Sixth Avenue is the newest development by the Melbourne developer Aultun&nbsp;Group.

The homes are part of a unique estate that has been designed by Point Architects to provide high quality living for the discerning owner occupier.&nbsp;

Consisting of a total of 59 townhouses, Sixth Ave. captivates modern design boasting a versatility of space and function, with light filled interiors superbly finished with high quality fixtures. Outside private expansive courtyards make for the perfect ultimate family lifestyle by the bay.&nbsp;

We sat down with Aultun Group managing director Bruce Yang to discuss Sixth Avenue.

[smartcode_project:default project_id=32136]

JR: What demographic was the development pitched at?

BY: The growing numbers of 25-58 year old bayside residences who wanted to keep the bayside lifestyle &amp; improve on their current living accommodation without moving out several suburbs. Therefore affordability was just as important as quality. The homes had to feel as much a part of the beach side living as they did family wise, inclusive of&nbsp;creature comforts that one would expect in a family home, for example great outdoor entertaining areas, well-appointed fittings &amp; fixtures to name a few.&nbsp; &nbsp; &nbsp;&nbsp;

JR: What was the brief for Point Architects?

To embrace the bayside lifestyle, using colours of rammed earth &amp; beach tones. Create areas that are bright &amp; airy with room for growing families to entertain.

<a href="https://www.urban.com.au/new-townhouses/sixth-avenue-15-sixth-avenue-chelsea-heights"><img alt="" height="905" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/sixth_avenue_chelsea_2.jpg" width="1200" /></a>

JR: Which part of the project are you most looking forward to seeing when completed?

Construction commences very shortly, so the time spent designing &amp; planning have come to an end and it&rsquo;s time for realisation. The collaboration of each stage of the development from the site acquisition to completion.

There are many hero moments, though the one that leaves me with goose bumps is seeing families move into their new homes. The buyers take the same experience as we do, they are in anticipation of the possibilities a new home brings.&nbsp; The joy of home ownership is right up there in one of the greatest experience of a lifetime. &nbsp;&nbsp;

JR: What will be the biggest drawcard for buyers to the project?

They say property is about three things, For us they are beach, transport &amp; amenities. What a perfect storm this is with style, quality &amp; affordability.

<a href="https://www.urban.com.au/new-townhouses/sixth-avenue-15-sixth-avenue-chelsea-heights"><img alt="" height="849" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/sixth_avenue_chelsea_3.jpg" width="1200" /></a>

JR: How important is the Bayside location? And why as a development team have you decided to focus your projects in that area?

We love the South East &amp; Bayside, it&#39;s where Melburnians go to the beach be it for a day trip or week on the Peninsula. You will always find something new to do, surrounded by some of Melbourne&rsquo;s best government &amp; private schools, the new Mordialloc by-pass will also bring so much value to the area.

Our expectation is that we will see a sharp price increase in property values in Chelsea Heights end of 2022 start of 2023 when this project &amp; the Chelsea railway upgrade have been expected for completion.

The South East &amp; Bayside will always be a better investment not only financially also holistically &amp; social factors wise.&nbsp;

They say property is about three things, for us they are beach, transport & amenities. What a perfect storm this is with style, quality & affordability.



Joel Robinson

What buyers need to know about Sixth Ave in Chelsea Heights: Urban chats with Aultun Group managing director Bruce Yang

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There are few topics that cause as much debate among property pundits and housing economists as Australia’s potential property bubble.
It’s a divisive topic. Those who say that we are experiencing a housing bubble are often labelled scaremongers, while those who consistently deny the presence of a bubble are accused of spruiking.
Philip Soos is an economist and post graduate candidate at Deakin University. He has recently co-authored <a href="https://www.worldeconomicsassociation.org/files/Bubble_Economics_Egan_Soos.pdf" target="_blank">Bubble Economics: Australian Land Speculation 1830-2013 </a>with Paul D Egan.
Property Observer asked Soos to explain past bubbles in Australia’s economy and how Australian investors can cope with a potential bubble.
<img src="/images/2014/07/29/soos-profile.jpg" alt="" style="float: right;">
What is your new book about?
The book provides a conclusive answer to the debate that has been raging in Australia for the last decade – is there a bubble in the housing market? Paul D. Egan and I used a fairly conventional approach to investigate this possibility.
We examined the work of the small number of economists who identified the US housing bubble and predicted the GFC, analysed past real estate bubbles in Australia’s history going back to the 1830s, and used a paper published by the RBA in 1999 (<a href="https://www.rba.gov.au/publications/rdp/1999/pdf/rdp1999-06.pdf" target="_blank">Two Depressions, One Banking Collapse</a>) as a template for the book.
What we found is that Australia’s history is littered with real estate bubbles (really, land market bubbles) that later collapsed, pummelling the banking and financial system and repeatedly sending the economy into recession or depression. The stock market has often bubbled over as well, but the effects weren’t nearly as bad.
What is the difference between a bubble and a normal business cycle peak?
Every capitalist economy experiences fluctuations or business cycles, especially given its dynamic and chaotic nature. Business cycles are driven by a number of factors, particularly rapid industrialisation and urbanisation, mining and manufacturing booms, and the rise and fall of speculative asset bubbles. The former are typically based on fundamental movements in the domestic and world economy, but the latter is caused by irrational exuberance.
Due to the reasons mentioned below, mainstream economists pay little attention to the cycles in stock and land markets. If they did, they would notice that many business cycles throughout history have been strongly influenced by real estate booms, financed by private debts the banking and financial system extends to speculators. Controlling the regular pattern of asset bubbles would considerably tame the business cycle.
What are some big bubbles Australia's property market has seen?
The first land market bubble occurred during the 1830s. Speculators purchased enormous amounts of government-owned land, holding them in the hopes that prices would always rise. But fall they did, resulting in Australia’s first depression in the early 1840s, which the economy promptly recovered from.
The second bubble was insane, developing during the 1880s. Bank and non-bank lenders provided credit to everyone who wanted it, underpinning a period of mass speculative fervour, primarily in commercial CBD real estate. There were reports of Melbournian city blocks doubling in price within the space of several months in 1887. The bubble collapsed in the early 1890s, resulting in the worst depression on record, relatively worse than the ‘Great Depression’ of the 1930s.
The next bubble formed during the 1920s, though this was muted compared to the two previous bubbles. Banks were more cautious and adopted <a href="https://www.philipsoos.com/private-debt/">prudent lending standards</a> which ended up saving them during the depression. The movement in real estate prices were smaller relative to the previous land market cycle. The banks favoured lending to the business sector rather than households during these three bubbles.
The mid-1970s saw a commercial bubble, feeding into a smaller residential bubble which peaked in 1974. Both were financed by a sharp rise in lending by the banking and financial sector and eventually burst, bringing about a recession. The high rate of inflation and wage growth did, however, help to mitigate the large private sector debt burden.
During the late 1980s, another commercial bubble developed, centred in Melbourne, Sydney and Perth. After peaking in 1989, commercial real estate prices collapsed by 60% through to 1993, a thorough blood-letting. This produced the early 1990s recession and, to date, Australia has escaped a further recession.
The latest, and easily the largest, land market bubble in post-WW2 history began in 2001. This time around, the commercial property market is playing a backseat role, with the housing market severely overpriced by a range of <a href="https://www.philipsoos.com/housing-valuation">fundamental indictors</a>, indicating severe trouble will occur when it collapses. The illiquid, over-leveraged, under-capitalised, highly concentrated, foreign-funds addicted, and heavily over-compensated banking and financial sector is eerily reminiscent to that of the 1880s.
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Are any markets in Australia currently in a housing bubble?
All capital city housing markets have experienced a <a href="https://www.philipsoos.com/housing-prices/">surge in prices</a> since the mid-1990s, with Melbourne posting the largest gain between the low in 1996 and apparent peak in 2010. Perth has also boomed, with prices doubling in a couple of years after 2004, peaking in the March quarter of 2007.
According to our <a href="https://theconversation.com/property-bubble-thats-the-theory-anyway-16814">preferred measure</a>s of a housing bubble - rising real (inflation-adjusted) prices, accelerating mortgage debt and aggregate net rental income losses - all capital city markets are in the bubble zone, though some are larger than others. Darwin has the <a href="https://www.philipsoos.com/rents-and-yields/">highest yields</a>, so it appears to have the smallest bubble.
What is the relationship between purchasing for capital gains and housing bubbles?
The crazy race for capital gains (paper gains or phantom wealth) is the cause of the bubble. Property investors accumulate huge debts to speculate on the future movements of housing prices, expecting continual rises. Fundamental metrics like household incomes, rents and yields are dismissed, as rapidly rising prices become the new norm.
To protect themselves from a crash, should investors be seeking rental returns rather than purely capital growth?
Yes! The fundamental value of a property is based on the income it produces, not what prices could be next year or the year after. Gross yields were around 7% during the mid-1990s, falling to 4% today. Those who have focused on positive cash flows rather than capital gain will come out ahead.
Housing prices can only rise so far given the staggering burden of household debts, currently around <a href="https://www.bis.org/statistics/credtopriv.htm">110% of GDP</a> as of 2013. This is a historical high and aligns with other nations having experienced a bubble: Ireland, Denmark and the Netherlands. Unfortunately, 67% of investors are negatively-geared as of 2012, up from 51% in 1994, indicating they are focused on capital gains, not rental income.
Why do you believe economists "get it wrong" when it comes to bubbles?
There are two primary reasons why the economics profession as a whole always fail to identify real estate bubbles and predict the subsequent economic downturns.
The first is the theory taught and practised is a <a href="https://www.amazon.com/Debunking-Economics-Revised-Expanded-Dethroned/dp/1848139926/ref=sr_1_1?s=books&amp;ie=UTF8&amp;qid=1405987428&amp;sr=1-1&amp;keywords=debunking+economics&amp;dpPl=1">pseudo-science</a> (neoclassical economics). It imagines a world where people can see into the infinite future, know all information and always make rational decisions. Furthermore, banks, debt and time do not play any role in these models. Economists assume housing and land markets operate efficiently by definition; therefore bubbles can’t exist by this logic. It’s a religious-like belief, but with <a href="https://theconversation.com/time-to-stop-rewarding-economists-for-bad-behaviour-5836">very dangerous consequences</a>, especially for middle and low-income earners.
The second reason is due to vested and conflicts of interest. It is almost impossible to gain the honest opinion of an economist, researcher or analyst into matters of real estate and banking. Economists, particularly those in senior and executive roles within government and industry, are unwilling to jeopardise their incomes and privileged status by pointing out the obvious. If they did, they would be kicked to the curb by their employers by the end of the day.
It’s also the reason why our book has been suppressed by the mainstream media, echoing the experience of other published authors who have come to the same conclusion, such as Australian businessman Lindsay David (<a href="https://www.australiaboomtobust.com/" target="_blank">Australia: Boom to Bust</a>). Our two books have a combined 1,000 plus pages of the most in-depth research on real estate, banking and mining available, but no mainstream journalist or reporter will review or cover them. This is to be expected, however, given the irrationality of the times we live in.
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How can investors cope with a property bubble? Q&A with Philip Soos

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Here at Property Observer we talk a lot about buying your first investment property or home, getting your foot onto the ladder and the mistakes you may make earlier on.
However, for many property buyers it’s about planning for a portfolio of properties – rather than just the first one.
For today’s Q&amp;A we spoke to Wakelin Property Advisory’s associate director Jarrod McCabe and asked about how crucial that first purchase is and where it fits in to building a portfolio.
If there are any questions you’d like to see answered, or experts you’d like to see asked, email us with your thoughts: <a href="mailto:jduke@propertyobserver.com.au">jduke@propertyobserver.com.au</a>.
What type of property should first time investors be looking at?
Typically, a first-time investor has bought their own house and has some equity in that property. Usually they are employed and have identified some surplus income they feel they would like to invest rather than consume. Often the investor has time on their side – they have 10 or 20 years or more until their envisioned retirement date – and so they are investing for the long-term.
Under these circumstances, a first-time property investor should be seeking a property that is likely to deliver strong capital growth. It is the year-on-year compounding effect of this growth that will deliver the return they are after. 
How crucial is the first investment property to building a portfolio?
The first property is vital.  Get this right and in a few years it will generate sufficient equity to finance the addition of a second property.  Ideally the aim is to repeat this process a number of times.  But if the first property is a dud it won’t deliver the equity to go to stage two. Instead, the investor is stuck with a non-performing asset.  Their best move is then to recognise the error, sell this property quickly and start again. 
However, invariably it takes several years before the investor faces up to the reality of their situation. Not only do they lose thousands of dollars in transaction fees and forgone capital growth, but they lose the most valuable and irreplaceable resource of all – time.
What does the 'perfect' portfolio look like? 
A perfect portfolio would consist of a number of assets situated across a number of blue-chip suburbs in one or more of our larger capital cities. There would be a balance of one and two bedroom apartments in the portfolio as well as a number of single fronted period cottage or terrace homes. 
All the properties would be older-style and be situated on attractive, leafy residential streets with good proximity to local amenities. The apartments would be in smaller boutique blocks with allocated off-street parking.  There would be a range of architectural styles including Victorian, Edwardian, Art Deco, and 1950s through to 1970s.
What does it mean when people refer to “diversifying” their portfolio?
Diversification – not having all your eggs in one basket – is of course just as valid for property as it is for other asset classes. 
In the ‘perfect’ portfolio above, this is achieved in a number of ways: selecting both houses and apartments, selecting one bedroom and two bedroom properties; mixing up the architectural styles; and by selecting properties in different suburbs – and possibly different cities.
But you can over-diversify, if that means compromising on other investment criteria such as sticking to property with scarcity value. So I wouldn’t recommend buying a high-rise property just so I can claim diversification.  One also has to weigh up buying property outside your own state in order to achieve diversity against the increased uncertainty that comes with investing in a less familiar place.
See over page for more on building a portfolio, knowing when to stop acquiring properties and whether or not you should sell.
<hr class="system-pagebreak">
How quickly should a portfolio be built?
Property investment is not about how many properties you have. Rather it’s about building equity. Only invest in the next property when you have the equity to do so and the spare cash-flow to finance it.
How do property investors know when to stop acquiring properties?
Eventually investors recognise they have reached a point when they have achieved their financial aim or they are at a life-stage when they no longer wish to accumulate assets but reap the benefits of those assets.
Do you believe in 'never sell'?
‘Never sell’ is a good state-of-mind to have when investing. It’s the attitude that these assets are locked away for the very long term; that the investor won’t be selling if the property market has a cyclical fall and that they are determined to accept a lower disposable income today in return for greater rewards tomorrow. It is also a recognition of the very large costs involved in property transactions. Of course, this is all predicated on buying quality assets in the first place.
But naturally, life does not always go to plan, and there may be personal reasons why one would sell. 
How do you judge the success of a property investment portfolio?
It probably takes a few years before this can be done. A successful property investment portfolio is one that repays the sacrifices made in the early years of ownership to establish and nurture it. It does this by generating enough rent to not only cover all costs, but to pay out a healthy income on top. It also continues to grow in value every year. And it is so well managed by your advisers that it require little input from the owner.
Any ideas for a Q&amp;A you'd like to see? Email us: <a href="mailto:jduke@propertyobserver.com.au" target="_blank">jduke@propertyobserver.com.au</a> 
For more Q&amp;As, <a href="/expert-insights/buying/q-and-a" target="_blank">click here</a>.
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Building a well-structured portfolio: Q&A with Jarrod McCabe

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Property investors and, increasingly, home buyers are being encouraged to look towards hiring a buyer’s agent to assist with their purchase. Understandably, when throwing hundreds of thousands, and sometimes millions, of dollars into an asset you want to get it right.
However, not every buyer’s agent is made equal and there are some profound differences between the different experts in our space.
If you missed it, last time we asked <a href="https://www.urban.com.au/expert-insights/buying/31967-q-a-how-close-should-a-real-estate-agent-get-to-a-buyer-s-agent" target="_blank">'How close should a real estate agent get to a buyer's agent?'</a>
In our Tuesday Q&amp;A, Property Observer has taken the debate to Miriam Sandkuhler, the founder of <a href="https://www.propertymavens.com.au%20" target="_blank">Property Mavens</a> and author of Property Prosperity, and asked her the questions we wanted to get her opinion on – from whether commissions should be allowed to how much she thinks we should be paying.
What do you see as the key role of the buyer’s agent?
The role of a buyer’s agent is to research, source and negotiate to buy a property on a client’s behalf. They must always act for the client and advocate on their behalf, protecting their interests.
Just as a solicitor will act for both defendants and plaintiffs, a licensed buyer’s agent can act for a buyer or a vendor (in a selling capacity), but never both at the same time.
A buyers’ agent is in the market and negotiating every day, so their skills are well-honed and because they understand the market and the sales tactics real estate agents use, they are well placed to advise clients on how to buy the right property at the right price.
They also have access to the same information and databases real estate agents use which are not readily available to the public and can source ‘off market’ properties before the public finds out about them.
Most people only ever buy a few properties in their lifetime and can make the mistake of assuming because they have owned property; they are expert enough to identify an investment grade property.
Unfortunately each year I see people who have made this mistake - and paid the price in the tens of thousands of dollars.
Do you think a buyer’s agent should receive commissions from a developer?
Absolutely not.
If someone is receiving a commission from a developer, they are a sales person working for the developer and not for you, the buyer.
Whoever pays the fee is the client. That means if you are receiving “free advice” you are being sold to and the “adviser” does not have your best interests at heart. That includes someone calling themselves a "buyer agent" who is not charging you a fee or is rebating it when you sign a contract or at settlement.
You should always ask an agent, accountant, mortgage broker or financial adviser, if they are receiving fees from anyone else.  If you believe you are not being told the truth, refer them to Consumer Affairs in your state.
Never deal with anyone calling themselves a buyer agent who does not have formal real estate qualifications, as they cannot legally represent you in a real estate transaction and won’t be covered by professional indemnity insurance if things go wrong”.
You can search the Consumer Affairs website in your state which will have the Public Register of licensed estate agents. A buyer’s agent or buyer’s advocate should always be a licensed estate agent or agents representative.
What other sources should a buyer’s agent accept payment from? (E.g. property management referrals)
The issue of receiving referral fees is a matter for each agency to determine and the regulations differ from state to state.
For example in Victoria, if a buyer’s agent (or selling agent) receives a referral fee from a property management firm,  the landlord is required to sign a commission sharing authority approving the arrangement to ensure it’s a transparent transaction.
Some buying or selling agents elect not to take referral fees at all and merely require that a high level of service is delivered to the client. This is my preferred way of operating, because when there is no money changing hands, I can hold a service provider to account and keep the client’s interests at the forefront.
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Do you think there is an issue in the industry of unscrupulous practitioners?
As with any industry, there are always some practitioners who are more professional than others and a minority who behave unscrupulously.
The biggest problem in the industry is people masquerading as a ‘buyer’s agent’ when in fact they aren’t qualified property advisors or licensed real estate agents and are taking a commission from a developer or a vendor to sell you a property. 
Another problem I see with some buyer agents is when they let their egos gets in the way of a good outcome at an auction -  determined to get a ‘win’ at any cost and show others they have ‘beaten’ another buyer or buyer’s agent.
I have seen occasions where two or more competing buyer’s agents bidding on the same property have driven the price well beyond its true value and this is not acceptable.
A buyer’s agent should never lead you into overpaying for a property to ensure an outcome for them. It can lead to problems financing the purchase, because if the bank valuations do not stack up, the client can be left in a precarious financial position.
Even worse, in my view, is where a buyer’s agent ‘switches hats’ and sells clients property they have bought on the market or developer stock to their clients. If a buyer’s agent tells you they have bought a great property they have come across and suggests you buy one too, but don’t charge you a fee, they are either profiting from the sale or earning a commission. While this is not illegal, the ethics of this in my view are highly debatable. At a minimum they should at least be transparent as to how their fees are being earned and who they legally represent in the transaction. In addition, if they own the property but charge you a ‘buying fee’ to purchase it, there is a definite conflict of interest here, even if transparent.
An emerging problem is accountants, financial advisers or others giving advice on which type of property to buy for a super fund (SMSF) or with a family law settlement.  Again an adviser must be qualified and have years of experience to understand what type of property will suit these different scenarios.
There has been some <a href="https://www.urban.com.au/news/32137-collusive-auction-bidding-not-prevalent-victoria-consumer-affairs" target="_blank">media attention recently on ‘collusive bidding’</a>, where multiple buyer agents from the one firm bid at an auction to try and secure a property for a client. I don’t think it is unreasonable to do this because as a buyer’s agent they are just trying to counter the tactics auctioneers and agents use to sell property. 
How can a buyer ensure they don’t end up using one of these buyer’s agents?
Be aware! In some states there is no legal definition of a ‘buyer agent’, and the term can be misused.
To ensure you are engaging a professional buyer’s agent, ask them these questions:
<ol>
<li>Are you a licensed real estate agent or agent’s representative? 
</li>
<li>Do you have a qualification as a buyer’s agent? 
</li>
<li>How and when do you get paid? 
</li>
<li>Do you only buy property or do you also sell property for developers? 
</li>
<li>How many clients do you work with at any one time? 
</li>
<li>What happens if you bid for me auction and miss out? 
</li>
<li>How many properties will you negotiate/bid on for me? Will my fee change or is it fixed? 
</li>
<li>How will you protect me from overpaying for a property? 
</li>
<li>What recent client testimonials can you offer as evidence of your work?</li>
</ol>
What prices are reasonable for a buyer’s agent to charge?
The level of a fee must be linked to the value of the service delivered.
Buyer’s agents charge fees in different ways – sometimes fixed or sometimes as a percentage of the purchase price.  Many charge an engagement fee upfront with the balance paid on securing a property, while others have no upfront fee.
One method isn’t necessarily better than the other, it all comes down to the firm’s policy.
The old adage ‘you get what you pay for’ is what all consumers who want to engage a buyer’s agent should always keep at the front of their mind.
When engaging a buyer agent, be clear about what your needs are, what service is being offered and if your needs will be met for the price.
If you don’t think the deal is good value, then check with other buyer agents until you find someone you wish to engage. Gut feeling, compatible working styles and personality can also make a difference.
Note: Some of this information came from Property Prosperity, with Sandkuhler’s permission.
YOU MIGHT ALSO WANT TO READ
Q&amp;A: <a href="https://www.urban.com.au/expert-insights/buying/31967-q-a-how-close-should-a-real-estate-agent-get-to-a-buyer-s-agent" target="_blank">How close should a real estate agent get to a buyer’s agent?</a>
<a href="https://www.urban.com.au/news/26385-sept-24-the-argument-foragainst-buyers-agents" target="_blank">The argument for/against buyer's agents</a>
<a href="https://www.urban.com.au/news/28308-how-buyers-agents-pick-the-best-performing-properties" target="_blank">How buyer's agents pick the best performing properties</a>
Select your buyer's agent wisely: <a href="https://www.urban.com.au/expert-insights/buying/28406-buyers-agents-tips-to-finding-a-buyers-agent" target="_blank">What you need to consider</a>
Property Observer readers, and industry members, what’s your take on the debate?
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Q&A: Should buyer's agents take commissions?

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Laorence Nohra is the chief executive of the Tradebusters Group, which includes Tradebusters Tradesman Concierge Services, Tradebusters Connect and Tradebusters Academy.
The <a href="https://www.tradebusters.com.au" target="_blank">Tradebusters </a>companies connect homeowners with a network of trusted tradespeople for a variety of projects. Property Observer spoke to Nohra about how renovators can avoid dodgy tradies and when it's time to tackle something on your own. 
When choosing a tradesperson for a renovation, what are the key things to consider?
<ul>
<li>Does the tradesperson have the right experience for the job? Each tradesperson is different so you want to make sure he or she has the right skill sets for your particular type of project.</li>
<li>Does he or she have the correct licences for the jobs they are undertaking? Licence requirements vary state by state and may be different depending on the size and value of the job</li>
<li>Are they covered by the right insurances?</li>
<li>Who will be doing the work - are they employees or sub-contractors?</li>
<li>Will they meet your timelines? Will this tradesperson be 100% focused on your project or do they have several running at the same time which runs the risk of your job dragging out. 
</li>
</ul>
How can renovators prevent issues with their tradesperson?
First and foremost, get the selection of your tradesperson right so that you don’t have any major or “unmanageable” issues. Unfortunately, issues become costly and stressful when the wrong tradesperson is selected, or, worse still, they have disappeared from the scene.
You'll also need to establish the track record of the tradesperson. Especially for major renovations - meet their recent customers and see the quality of the work. Find out what the customer experience was like with that tradesperson: did they meet deadlines, stick to budget and most importantly, how did they deal with issues that presented themselves along the way?
Find out if the tradesperson has clients that he or she does regular on-going work for, like local real estate agents or architects. How long have they know them and what can they say about the tradesperson's history and track record?
The thing with renovations is, sometimes thing do go wrong or expectations may not be completely met– but that can all be solved by selecting the right tradesperson upfront, and ones that care about their reputation and take pride in their work, as they are the guys that won’t leave until you are totally satisfied.
How can a person act when their tradeperson causes delays or doesn't complete a job as expected?
Always try and communicate your expectations around timelines and quality upfront.
In terms of how to “act”, don’t overreact and don’t be afraid to give feedback!  I have meet some homeowners that feel almost “afraid” to give a tradesperson feedback, but what they may not realise is that sometimes, unless you tell a tradesmen that there is an issue is, they may genuinely not be aware of it.
It’s always important to be as constructive as possible with the feedback and share the positives as well. Any reputable tradesperson will appreciate the feedback and work with you towards a positive outcome.
This article continues on the next page.
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How can a person decide whether to DIY a renovation job or hire a team?
<ul>
<li>Do you have the time to DIY? Will it mean taking time off work and can you afford that?</li>
<li>Know your objective for doing it yourself. If it’s to save money, have you calculated the cost of your time off work and lost annual leave (something many people forget). It may take you far longer to do it on your own, which means it could be cheaper to hire a professional.</li>
<li>If it is a property you are planning to sell or rent, and going DIY means taking an extra four, eight or 12 weeks to get it to market or to get rental income, then does it work financially? It could actually be more costly to go DIY.</li>
<li>Are you experienced enough to do a DIY renovation? It is important to know your capabilities so that you are not left disappointed with the results, or, more importantly, risk your safety and health. Also, it is a lot more costly to bring a professional to fix up a DIY job gone-wrong than just to have a professional do the job in the first place.</li>
</ul>
<blockquote>
"I'm noticing a lot more women taking charge of renovation projects and doing it extremely well" 
</blockquote>
 
 
 
 
What are some of your top tips for DIY renovations?
<ul>
<li>Know your limitations and when to call in the professionals.</li>
<li>Absolutely leave anything that requires a licence or that is structural in nature to the professionals.</li>
<li>Don’t take shortcuts in areas where quality is highly visible, like tiling or cabinetry.</li>
<li>Take all precautions and don’t do anything that could risk your safety or those around you</li>
<li>Think twice about a DIY renovation for a property that you plan to sell post-renovation. As a potential seller, you have a huge opportunity to maximise the potential sales value of your property and reap the profits through a well done renovation. Quality plays a big part in that. Bad DIY jobs do not go unnoticed by potential buyers and can destroy potential profits.</li>
</ul>
What are some of the key trends in renovation that you're noticing at the moment?
I'm noticing a lot more women taking charge of renovation projects and doing it extremely well.
There's also a big trend in doing all the joinery of a home in a more consistent and sophisticated style from kitchen, to laundry to living and bathrooms, and all at the same time. Kitchen renovations continue to be popular, especially as they can add considerable value to the property, and homes are getting more lifestyle focused, with extensions of living areas “outdoors”, with covered decks, and mini outdoor kitchens.
For more information on what to do when your renovation goes wrong, see <a href="/expert-insights/building/34105-the-block-glasshouse-first-room-reveal-tradie-disappoints-max-karstan" target="_blank">Lessons from The Block: What to do if your tradie disappoints</a>
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Renos, DIYs and tricky tradies: Q&A with Laorence Nohra

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A portion of property investing is often related to creating equity in a property – through developments, subdivisions and even renovations.
It's unsurprising, especially with shows such as <a href="/expert-insights/building/31764-want-to-join-the-block-2015-here-s-how-to-apply" target="_blank">The Block</a> and <a href="/expert-insights/building/33105-underdogs-adam-and-lisa-win-house-rules-season-two" target="_blank">House Rules</a>, that renovating is a much discussed aspect of real estate for both home owners looking to improve their properties, and investors looking for bang for their buck.
Our Tuesday Q&amp;A is with Renovating for Profit’s Cherie Barber,  where we ask about essential renovation skills, the experts you can’t do without and whether you can really make money from a quick cosmetic fix up. Which skill is more important for renovating – a good eye for design or good management skills? I’d say good management skills are essential, whereas a good eye for design is definitely an asset, but you can always call on professionals to help out with that.
In the renovating game, it’s those with exceptional time management and organisational skills, who are great negotiators and communicators, and who know how to accurately set a budget and stick to it… they’re the ones most likely to succeed and make money.
A creative eye, without all those skills, might get you a beautifully renovated property, but it could send you broke! If you could choose just one professional as your “go to” for a renovation project, who would they be? I rely heavily on all my tradies, so choosing just one is difficult, but I’d say a really skilled carpenter is your biggest asset. They’re a jack of all trades who can turn their hand to most things, whether it’s putting up a stud wall, putting in a kitchen, making built-in seating for a courtyard or just smart shelving.
You really need a second in command on a project that you can depend on, so a carpenter would be my “go to” guy if I had to choose just one. Do you think there are any difficulties for women renovating? To be honest, it took me a couple of renovations to gain my confidence working as the only female on a building site – and not just the only female, but the one in charge! Not all blokes are comfortable with that, especially in a male-dominated industry like the building trade.
I’ve found the key is to be calm, assertive and very clear and direct in my communication style.
Never get emotional. You’ll minimise misunderstandings and disputes by having everything in writing, so if there’s a disagreement over an aspect of work or money, you have your written contract and detailed scope of works to fall back on. “Firm, but fair” is an approach that tradies understand and respect, whether you’re male or female. 
Friendliness goes an awfully long way on a building site. No one likes a dragon lady! Can buyers really make money with a cheap cosmetic renovation?  (Must read: <a href="/expert-insights/33113-what-is-a-cosmetic-renovation-investment-terms-explained" target="_blank">What is a cosmetic renovation?</a>) Absolutely - loads of my students have done it! But you have to target the right properties.
If you’re looking for a two-bedroom apartment to renovate in a certain suburb, and you find that renovated and unrenovated two-bedders are pretty much selling for the same price, then it’s unlikely you’ll make money on the renovation.
You need to find decent “pricing disparity” – suburbs where buyers are willing to pay a premium for smartly renovated properties. That’s why careful research is so critical.
Buy the right property, in the right suburb, at the right price, and yes, you can definitely make money on a cosmetic renovation.   
During your shows you often point out that there are many ugly properties across, what are your most hated design features in a property? There’s a few thing buyers really don’t like. “Popcorn ceilings” are definitely one. They’re the spray-on ceilings that were especially popular throughout the 60s and 70s, and often contain asbestos. Visually they’re ugly and people don’t like the idea of asbestos in their home. Skinny little skirting boards and architraves always look cheap.
I hate bad layouts that don’t make the most of the available floor space, and unruly landscaping that was never properly thought out in the first place. And anything terracotta coloured – whether it’s tiled roofs, pavers or brick houses! Speaking of brick (especially those terracotta and blonde ones), rendering them is absolutely compulsory in my book. Are there any people who should not renovate a property? This probably relates back to question one, and the importance of excellent organisational, budgeting and negotiation skills. Those three cornerstones are just such a big advantage in the renovating game.
If you don’t have a single one of them, well, then you’re really going to struggle. Renovating isn’t an automatic road to riches. It takes time, focus, dedication and a lot of hard work to be successful.
Unless you’re willing to put in the hard yards to educate yourself about what’s required and then get out there and do it, you might be better off sitting at home. Trying to “wing it” is simply a recipe for disaster.
Cherie Barber is a public speaker, TV renovator and the owner of Renovating For Profit, a company that teaches everyday people how to buy and renovate properties for a profit. Cherie Barber’s <a href="https://www.renovatingforprofit.com.au/content/renovating-profit-home-study-cherie-barber-live-workshop-inclusions" target="_blank">next three-day Sydney workshop is August 21</a>.
YOU MIGHT ALSO WANT TO READ:
<a href="/expert-insights/building/14625-three-reasons-you-should-renovate-for-profit" target="_blank">Three reasons you should renovate for profit: Patrick Bright</a>
<a href="/expert-insights/investing/17574-to-renovate-or-not-to-renovate-that-is-the-question" target="_blank">To renovate or not to renovate? That is the question: Jo Chivers</a>
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Can cosmetic renovations really make money? Q&A with Cherie Barber

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Investors have been active in the property market with many seek out properties by themselves, but some appoint a buyers’ agent to assist them with the process.
<a href="https://rebaa.com.au/">Real Estate Buyers' Agents Association of Australia</a> (REBAA) president Jacque Parker talked to Property Observer about the kinds of property investors are looking for at present and why it’s worth considering the services of a buyers’ agent.
Why should an investor consider using a buyers’ agent?
The first reason is that you are given an edge by having an advocate on your side, just like when sellers engage a sellers’ agent.
Buyers’ agents are 100% independent because their service is being paid for by the buyer.
Not everyone buys property every day whereas buyers’ agents do that. They understand the complexities of the market and the process.
It’s important to have local knowledge of the market. Not everyone has that.
[Buyers’ agents] save time by doing the research and field work. As far as investors go, it’s narrowing down the suburbs, that will fit their budget and, if they have a strategy in mind, whether it’s a property that needs renovation or is in an area that offers potential capital growth.
What are investors looking for in properties at the moment? 
Most investors that come to us are looking for properties at the low end of the budget.
[Some are] looking for low entry [price] suburbs where they can buy something and do a renovation. Because we have that market knowledge, we can suggest areas that might suit them.
Most investors are looking for something that they don’t have to do anything to. Most people who hire buyers’ agents are time poor and while we don’t manage the renovation, we can help them on that by providing names of tradespeople and builders. We can provide guidance on how to start.
Investors are looking for yield and capital gain. People say you either get one of the other, but that’s not true. I’ve bought properties in regional areas that have achieved great capital gains and delivered high rental yields.
It’s about what your budget can allow and your cash flow can afford.
What are you seeing in the residential property market? 
Sydney is a sellers’ market. It’s an active market. There’s still more demand than supply.
The market overall is not one market though. That’s the trouble with any opinion from any so-called expert in the field. You are talking about a broad market. NSW is not one market. It’s made up of one huge capital city with lots of variation in its demographics, plus regional areas.
The market in the capital city has been very robust and over the past 18 months there have been many areas that have not boomed so much since 1993. It’s not sustainable, though. Property does have a boom, followed by slower growth and then plateaus out.
We don’t make forecasts but the key drivers are still in place because we have record low interest rates, increased consumer sentiment and positivity which goes a long way to accounting for activity and we still have affordable prices within Sydney and Melbourne.
Investors can still afford to get into the market for a reasonable amount and it’s relatively easy to get credit.
The past 18 months has seen all of those factors collide and there has been a boom in activity. It probably won’t continue, however that’s not to say it will go backwards. It will settle into a more stable and consistent growth pattern when interest rates start to rise.
Where are investors looking?
In Sydney, the median house price is almost $800,000. That’s not affordable. Most investors are starting off with units or looking further out for houses: <a href="https://www.urban.com.au/property-observer" target="_blank">Blacktown</a>, <a href="https://www.urban.com.au/property-observer" target="_blank">Penrith</a>, <a href="https://www.urban.com.au/property-observer" target="_blank">Campbelltown</a> and to a lesser extent <a href="https://www.urban.com.au/property-observer" target="_blank">Parramatta</a>. Regional areas have been attracting more interest as people can’t afford the capital cities.
Certainly there’s still a lot of interest in buying as close as possible to the city and maximising land value. Investors are trying to get the biggest piece of land they can as close to the city as possible and they’re prepared to go further out to get a piece of land.
Blacktown is still affordable for houses. Most investors buy properties under the $600,000 price range. Most people go in with $400,000 to $500,000.
What does REBAA do? 
The Real Estate Buyers’ Association of Australia is the only national body for buyers’ agents. All of the members are independent and none of them sell real estate.
People are either an independent buyers’ agent or they’re a sellers’ agent that calls themself a buyers’ agent.
In the US, they have a model where the commission is split between the sellers’ agent and the buyers’ agent. Commission there for sellers is around 6%. In Australia, we don’t have that model. It presents a danger of conflicts of interest.
All the buyers’ agents who are members of REBAA are licensed and carry professional indemnity insurance, which is not mandatory throughout Australia. They have to be endorsed by two other buyers’ agents to gain membership.
How can investors tell if a buyers’ agent is independent?
You have to be careful. Check their license number with the state or territory Fair Trade website. Ask them if they sell real estate.
If they receive any form of commission from any selling agents they have to disclose that and that’s where it gets grey and murky. If they sell real estate, they are not a buyers’ agent.
A buyers’ agent is not selling you property. They are looking for property that meets your criteria and presenting those properties to you. It’s very different.
What about property spruikers selling to SMSFs?
It’s not a new problem but the fact is that some financial planners and advocates are asking for big fees from developers because they see it as an easy way to make commissions.
Buyers have to ask what else is out there that compares to the property they are being sold and realise that the recommendation is a clear conflict of interest.
Even if the fee is disclosed with the SMSF property developers the buyer ends up paying an inflated fee which covers the cost of those commissions. You are better off paying someone to look for property for you independently.
Buyers need to be a bit smarter when they go to anyone who is giving them advice and ask them why they are giving that advice. Knowledge is power. Don’t be afraid to ask questions. 
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Why investors should consider using a buyer's agent: Q&A with REBAA's Jacque Parker

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Today Urbis released its quarterly Brisbane Apartment Insights report, detailing the changing conditions and trends affecting Brisbane's inner city apartment market.
Property Observer spoke to Urbis' national director of residential Jon Rivera about what's driving growth in Brisbane's apartment sector and what this means for the property market. 
What are some of the growing trends in Brisbane's inner city off the plan apartment market?
We've never really seen this much activity in Brisbane.
It's a pretty exciting time for Brisbane, with this level of development and also infrastructure growth, through masterplans and government infrastructure. 
Brisbane is growing very quickly, from a demographic point of view. Nationally, there are some major changes happening right now in the residential market, and we're seeing new fundamentals emerging. 
What demographic trends are driving the growth of the inner-city apartment market? 
The residential market is built off two major demographic groups: the 25-30 year old bracket, which is very large and growing significantly, and baby boomers.
They're very complex groups, so I normally hate to say "Gen Ys and baby boomers". But they are major demographic groups in the residential market. 
We're seeing major changes in the type of properties that they're looking for. The trade off they have to make to cope with the cost of living is definitely having some implications for demand.
We're also seeing changes in infrastructure and where that's being invested. We're seeing much less urban sprawl and much more upwards development. It's cheaper to upgrade and put infrastructure in central areas where there's already a major population, rather than emerging regional areas. 
Where is apartment growth focused? 
The major development is happening is along corridors where there is existing infrastructure, or proposed future infrastructure. Running from <a href="https://www.urban.com.au/property-observer" target="_blank">Wooloongabba</a>, <a href="https://www.urban.com.au/property-observer" target="_blank">West End</a>, <a href="https://www.urban.com.au/property-observer" target="_blank">South Brisbane</a>, coming through to the CBD and going into <a href="https://www.urban.com.au/property-observer" target="_blank">Fortitude Valley</a>, <a href="https://www.urban.com.au/property-observer" target="_blank">Bowen Hills</a> and going all the way up to <a href="https://www.urban.com.au/property-observer" target="_blank">Hamilton </a>- that's where we're seeing a lot of supply and demand.
These emerging developments are all still fringe based. The CBD is probably undersupplied - it's got a few developments on their way, but it predominately the growth is in the fringe areas. 
For apartment developers, there were better opportunities in the fringe. In South Brisbane, there was very little supply, and it made perfect sense to develop because the infrastructure was already there. The same was the case in Fortitude Valley. 
Is there a threat of oversupply in the Brisbane apartment market?
There are a couple of things we need to get clear on in terms of apartment development from a supply point of view. We often talk about 23,000 apartments in the inner Brisbane market, which are either in the application, presale, or approvals stages, but you can't look at thin air.
We care more about settlement, which has been pretty fragmented. There is a lot of stock coming through the off the plan through to the end fo 2015. It's a very hot market, but it really is about that settlement.
Rents are definitely aligning. They're starting to move away from the inflation period we had that was created on low supply. That, to me, is saying that developments are doing what they should.
2015 is definitely going to be very competitive for the off the plan apartment market. We're probably going to see a lot of developers not get off the ground, which is going to affect supply.We look at a lot of these developers playing in Brisbane and to be honest, there are some that have not proven themselves yet.
There are still a lot of challenges when it comes to taking that glut of supply and making it a tangible product. 
At the moment, there are going to be areas that are going to have some fluctuations, which always happens. We're going to need continued population growth, through migration and international students, which are very important to Brisbane's inner city rental market.
Brisbane is also very closely related to what's happening in Sydney, and prices are obviously high there, which may drive demand for Brisbane.
The one thing that we definitely know is that we're going to see more renters come through.
The cost of living is unfortunately not getting any easier. In Australia, the employment opportunities are very centralised. The infrastructure is very challenging as we go further out, and in the capital markets, the 15 kilometre to 20 kilometre ring from the CBD is very difficult market to get into for young buyers. 
The ability to own their own home is a big trade off for younger people - if they buy further out, that's going to cost them more in terms of fuel. Thats why we're looking at the apartment market. Sure, supply is coming through, but the challenges facing buyers and the demand growth is here to say.
It will go through the fluctuations, and developers are great at getting a good thing while they can, and then we'll see a correction.
How will the influx of new apartments affect Brisbane's rental market?
We are hearing that rents are softening. 
The owner occupier market is really taking an effect on the existing apartment market and the more mature stock on the market, taking that away from renters. So the new apartment market is obviously catering to renters.
Rents have been quite inflated, so we have a buffer. Now, we can make things align, and it's getting a bit better from an affordability point of view. The time to fill an apartment is growing, but still pretty good. Instead of one week, it'll take a month or two months to fill an apartment.
To me, this is a normal thing, and means developers are doing their jobs. 
Historically, December always seems to have a lot of vacancies, and so does the March quarter because it includes January. In June it always comes back again, to around the 3% mark. 
There are going to be pockets where there are going to be some realignment in rentals, which I think is positive. It's a good thing for the renter, who can see what amenity they get for their dollar. There's going to be some good choice there, and affordability will improve. That's a good thing.
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Brisbane's inner city apartment market: Q&A with Urbis' Jon Rivera

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A commercial office building at 2-6 Bowes Street (pictured above) in Canberra's Phillip was recently launched after undergoing a significant refurbishment to improve its energy efficiency.
The building, owned by boutique property fund manager Quintessential Equity, is targeting a 5-star National Australian Built Environment Rating System (NABERS) energy rating. The company recently acquired two other commercial properties in Canberra, 14 Moore Street and the Optus Centre in Civic.
We spoke to Russell Bullen, head of Property at Quintessential Equity, about energy efficiency in the commercial property space.
How has the demand for "green" office spaces changed over the past ten years?
It's certainly evolved significantly in that time. I think the whole "green movement" gained a lot of momentum, and it was certainly assisted by the government's changes to legislation around disclosure.
If you sell or lease a building, you now have to disclose your NABERS  energy rating.
Up until the changes, it was really dependent on market forces. It was up to tenants to really demand energy efficient buildings, or really up to the landlords, off their own backs, to disclose. So once the legislation came in, it provided more accountability around energy efficiency - if you had a building with poor energy efficiency, but didn't have to disclose it, there wasn't much of an incentive to improve that.
I think that's probably been the biggest change in that time period.
What are some elements that make commercial office buildings "green"?
Probably one of the things that gets forgotten is management.
And one of the biggest improvements in energy efficiency, and reducing our carbon footprint, is good management. We have a national engineering manager whose main focus is just that. That is probably one of the biggest impacts that you can make to a building - making it operate efficiently.
Apart from that, you can introduce things that are very costly, in terms of plant and equipment. You can improve heating and chilling and make that more energy efficient, and also use computer building management systems to improve efficiency.
What are the benefits of energy efficient office buildings to investors and tenants?
From a tenant's perspective, the operating costs are less.
We've got a project in Parramatta, where we were awarded Best Commercial Building Energy Efficiency Project by the Energy Efficiency Council. We've seen the electricity costs in that building fall by more than a third from work that we did. We were able also to achieve a four and a half star NABERS energy rating there.
The reduction of cost is a real and tangible benefit, and you also of course have an environmental benefit.
But also buildings that have a higher NABERS rating have a greater level of comfort and reliability, which is better for landlords because it improves tenant retention. From a landlord or investor's perspective, if you can make a building run efficiently, reliably and comfortably, you're going to retain tenants for longer.
Outside of Canberra, are there places where energy efficient office spaces are in greater demand than others?
If you had to say one location where energy efficient buildings were more in demand, it probably is Canberra. In Canberra, over two thirds of tenant demand is from the government (either Commonwealth or ACT). They actually have requirements within their leases that buildings have to achieve certain levels of energy efficiency.
Outside the ACT, in general, CBDs where there are large corporations who also have efficiency targets also show strong demand.
What role do you predict "green" innovation and energy efficiency will play in the commercial property market in 10 years time?
It's a difficult question, because there was certainly a strong impetus for energy efficiency, but when the GFC [global financial crisis] happened, there was a focus on cutting costs. And that's the thing with achieving energy efficiency - there is an upfront capital cost.
But if you take a 30,000 foot view, it's inevitable that it will continue to grow and get more traction. Disclosure obligations aren't going to go away. Companies are more and more focussed on their costs, and that's only going to continue in terms of ongoing operations. Outgoings are a significant part of companies' operating costs - so energy efficiency is not going to go away.
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Q&A with Russell Bullen of Quintessential Equity

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Marketing your home for sale through a real estate agent leaves you in their power.
You need to trust them to effectively guide you through how the campaign for your property should be and how much you should be spending.
You must rely on them to ensure you do not overcapitalise, and in a space where the arguments over print versus online advertising and even the use of signboards are rife, it's understandable that you might be feeling a little lost.
For our Tuesday Q&amp;A, Property Observer asked Century 21's national training manager Alastair Kay all about advertising, marketing and his own experiences in real estate.
What was the most exciting property you ever marketed, and how did you express this in your marketing?
The most exciting sale I’ve been involved in was the successful transaction of a property in Banksia Beach, Bribie Island's premier postcode which is known locally as millionaire’s row.<img src="/images/2014/08/12/kay-aug-12-one.png" alt="" style="float: right;">
My point of contact for the property was the owner’s son, who lived between the Bribie home and his main residence in Brisbane. The son demanded excellence in everything he was involved in, having previously served in the military and being at that time employed as a well-respected prosecutor.
After much discussion, we chose to take their home to auction as it had only attracted five inspections after having been on the market for over two years. This high risk strategy required a significant investment to ensure we attracted the right buyers, so together we created a professional, targeted marketing campaign which required an investment in excess of $30,000 from the vendor.
The four week auction campaign attracted in excess of 100 viewings, an incredible amount of interest for the global financial crisis and a figure that dramatically exceeded the seller’s expectations. The auction was held at twilight on the deck of the home overlooking the Pumicestone Passage and was sold 24 hours later, after being passed in at the auction.
How do you tailor advertising and marketing to each individual property and vendor situation?
The most vital consideration for tailoring marketing and advertising is finding out what the seller hopes to achieve from the sale, and how they’d like to achieve it. More specifically, I like to ask the vendor questions relating to the sale based around three key areas: price, privacy and timing.
If obtaining the highest price possible is the most important result they want to achieve, I will show them what marketing is available to them and what attracts the most enquiries. I’ll also provide them with all the options and assist them with building their own campaign as the more the vendor can be involved, the better the likely result. Some real estate agents forget this and often present completed marketing campaigns, or only a few options. The danger with this approach is that it overlooks the fact the vendors are transacting what, for most people, is their single largest asset. This means that peace of mind in knowing that everything possible is being done to sell it at the best possible price should be of paramount importance.
Some vendors are worried about their privacy, a concern which may be driven by any number of different reasons. In these instances, I’ve occasionally been asked to design a discrete marketing campaign where a particular group of buyers is intensively targeted, or asked not to advertise at all and merely shop it around to interested buyers I’m aware of in the community.
<blockquote>
After much discussion, we chose to take their home to auction as it had only attracted five inspections after having been on the market for over two years.
</blockquote>
Timing is also crucial to tailoring a marketing campaign – if the vendor is desperate to sell, the only choice is often an intensive marketing campaign which showcases the property to as many potential buyers as possible.
What questions do vendors commonly ask around marketing?
Generally vendors want to discuss how much a marketing campaign for their property is going to cost, because they are often concerned that there can be no guarantee that they will achieve the price they hope for. These are legitimate concerns which your real estate agent should be comfortable addressing. Typically, I’ll explain how it’s in my best interest for the property to sell as real estate agents only ever get paid when a property settles.
Successfully transacting a property requires a well thought-out, structured and targeted marketing campaign that is designed to meet the vendor’s specific needs and requirements. If your agent isn’t paying adequate attention to your marketing requirements, it’s probably best to consider speaking with another agent to compare approaches.
Turn over page for more, including the difference between auction and private treaty marketing.
<hr class="system-pagebreak">
How does advertising differ between auctions and private treaty marketing?
There isn’t a great deal of difference, however vendors tend to invest less into marketing when they sell via private treaty. This is because when property is being transacted by private treaty, all that’s required is one passionate buyer to place an offer, as opposed to an auction where you want to attract several passionate bidders to compete for the property.
Regardless of the vendor’s preference regarding how they sell their property, I always recommend investing in the strongest campaign possible, as this has the highest possibility of finding the buyer that is going to pay the most.
I always caution that marketing for a property should be considered an investment – not a cost. This is because vendors often find that they’re able to achieve significantly more for their property through a premium marketing campaign, and doubling, or even tripling, their initial marketing investment.
For which type of properties does print advertising work?
I always recommend vendors consider every avenue of marketing available to them, as the reality is we’re after the buyer for the property – not just a buyer. This distinction is crucial, as marketing for the buyer means that you’re exploring all possible options, not just pursuing the cheapest, easiest option.
When I was selling in a rural location on the Queensland coast, most vendors wanted to choose a local paper that had a readership of 20,000 people every week and more often than not, found that they weren't getting the result they'd hoped for. My consistent recommendation to vendors was that they choose a different paper that had a greater readership of 950,000 people.
Doing this did mean an increased marketing investment; however, they increased attendance at open for inspections by an average of five buyers per week. This helped achieve a premium price for every seller who chose to add paper marketing to their campaign.
The moral of the story is that there’s still a place for paper advertising, especially newspapers that have a larger, more targeted circulation. There’s no use in having 10,000 people viewing your property online if 9,950 are in another state and only browsing for fun.
Are there any aspects of advertising where vendors should be spending less or more?
As you’ve probably realised, I'm a big believer in creating and executing the best campaign possible. Vendors only get one opportunity to make a good first impression and selling your home is no different.
There are ways of cutting costs. But in my experience when vendors try to cut costs in their marketing, they ultimately end up cutting the price they’re able to achieve for the property. I recently sold a unit on the waterfront by auction which the vendors had been contemplating listing at a price and seeing what happened.
The vendors were working on the assumption that because an identical unit above theirs sold for $360,000 only a few months earlier, they'd get a similar price. After talking through a range of options, they chose to invest into the best marketing campaign they could as they agreed that they’d only get one shot at introducing the property to the market.
By taking this approach they achieved a result of $418,500 – well above the recent sale, and a result that only came about because the marketing campaign reached the market completely. Had they sold by private treaty, they had planned on listing for $389,000.
What does the best listings copy look like – and what tips do you have for agents who consistently get it wrong?
Listing copy is one area that does need a lot of work in Australian real estate. Unfortunately, it often boils down to time and writing skills, and often agents will be a little short on both.
The best listing copy will portray the property in a positive light, while providing plenty of detail about the local area with a quirky edge which makes the property stand out. Some agents tend to go a little details-heavy, writing copy that ends up reading like an extended novella. Some agents, on the other hand, try too hard to be memorable and sacrifice too much detail. The ideal copy will get this balance right, which is a delicate process.
How much does it really cost to advertise a property?
For a long time now agents have used a rule of thumb that says that the marketing budget of a property should be roughly 1 per cent of the price of the home. Therefore if the value of the home is roughly $500,000 then a budget of $5,000 would be advisable.
However, this isn't always accurate and my advice is to recommend the campaign which will give the agent the best opportunity of achieving the highest price for the home. Naturally all real estate agents have to work within the constraints of the vendor’s budget, but often the vendor finds it’s worth the extra investment as they’ll likely achieve more at the sale.
One property that I transacted for $1,600,000 had a vendor who invested in a marketing campaign in excess of $30,000. Due to the nature of the property and its target market, anything less than this would have been inadequate and a waste of money. 
If there's someone you'd like to see asked about a topic for a Tuesday Q&amp;A, email <a href="mailto:jduke@propertyobserver.com.au" target="_blank">jduke@propertyobserver.com.au</a>
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