A Word From the Directors For those who have been around the property market
the wealth belt of metropolitan Melbourne, then a few
for a while, you will know that property values move up,
thousand dollars designed to incentivise a buyer will
down and, at times sideways.
make no difference to a developer’s larger issue of
We all want to buy low and sell at a peak, however
profit retention.
the buyers for our end product factor in other
From 10th of January this year, when Marshall White
considerations such as cheap money, high liquidity and
Projects opened again for business, we have helped,
the luxury of choice. Right now, at best, they are only
on average, two people per day own an off the plan
getting two out of three.
property at an average sale price of just over $1.13
Vendors and purchasers alike know by now, that with a significant reduction in planning approvals over the last twelve months, the supply required to meet current demand is just not there. We read with interest an opinion piece published by the AFR (8 June) by columnist Karen Maley titled ‘Property Boom Risks Grow As Buyers Go All In’. Ms. Maley refers to the time honored tradition of awaiting APRA to step in and calm a fervid housing market. Key indicators, such as Melbourne's 5% rise in property prices over
million. Interestingly, this is only slightly higher than the same period in 2020 at an average of $1.107 million. Yes, it is project dependent but the level of buyer demand across all sections of the market (empty nesters, first homebuyers and investors) only remains on par with last year. So why the difference? Why were we having to conduct over five buyer appointments last year to close out a sale and why has the ratio of appointments to deals improved to one in three so far for 2021?
the last 12 months, seem tepid when compared with
Interest rates are the same, a buyer’s liquidity may have
Sydney’s 11.2 % increase during the same period.
only slightly improved, however our deliberate shift in
Darwin, however, is almost that double again at 20.3%!
educating an off the plan buyer before asking them to
In Victoria the jump in new home lending for the month
buy has shown substantial dividends.
of April was a substantial 3.7%, a sure indicator that
We all aim for marketing initiatives with cut through,
starry eyed young couples are today worrying more
however, eDM’s on sustainability, buyer guarantees, it’s
about FOMO than COVID.
cheaper to buy than rent, why buy new and the benefits
The question is, of course, do these continuous gains in residential prices allow a developer to charge a consumer more for an off the plan product at any stage of a campaign? Will a project launched, at a higher rate per sqm, still slow the rate of sales thereby increasing
of buying off the plan (there’s a distinct difference) educate a buyer – knowledge breeds confidence and confidence leads to action. PS If you ever see an eDM from us with the banner of “Developer Says Sell” then you know we’ve jumped the shark!
your cost per sale and extended days on market?
If you want to prepare buyers to make a decision, then
Or can we get back to the good old days where we
educate them. Provide them with all of the information
benchmarked stages of most sale campaigns (namely
they need/that’s important to them before asking them
halfway through a campaign or even at financial close)
to buy. Frequency builds trust. Only then can you ask
then trigger an increase in the price of unsold stock?
them to own any off the plan property that you are
The State Government’s recent initiative to waive
selling.
full stamp duty for any completed product that has
We’re always happy to hear from new clients who need
remained empty for twelve months post completion
advice
(and who can afford to do that?) obviously has nil impact on completed stock outside the CBD. If you are carrying finished product for a year or more, within
Mark & Leonard
Leonard Teplin Director
Mark Dayman Director
T: 03 9832 1191 M: 0402 431 657 leonard.teplin@marshallwhite.com.au
T: 03 9832 1193 M: 0409 342 462 mark.dayman@marshallwhite.com.au
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