Property Value

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<p><span style="line-height: 1.3em;">How does a property-valuer come up with distinct values of the same property and all within four weeks?</span></p>
<p><strong>Background: </strong></p>
<p>A couple were splitting up amicably and both accepted to explore the opportunity to buying each other out. Each party made loan applications to separate lenders for finance. Both parties agreed to buy the other out at $520,000.</p>
<p><strong>First Valuation - Strike one:</strong></p>
<p>The first attempt at financing the purchase was made and a property-valuer was engaged by lending body to provide a valuation report. The mortgage broker received notice that the valuation report provided to the bank, stated the value of the home was only: $500,000.</p>
<p><strong>Second Valuation - Strike two:</strong></p>
<p>A week later, the second party attempted to obtain finance with a different lender and the lender appointed their panel valuer. The valuer on their panel, so happens to be the same valuer. BINGO!! You guessed it, the valuation came back at $500,000.</p>
<p><strong>Third and Final Valuation - Strike three?</strong></p>
<p>The subject property is placed on the market. The agency suggested a cleanup of the garden and staging of the home. A keen purchaser exchanged contracts at $545,000.</p>
<p>The new purchaser’s lender sent their panel valuer, 4 weeks after the first valuation was obtained, now wait for it: YES, the same valuer appeared on the scene.</p>
<p>This time however, the property valuation report came in at contract price: $545,000.</p>
<p>What happened from the first to the third valuation other than; mowing lawns and a simple make-over?</p>
<p><strong>Leave me your thoughts:</strong></p>
<p>Before you go jumping to conclusions and for the savvy mortgage brokers out there, here is a little more background information;</p>
<ul>
<li>The couple had approximately $180,000 equity in the home.</li>
<li>The new purchaser obtained a 95% LVR on their mortgage. Figures disclosed to the agent at the time of purchase. </li>
<li>The property settled on or about three months ago; time calculated from publishing of this article.</li>
</ul>
<p><strong>Now please: this is your turn to enlighten me with what just happened? I welcome your comments and this with great anticipation. </strong></p>
<p><em><span>EDWIN ALMEIDA</span> is licensee in charge of <a href="https://www.just-think.com.au/" target="_blank">Just Think Real Estate</a>.<a href="https://www.just-thin.com.au/"><br></a></em></p>
<p><em>He is also the creator of <a href="https://www.youtube.com/user/JustThinkProperty" target="_blank">Oz Real Estate.TV</a> and a presenter for <a href="https://propertyinvestingvault.com/" target="_blank">propertyinvestingvault.com</a>.</em></p>
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How can property valuations be miles apart? Edwin Almeida

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<p>Fractional property investing platform BrickX has updated the valuations for six of its properties in Sydney and Melbourne, with growth varying from 0 to 7.4 per cent.</p>
<p>The valuations were done by independent valuation firm Preston Rowe Paterson in June 2017.</p>
<p>BrickX, which buys properties and splits each one into 10,000 units or ‘Bricks’ which investors can then buy, has been on a buying spree in the last few months. It purchased six properties between April and June, five in Sydney and one in Melbourne.</p>
<p>In its year-end sale, the investing platform <a href="https://www.urban.com.au/news/72333-brickx-waives-transaction-fee-for-bricks-in-end-of-financial-year-sale" target="_blank">waived the transaction fees</a> for buying or pre-ordering ‘bricks’ for its Brunswick property (above). The company charges a the transaction fee of 1.75% on every purchase of ‘brick’ or while selling ‘bricks’.  </p>
<p>The biggest change in valuation was for a two-bedroom house in Annandale, where the property value rose 7.4 per cent in the last six months to $1.45 million as at June. The growth was in line with the wider suburb index, BrickX said.</p>
<p>Brick valuation increased 8.81 per cent to $112.84, taking into account the acquisition costs and cash reserve, BrickX said. </p>
<p>Meanwhile, a one-bedroom unit in the Sydney suburb of Enmore remained constant at $650,000 compared with six months before. In fact, the new value of a ‘brick’ is $67.48, a slight fall from December’s $67.82. The same was the case with a two-bedroom unit at Mosman, which was steady from its December valuation. </p>
<p>The property was valued at $1.4 million in June while the ‘brick’ price actually edged down 0.51 percent to $143.43 per ‘brick’.</p>
<p>Among other properties with notable growth was a two-bedroom unit in Bondi Beach, which increased 3.7 percent in value to $1.4 million from its initial purchase price of $1.35 million. BrickX said the growth was also in line with the overall growth in the suburb.</p>
<p>The brick price rose to $100.19 from an initial $96.</p>
<p>Another two-bedroom unit in Double Bay showed a growth of 3.4 percent in value at $1.35 million on the initial purchase price in September 2016. This property exceeded the suburb index, said BrickX.</p>
<p>The value of a ‘brick’ is now $98.46, a 3.64 percent increase from the initial $95.</p>
<p>The only property with an updated valuation from Melbourne, was in Prahran. This two-bedroom unit rose 1.3 percent to $1.19 million and BrickX said it performed in line with the wider suburb index. </p>
<p>The ‘brick’ also rose a modest 0.44 percent to $123.88.</p>
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Annandale house provides biggest boost to BrickX investors with 7.4 percent growth in six months

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<p>GUEST OBSERVER</p>
<p>Sound neighbourly relations and an attractive streetscape have the potential to improve the value of a property and slash days on market considerably for those vendors seeking a swift sale.</p>
<p>The streetscape refers to the appearance of all houses, footpaths, gardens and landscaping along a street.</p>
<p>But it is possible to upset the local streetscape applecart with just a single property eyesore, which has the potential to turn away buyers now and in the future.</p>
<p>The infamous and so-called 'hoarder’s home' in Bondi, in Sydney’s Eastern Suburbs is an example.</p>
<p>This is an extreme example, however it has been an issue for those living in Boonara Avenue, Bondi for many, many years, and has undoubtedly impacted the values of homes located near this controversial property.</p>
<p>The streetscape is the visual identity of a neighbourhood and plays an important role in facilitating interaction between residents and creating a community.</p>
<p>It also contributes to building the value of our properties, which for many of us, are our most important investment asset.</p>
<p>The property industry talks ad infinitum about the importance of presenting a property in its best light to potential sellers.</p>
<p>However, a subtler element is how your street presents to potential buyers. The streetscape is really the first impression for potential buyers, even before they walk through the front gate.</p>
<p>To be fair, individual owners can do little about the collective streetscape, but the value of a good looking street, where all the gardens are well-tended, can have an impact on the saleability of a property.</p>
<p>It’s worth keeping in mind that by collectively maintaining the kerbside appeal of all properties in a street, owners can maintain and grow the values of their properties.</p>
<p><em>Angus Raine is executive chairman, Raine &amp; Horne and can be contacted <a href="https://www.raineandhorne.com.au" target="_blank">here</a>.</em></p>
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Love thy neighbour – it could be worth tens of thousands to the value of your home: Angus Raine

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<h2><span style="font-family: Tahoma, Helvetica, Arial, sans-serif;"><span style="font-size: 12px;">GUEST OBSERVER</span></span></h2>
<p>In the resource regions – Western Australia and the Northern Territory – property values continue to fall.</p>
<p>Even though quarterly growth continues to be in negative territory in the Perth and Darwin house markets, the figures were slightly better in the April quarter compared to the March quarter, suggesting an ease in the fall of growth. Annual growth for these markets is presented in Graph 3.</p>
<p><strong>Graph 3: Annual Growth Rates – Perth and Darwin</strong></p>
<p><a href="/images/2016/06/03/Graph_3.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/06/03/Graph_3.jpg" alt=""></p>
<p><em><span>Source: Residex</span></em></p>
<p>The graph shows that property values have been falling in these areas throughout much of 2015 up to today. It has been established that movements in commodities can be closely tied to economic and housing market performance in WA and the NT. Despite a small rally in the commodity price index in the first quarter of 2016, iron ore is still less than one third of what it was worth when it peaked at US$180 in February 2011.</p>
<p>Additionally, profits from the mining sector are not as widely spread throughout the states, as the operational phase of the mining boom employs less labour than the construction period. Interestingly, it seems that the Queensland labour market is suffering a higher unemployment rate (6.5%) in response to mining divestment. This could be because of the tighter labour markets in WA and the NT, where workers have higher mobility in response to mining and construction projects.</p>
<p>Across the country, the transition from the mining to service industries is overstated in its ability to absorb lost jobs and income. The official Australian unemployment rate was 5.7% in April (seasonally adjusted), unchanged from the previous month. However, April saw the loss of 9,300 full time jobs and an increase in 20,000 part time positions. Despite the official statistics, employment is being picked up through more precarious work.</p>
<p>Given that part time and casual work has been linked to reduced bargaining power for pay increases, it is no surprise that increases in Australia’s annual wage growth reached a historic low of 2.1% in the March quarter. Low wages may also be contributing to low inflation, which is in turn fuelling expectations of further cash rate cuts this year.</p>
<p>Moving forward, I would expect modest falls in house values in the major east coast cities, while units and resource market dwellings adjust to changed conditions in demand. Low interest rates and falling dwelling prices may present opportunity in certain markets across the country, but purchasers should look for strong and diverse economic fundamentals in the markets they choose to buy in.</p>
<p><em>Eliza Owen is the market analyst for Onthehouse.com.au. She can be contacted <a href="https://www.onthehouse.com.au/" target="_blank">here.</a></em></p>
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Value declines in resource regions show signs of easing: Eliza Owen

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<p><span style="line-height: 1.3em;">Vacant land sale prices over the 2014-2015 financial year increased by 6% across the combined capital cities, according to CoreLogic RP Data.</span></p>
<p><span>CoreLogic RP Data's Property Pulse found for the 25 years to June 2015, combined capital city median vacant land prices increased by 417% and by 422% across the combined regional areas.</span></p>
<p><span>CoreLogic RP Data research analyst Cameron Kusher said the median lot size for capital city vacant land has seemingly hit a trough having been relatively stable over the past two years - meanwhile lot sizes have trended higher over the past year in regional areas.</span></p>
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<p><span>“With higher prices and fairly steady land areas, the rate per square metre of land has continued to rise over the past year across the combined capital cities while it has fallen in regional markets,” he said. </span></p>
<p><span>"Our research shows that median lot sizes have been reasonably stable across the combined capital cities over the past twelve months. In regional markets, it has actually risen by 8.3% over the past year. </span></p>
<p><span>“On a rate per square metre basis, vacant land in Sydney and Perth is much more expensive than all other capital cities. The rate per square metre has generally risen over the past year.” </span></p>
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<p><span>The report noted v</span><span style="line-height: 1.3em;">acant land prices are much higher than all other capital cities in Sydney, with the cost of vacant land has risen sharply over the past year in Sydney, Melbourne and Perth.</span></p>
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Capital city land prices keep rising: CoreLogic RP Data

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<p><span>The valuation firm Herron Todd White has issued its latest</span><span> property clock for units - a simple broad brush means to suggest where property markets are - and what direction prices are moving in.</span></p>
<p>The valuation firm has included capital and regional cities on the property clock for unit price direction.</p>
<p><a href="/images/2015/09/03/Screen%20Shot%202015-09-03%20at%202.32.37%20PM.png" target="_blank">Click here to enlarge</a>.</p>
<p><em>For more information, <a href="https://www.htw.com.au/" target="_blank">click here</a>.</em></p>
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Rockhampton, Horsham, Newcastle units at peak pricing in September HTW property clock

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<p><span>Combined capital city dwelling values are 5.3% higher for the three months to the end of August, according to CoreLogic RP Data, despite a slowing in the appreciation rate.</span></p>
<p><span>CoreLogic RP Data head of research Tim Lawless said dwelling values across Melbourne were 8.0% higher over the rolling quarter, and Sydney values were up 7.4%.</span></p>
<p><span>"Both cities have seen dwelling values trend substantially higher than other capitals, where the third highest growth rate over the three month period was Brisbane, which showed an increase in values of 2.2%," he said.</span></p>
<p><span>"While the three largest capital cities, together with Hobart, have all recorded growth in dwelling values over the past three months, half the nation’s capital cities have recorded a fall in values. Darwin recorded the most substantial decline in values with a fall of 3.2% over the three month period, while Perth values were down by 1.5%, Canberra values were 0.8% lower and Adelaide values are slightly lower, at 0.1%.”</span></p>
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