HOW TO ACHIEVE REAL ESTATE SUCCESS IN
2019
There is one piece of advice everyone will give you when buying or selling a property: DO YOUR RESEARCH! However, with so much information and discussion out there, it can be difficult to identify the information you need and the right way to interpret it for your requirements. We’ve put together some helpful tips on reviewing and understanding the relevant data and information available.
1
How do I keep up with different price indicators?
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How important are auction clearance rates?
3
What do the days on market indicate?
4
What is rental yield?
5
What role do vacancy rates play?
6
What are my options if I can’t afford my preferred suburb?
7
How do I choose the right agent to help me?
1 UNDERSTANDING PRICE TRENDS There are a few different price indicators which can help your research, because every property is different and many factors impact the price. A good starting point is to look at the median price for the type of property (i.e. house or unit and number of bedrooms) in your suburb. Simply stated, the median price means that half of properties sold for below that price and the other half sold for above that price, during the period. Refer to the chart for median prices across Victoria. You should also consider the median price trend when deciding to buy or sell. This will give you a longer-term view of the market. Median prices are calculated from sales during the relevant period, as such it is influenced by the property types that sell during that time. It is important to not use median price as the sole indicator of price trends. The REIV property price index, the RMX, considers all properties (not just the ones sold) and gives you a fresh, weekly insight into real price trends. Check it out here: www.reiv.com.au/rmx While statistics and data can give you great perspective, talk to your local REIV Member as they will have access to the most relevant information on the area. 2 AUCTIONS AND CLEARANCE RATES Weekend auction results are a good indicator of your local market, but make sure you discuss the method of sale with your agent. Clearance rates only tell you the outcomes for the properties that were sold by auction. Remember, that on average, just over 20% of residential properties in metro Melbourne are sold by auction, whereas private sales account for nearly 80%.
The ratio of properties sold by auction can change significantly across suburbs. Please talk to your agent about which selling method is right for your property and your circumstances. 3 DAYS ON MARKET Days on Market is the median number of days a property takes to sell by private sale in the area. This can give you an insight into the level of buyer demand in the area. 4 INVESTMENT CONSIDERATIONS If you are looking to buy an investment property, consider the weekly rent you can expect in the area. The Rental Yield indicates the expected rental income as compared to the sale price of the property. The higher the rental yield, the higher your ongoing return on investment. 5 VACANCY RATES The vacancy rate is the proportion of rental properties that are available for rent, but not currently rented in an area. A low vacancy rate can mean that there is good demand for rental properties in the area, on the other hand it can also be a leading indicator for the likelihood of rent increases in the area. 6 ADJACENT SUBURBS Consider suburbs adjacent to where you’d like to buy; you may be surprised at the bargains to be had. Recent REIV analysis found median price differences of over $600,000 between adjacent suburbs which were on the same train line. You could make huge
$900.000 METRO HOUSE
To take a deeper look into your local area, visit reiv.com.au
MEDIAN SALE PRICES (SEASONALLY ADJUSTED), VICTORIA $800,000
CHOOSING AN AGENT
There is likely to be more than one agent in your area to choose from, so how do you decide which one will represent you best?
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REGIONAL HOUSE
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$0
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savings while still enjoying the benefits of your preferred area.
HOW TO CHOOSE THE RIGHT MEMBER FOR YOU.
STEP 1: CHOOSE A MEMBER The REIV offers a simple online tool to find a Member with the right experience and expertise to suit your needs. Try it for yourself at www.reiv.com.au/choose-amember. Here you will find: u An objective and transparent way to
Choose a Member with no referral fees, priority listings or other incentives to prioritise one agent over another. u You’ll find all real estate
professionals because REIV members are not limited to selling agents only. REIV Members
include auctioneers, property managers, owners corporation managers, buyers agents, valuers and business brokers; across residential, commercial and industrial real estate. u When searching for a residential
selling agent you can access a complete list of Member agencies who have relevant experience in your suburb with the property type you are looking to sell. u You can also initiate contact with a
shortlist of Members who best meet your requirements.
STEP 2: USE YOUR OWN NETWORK u Talk to family and friends about their
experiences and ask if they have any recommendations or otherwise. STEP 3: PERSONAL INTERACTION u Drop in and say ‘hi’ – call in to the
agencies on your shortlist and get a feel for their environment, attitude and professionalism. These are the same people who will be dealing with your prospective buyers.
THE DIFFERENCE™ WITH REIV MEMBERS REIV, the peak professional association for the Victorian Real Estate industry. We understand the significance of property in your life, which is why we focus on developing and supporting real estate professionals who can help make these decisions easier for you. What makes an REIV Member different? u Qualified: We cross check and validate all real estate qualifications, licensing and employment of each applicant before they are accepted as a Member. u Skilled: Continual professional development is a requirement of REIV membership. This is to ensure that our Members are constantly upskilling, whether it’s through structured training programs or interactive learning through seminars and competitions.
commercial property data in Victoria which comes to us directly from Members, so it is not reappropriated, manipulated or misinterpreted. We use this data to produce regular insights, statistics and tools that Members use to assist their clients. u Focus on service: REIV members know the importance of providing an end-to-end experience and are required to comply with REIV guidelines to always act ethically, honestly and fairly. All REIV Member agencies are required to hold Professional Indemnity Insurance cover. This can provide protection against potential claims and disputes.
u Well informed: The REIV collects and collates accurate residential and
The Real Estate Institute of Victoria Ltd
reiv.com.au/thedifference Important disclaimer: This document provides general information only. The information is a summary and is not complete. Neither you, or a third party, can rely on the general, incomplete, summary information in this document for any purpose including, but not limited to, your intentions to engage an REIV member or to sell, purchase or lease real estate or as providing a valuation or as providing the estimated selling or purchase price or rental of real estate or in connection with obtaining finance. This document does not provide professional or legal advice nor is it a substitute for it; you, or a third party, cannot rely on this document as being, or as a substitute for, professional or legal advice. While care has been taken in the preparation of this document, the REIV is not liable to you, or to a third party, for any injury, loss or damage of any nature whatsoever you, or they, suffer in choosing to rely for any purpose on the general, incomplete, summary information in this document.
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