Paul Wrigley of Ray White Toronto agrees with Brian White that the Australian residential market is not overvalued by 40% as indicated in the BRW. Ray White Toronto has strong buyer demand and high confidence levels in both buyer and sellers Yes, now is a good time to upgrade, especially to a waterfront property as the gap between the non waterfront market and waterfront market is possibly the smallest it has been and could be in the future.
The White Paper – News & Views from a Real Estate Agent July 2011
Business Review Weekly (BRW) is a front line business magazine – distributed nationally. Phil Ruthven is a key and a constant regaled contributor on their special expert panel.
Thus his recent comment “the fact that our homes are 40% overvalued” needs to be seriously considered. (Presumably much the same predictions apply for New Zealand.)
Since this article was published, we have been besieged by numerous anxious home owners frightened by the “fact” nature of his bland statement. If it is true, then vast numbers of this country’s citizens will be financially ruined. Regrettably, Mr Ruthven provides no evidence for his “fact” nor does he give any further back up advice. Does he mean that prices are about to collapse in the very near future? Or just an inevitability that will suddenly materialise one day?
Certainly, overall property prices in the last 12 months have eased, with many areas already experiencing a significant reduction. Well, what about Ray White results for June. What do they show? How do we respond to his predictions?
At $2.1 billion, it is very much business as usual (relating to the monthly patterns since January 2011). All markets had significant continuing activity with any slight further easing in values since January covered by an increased number of sales. There is no doubt that many are believing that current conditions reflect smart buying opportunities. The recent decision by the Reserve Bank of Australia to hold interest rates at current levels (the New Zealand Reserve Bank even decreased theirs early this year) may well suggest that we may be in the “bottoming” part of the cycle. A constant comment is that this is the perfect time to “upgrade” one’s residential property. It makes more economic sense to sell and upgrade when prices are constrained than when prices are out of control.
Relatively few of our offices report that they have an oversupply of stock for sale. Building activity is at a low level. So a dramatic oversupply is not looming as a fundamental problem. We can’t understand the unqualified nature of the BRW prediction. What remarkable confusion exists amongst our broadcasters of our future.
Enquiry on raywhite.com shows that Asian investors’ interest in Australian property continues at recent levels, but enquiry from the USA has dropped 20% from earlier this year.
So the high Australian dollar is not smashing international enquiry for our properties with some significant Australian investment sales being consummated during the month by international purchasers. Our own Bruce Whillans at Ray White Commercial in Auckland achieved several high profile sales totalling $44 million for a remarkable month giving evidence that both non-residential markets are active.
Australasia continues to be seen as a safe haven.
The Rural market has been in turmoil in the last month from the ban on livestock exports to Indonesia. A number of pending sales of significant Rural properties was quickly put on hold.
Our Loan Market volumes continued at 10% above last year’s levels – again outperforming the industry.
What’s New at Ray White?
On the International front, Paul Kim commenced RW Korea in Seoul with a team of 6 qualified professionals. Initially focused on commercial management, it is destined to become a significant force. We are delighted to welcome his team into our broadening Asian network. Further announcements are anticipated shortly.
The formal launch of the NSW practice of Ray White Hotels was a highlight. It was immediately followed by a full page advertisement in “The Australian” featuring a big number of RW Hotel marketing campaigns.
We welcome the Remax office from Christchurch which re-branded to Ray White on July 1. Readers may well be surprised at the current level of sales activity in this city. The positive action by the New Zealand Government in acquiring destroyed/damaged homes is enabling residents to acquire new homes in areas not so impacted by recent earthquakes. Other offices opened in all our key markets, excluding the Northern Territory.
The appointment as leasing agents to a huge new shopping centre at Canberra’s airport for Bob Walsh and Bill Kanellopoullis is the biggest recent achievement for their RW Retail operation in New South Wales. The inclusion of Costco in the project – a new operation to Australia – shows that retailers – even in a lacklustre retail market – respond to exciting new initiatives.
On a Commercial note, Russ Parham in Perth has concluded some major industrial leasing successes. The Perth Commercial market is in terrific shape.
We foreshadowed the Viridian project appointment from its Receivers at Noosa Heads. This is a major appointment which entails the sale of 160 prime units. A major marketing campaign is about to commence and will offer fantastic value. (Already six units have been sold, with many others already in train. More proof that when exceptional value is portrayed, buyers materialise.) The Ray White Projects specialist team is anticipating more appointments. (An announcement of a major appointment in the Australian snowfields of Falls Creek is expected shortly.)
By Brian White
Joint Chairman Ray White Group