still so ubiquitous in the real estate market?!

The seller meets the agent who attracts the interest of buyers through internet ads that can be placed by the seller! Why not just cut out the agent and save on the commission? Are they legally required for a property transaction to occur? It doesn't make sense that you can sell many assets online without the need for an agent, yet agents are still employed in the sale of houses

You don't need an agent. We bought our last house off a private seller, that was a good few years ago now though. I think most people think it will be easier/less work to sell using an agent. What I have noticed over the last year or so that I never knew existed is buyer advocates, they are sort of like an agent for the buyer rather than the seller.

I've almost lost interest in the real estate market at the moment. There doesn't seem to be a lot of decent properties on the market where I am looking and what is about is still overpriced.

[Julia]

You don't need an agent. We bought our last house off a private seller, that was a good few years ago now though. I think most people think it will be easier/less work to sell using an agent.

The reasonable assumption is that an agent - with his shop front and usually large generic display advertising - will provide a far greater base of buyers.
Presumably a factor would be the position of the property for sale. On major roads I'd expect a large For Sale sign with some decent photos would prompt prospective buyers to contact the seller, whether that's an agent or a private seller.

My logic might be wrong but if I were buying I'd be more than happy to approach a private seller, but not so keen if selling, where I'd at least expect the agents would qualify prospective buyers before trooping them through the house.
Anecdotal only, but there are a few properties near here up for private sale. The signs have been up there for years.

[Mr Z]

Why are agents still so ubiquitous in the real estate market?!

Agents sell time, the time it takes to sell a house which is in the end just a numbers game... x showings will on average equal y sales, if handled correctly. Most importantly they provide an emotional circuit breaker without which the majority of deals would not occur. I spent many years working as a broker providing a similar service and I can say unequivocally that most sales where lost when buyer met seller. The middle man removes the emotion and works hard on both sides to make deals happen, the identification of a potential buyer and the establishment of price is just the first step, there are so many ways deals can fail from there on in that it is just not funny. A good intermediary more than covers the commission, but having said that there are many/most RE agents that have no clue.

Put it this way... a direct sale will almost never beat a good agent/broker in terms of yield for the seller BUT finding a good agent in RE seems to be the challenge. There a way too many also rans in that business! However that does not mean that those that are competent don't earn their fee.

[Miss Hale]

Interesting article in the Telegraph, House crisis looms

http://www.dailytelegraph.com.au/rea...-1226475536529

[MrBurns]

Interesting article in the Telegraph, House crisis looms

http://www.dailytelegraph.com.au/rea...-1226475536529

Thats an accurate assessment, this situation has been coming for a while now and it wont be pretty.

[Miss Hale]

Thats an accurate assessment, this situation has been coming for a while now and it wont be pretty.

I can think of nothing worse than having borrowed a bucket load of money and then seeing the value of your home dropping

[MrBurns]

I can think of nothing worse than having borrowed a bucket load of money and then seeing the value of your home dropping

It started with Rudd, when he relaxed the FIRB laws allowing Chinese (in particular) to buy anything the lliked in effect, that's when prices just went ballistic, I attended auctions for friends where Chinese students outbid them , they didnt care what they paid, just didnt care at all, the money was coming from their parents in China.

Low interest rates as well created the perfect storm and the riduculous doubling of the first home owners grant and encouraging everyone to "get into the market" to keep the housing sector going.

It will end in tears as the forced sales depreciate the worth of all the properties around them.

I blame Rudd and Labor for whats to come.

[againsthegrain]

What I would like to know where is robots, what is he doing and what strategy has he taken on?
Very curious if the king of bulls is still bullish or over the bs

[Miss Hale]

It started with Rudd, when he relaxed the FIRB laws allowing Chinese (in particular) to buy anything the lliked in effect, that's when prices just went ballistic, I attended auctions for friends where Chinese students outbid them , they didnt care what they paid, just didnt care at all, the money was coming from their parents in China.

Low interest rates as well created the perfect storm and the riduculous doubling of the first home owners grant and encouraging everyone to "get into the market" to keep the housing sector going.

It will end in tears as the forced sales depreciate the worth of all the properties around them.

I blame Rudd and Labor for whats to come.

Good assessment but you forgot my personal bête noire, negative gearing

[McLovin]

Good assessment but you forgot my personal bête noire, negative gearing

Ahh but without negative gearing property investing will require some skill.

[young-gun]

I blame Rudd and Labor for whats to come.

Oh no not you as well Mr B.

I fail to see how we can blame anyone in particular for decades of reckless debt accumulation and investment speculation. Rudd didn't help, but it's merely the icing on a 10 tier cake.

**** is poised to hit the fan, falling property values will be the least of everyones worry(although a big one)

[white_goodman]

Oh no not you as well Mr B.

I fail to see how we can blame anyone in particular for decades of reckless debt accumulation and investment speculation. Rudd didn't help, but it's merely the icing on a 10 tier cake.

**** is poised to hit the fan, falling property values will be the least of everyones worry(although a big one)

its a natural thing to scapegoat our greedy politicians, but imo a fair lump of the blame it to be put on the boomer generation and their greed, a cocktail of greed coming from all parties in society....

[Judd]

its a natural thing to scapegoat our greedy politicians, but imo a fair lump of the blame it to be put on the boomer generation and their greed, a cocktail of greed coming from all parties in society....

Yes, I can see your point. It is always an issue when one group has more than another.

[Superb Parrot]

Yes, I can see your point. It is always an issue when one group has more than another.

But Government policy sets the agenda. Negative gearing would have been a policy to encourage housing construction in an earlier phase of our history i.e. it is a developmental encouragement that in 2012 is merely a tax avoidance system. No CGT on sale of the family home seems like a fair policy, but it is being exploited, as in NG, to being a tax dodge, used to the extreme by the very rich. What would you do with $6m ?, anything but the family home incurs tax.

[Judd]

But Government policy sets the agenda. Negative gearing would have been a policy to encourage housing construction in an earlier phase of our history i.e. it is a developmental encouragement that in 2012 is merely a tax avoidance system. No CGT on sale of the family home seems like a fair policy, but it is being exploited, as in NG, to being a tax dodge, used to the extreme by the very rich. What would you do with $6m ?, anything but the family home incurs tax.

Suggest you read some of the decisions by Sir Garfield Barwick, Chief Justice of Australia from 1964 to 81. However, you are correct that it is within the power of Government to alter the relevant legislation. Then are they concerned at a possible challenge to the High Court should they do so?

As I don't have $6m it is not an issue for me to worry about. Still in the same 3 beddie my wife and I bought many years ago in the 70's just as the oil crisis hit and we were concerned about keeping our jobs.

[drsmith]

Drsmith's property tax reforms for private owners/investors.

1) All state based property taxes (stamp duties, land taxes etc) should be abolished.
2) Deduction of expenses against unrelated income (negative gearing) should be abolished.
3) The current 50% capital gains discount should be reduced to 1/3 (the current difference between the top marginal rate of income tax and the corporate rate) and the option of CPI cost base indexation restored.
4) Building depreciation should be abolished.

[McLovin]

Some commentary from the head of Residex about the competition. Hits the nail on the head, I think. I am puzzled that month in month out, what I hear anecdotally just doesn't add up to the statistics presented.

APM is the worst. Andrew Wilson seems to be stuck in 2007...

I strongly believe that housing data being published by other market researchers in the press does not present an accurate picture of what is happening. In fact, it is probably the reason why reported figures are not in line with other indicators of what is happening in the market to the ordinary Australian. My point is very simple: the total dwelling statistics being reported suggest that the majority of property owners in Australia are seeing growth in their principal asset hence they should be feeling more comfortable, starting to spend a little and increasing their activity in housing markets. If this were the case, consumer sentiment surveys would also point to a more confident population…

I believe that, given the current interest rate setting is attractive, the market should be moving forward more strongly than what we are seeing.

Auction clearance rates are stubbornly holding within the 50-60 per cent range. Latest ABS figures suggest housing finance numbers fell by 1.4 per cent for owner occupiers and 2.7 per cent for investors. Based on these figures, it is difficult to believe that the market is as robust as the press is suggesting.

...

I believe the slow pace to better times is a result of uncertainty and that any significant improvement won’t be seen until there is uplift in sentiment.

...

The simple truth is, in an environment where sentiment is fragile negative news accumulates and contributes to low consumer sentiment. This is perhaps partially responsible for the market downturn in the dwelling price growth in August, after the growth that appeared to be getting underway in July. I also note that the press was reporting a slowing in the Chinese economy in August.

I accept my above statements are somewhat downbeat; however this is based on the average market position that exists for the median property in any given city. Areas within a city are not all going to perform at the same rate as the median. There will be areas the perform better or worse that the city market as a whole.

http://www.macrobusiness.com.au/2012...ousing-market/

[Superb Parrot]

Suggest you read some of the decisions by Sir Garfield Barwick, Chief Justice of Australia from 1964 to 81.

Do you have a link to the relevant decisions ?

[Judd]

Do you have a link to the relevant decisions ?

Well, I could be nasty, SP, and simply refer you to www.austlii.edu.au but...

Here is a PDF which will give you a flavour of the decisions of the High court under Sir Garfield. He was quite a character I understand. Not born into a wealthy family and a bankrupt at one stage. Sorry about the ramble but I am fascinated by historical developments and people who formed them.