http://www.johnmcgrathblog.com.au en-us Mon, 06 Feb 2012 12:00:00 +1100 Mon, 06 Feb 2012 12:00:00 +1100 http://blogs.law.harvard.edu/tech/rss Weblog Editor 2.0 marketing@mcgrath.com.au (John McGrath) WebErrors@mcgrath.com.au (Johns Blog Admin) marketing@mcgrath.com.au (John McGrath) Mon, 06 Feb 2012 12:00:00 +1100 http://www.johnmcgrathblog.com.au/blog/2/81/ http://www.johnmcgrathblog.com.au/blog/2/81/ Article As mentioned in my earlier post this month, there seems to be a sense of renewed enthusiasm in 2012. This actually surfaced just prior to Christmas off the back of the rate decreases. It's too early to tell if the upper end of the market will follow suit but property under $1m in Sydney seems popular in the early stages of the year. If the Euro zone survives I can see a strong year in property as most buyers are ready to go, just waiting for some positive leads, especially at the top end. The lower rates, with even lower 3 year money available, combined with some slight price corrections throughout 2011, makes property more quite a bit more affordable this year and that will be attractive to buyers. If Europe gets worse we will have another soft year as the market nerves would continue. My best guess is that we will scrape through in Europe and that will be good for our economy and of course the property market. That being the case we would see price increases in the higher demand markets. The markets that have typically moved fastest after a market downturn have been the Inner City & Coastal areas, where buyers are quickly buoyed by a strengthening economy and flock to property. That being the case, the outer areas of Sydney which have been harder hit by unemployment and mortgagee sales may take a little longer to recover, but lower interest rates will be of greater benefit to this market. Further north in south east Queensland there is increasing buyer enquiry. In Brisbane there are excellent buying opportunities and great value following a very challenging 2011. I don't anticipate a sudden rebound however, there are pockets of outstanding value for investors with a long term view. marketing@mcgrath.com.au (John McGrath) Tue, 31 Jan 2012 12:00:00 +1100 http://www.johnmcgrathblog.com.au/blog/2/80/ http://www.johnmcgrathblog.com.au/blog/2/80/ Article As we enter the New Year and the possibility of selling your home, upgrading or downsizing in one of the busiest selling periods - choosing the best agent to sell your property is the second most important decision in real estate (after choosing the right property to buy). But from my experience many people are too casual in their approach to this crucial decision. They ring a couple of agents and choose the one who gives them the highest valuation or has the lowest commission. Create a series of questions that you want to ask agents, and interview a few as if you're considering them for a job. 15 QUESTIONS TO ASK WHEN HIRING A REAL ESTATE AGENT · What do you think my property is worth? How have you come up with that figure? · How does my house present? What can I do to maximise the sale price? · What's the best method for selling my property? Auction or private treaty? Why? · What's an approximate time frame? · What's it going to cost me? · Why should I hire you? · How long have you been working in this area? · What comparable homes have you sold in this area lately? · What's the state of the market? · How long is it taking you to sell well priced listings at the moment? · What marketing strategy do you suggest? Why? · How much will be spent on marketing? Why? · How much traffic does your website get? · What will you do to introduce buyers to my property? · Do you have a list of recent vendors I can speak to? marketing@mcgrath.com.au (John McGrath) Mon, 16 Jan 2012 12:00:00 +1100 http://www.johnmcgrathblog.com.au/blog/2/79/ http://www.johnmcgrathblog.com.au/blog/2/79/ Article I'm feeling optimistic about the Australian property market in 2012. We're not in for any major growth in prices but there are positive signs ahead. Two interest rate cuts will always stimulate the more affordable end of the market - which is a positive thing for the bulk of the population living in and buying homes under $1.5M-$2M. Recent figures from Australia's largest mortgage broker, AFG, show a big boost in the number of home loans taken out in the month of November following the first rate cut on Melbourne Cup Day. New mortgages increased by 18.4% nationally (26.7% in VIC, 20.8% in QLD, 16.4% in NSW) compared to October, and while that is partly due to November always being a high volume month, I think the interest rate cut probably gave buyers already in the market an extra shot of confidence to go ahead and make that purchase. The November loans were worth $2.9 billion, the highest number recorded by AFG since March 2009. It's funny what a shift in confidence can do for the property market. Two rate cuts is a big shot in the arm for people who perhaps delayed buying in 2011 because they were fearful of cost of living pressures and major economic concerns overseas. We're seeing evidence that Australians are feeling much more conservative about debt and in terms of housing demand, the lower end of the market certainly had the lion's share of buyer interest in 2011. Two rate cuts will certainly bring new confidence to the market but I'd also like to see a resolution in Europe, as I think those debt issues and their potential impact on the rest of us are a major concern for property buyers, particularly in the prestige sector. Banking and finance executives aren't getting the bonuses they used to and this is having a direct effect on property above $3M. The share market is also very volatile, also due to Europe, so resolving this large scale economic issue is critical for property prices in Australia. As always, when conditions aren't great, there are amazing opportunities for those buyers brave enough to buy when others are holding back. One of my favourite quotes from Warren Buffett - 'Be fearful when others are greedy. Be greedy when others are fearful.' The Australian property market has an outstanding track record for long term capital growth. If you can get in at a time when a relatively large proportion of the market is holding back, you could do very well for yourself. As long as you do a careful budget with a buffer and buy with a view to holding the property ideally for 10 years or more, now is a fantastic time to buy. This is particularly the case for investors, with evolving superannuation laws making it easier to buy using a self-managed super fund and exceptional rental returns being achieved in both metro and regional areas. AFG says 2 in 5 new mortgages were for investors in November, which is the highest number recorded in six years since AFG began counting. Investors were most active in NSW (44.6% of all new loans), VIC (39.8%) and QLD (37.7%). The QLD stats are very encouraging as there are many depressed markets in the Sunshine State (especially the Gold Coast) offering unbelievable once-in-a-lifetime value for buyers. A new year always brings a new psyche to the market. We finished 2011 on a good note with two rate cuts so I'm optimistic about this year's Autumn selling season, which will formally get underway in early February. Watch the market from February to April as this is a traditionally busy period so you'll get a good sense of where the market is headed for 2012. marketing@mcgrath.com.au (John McGrath) Wed, 14 Dec 2011 12:00:00 +1100 http://www.johnmcgrathblog.com.au/blog/2/78/ http://www.johnmcgrathblog.com.au/blog/2/78/ Article We've noticed a marked improvement in buyer enthusiasm following the first interest rate cut but it won't be enough on its own to spark some serious growth. People are looking for more good news to regain their confidence to buy and sell. Interest rates are definitely an important factor in people's purchasing considerations, particularly in the sub $1.5 million market, but it's not the only one. There are other macro issues that are probably a greater influence on people's current psyche. The European problems are a big dark cloud and if they're resolved I think that will have a much greater positive impact on the actions of buyers than a quarter percent rate cut. While we continue to wait for more positive signals, green shoots of growth and new demand continue to emerge. The market under $1 million is strong due to first home buyer and investor activity and while there have been a few good sales at the top end, the prestige sector still lags. We need to see unemployment down, retail spending up, a resolution in Europe, improved bonuses and a good consistent quarter on the stock market for the prestige sector to move. I think we'll see people getting back on the horse in 2012, as buying opportunities above $3 million are exceptional. Australian buyers don't need to see a lot of price growth to regain confidence, they just want to know that home values have stabilised. A lot of people are sitting there with cash in the bank waiting for the signal that the market has leveled and now's the time to buy. The underlying demand is there, people are just waiting for the bell to ring and I think there's a good chance that will happen in the first half of 2012. Market Observations Attractive fixed rates are proving popular with three year deals as low as 5.94%. Australia's largest mortgage broker, AFG reports an increase in fixed loans from 7.9% in July to 17.2% in November. Many buyers are waiting for further evidence that interest rates are moving into a downward cycle so a second rate cut is needed to boost their confidence and prompt them into action. People are looking for some good news. Sentiment can turn quickly and behind the veneer of nervousness, there is a genuine desire to get into the market. A lot of people de-leveraged in the GFC and they are ready to buy again when their confidence is restored. RP Data figures suggest the window of opportunity to buy at the bottom is closing. Capital city home values recorded their best result in seven months in September, with falling prices slowing to only -0.2% seasonally-adjusted while regional houses rose 0.1%. First home buyer activity has surged and now comprise 16.4% of the market, up 27% on June this year and 40% on the same time last year. First home buyers stand to save almost $18,000 in stamp duty on a $500,000 purchase if they buy before Jan 1. With so many traditional asset classes appearing unstable at best or volatile at worst, bricks and mortar should prove to be a popular investment avenue, particularly with the significant baby boomer market. AFG says the percentage of new loans for investors hit a peak of 38.4% in November nationally (44.6% in NSW). There have been two big investment trends in 2011. The first is more people buying through self-managed super funds. The second is investment from the Chinese, who see Australia as a great investment market with a strong currency and business economy and excellent education opportunities. Traditionally, investors in Singapore and Hong Kong have always liked our market but interest from China has increased strongly since the GFC. There are exceptional buying opportunities in Australia's prestige sector above $3 million. In my experience, prestige home values can rise rapidly as soon as economic confidence returns. During the GFC recovery, prestige property prices jumped almost 20% in 2009 alone. In Sydney's Palm Beach, properties that used to be worth $3 million are now trading for $2.2 million, and it's a similar story in many other desired lifestyle locations. According to recent media reports, a record number of Australians aged over 55 are remaining in the workforce or actively looking for work following big super losses during the GFC. We've noticed less demand from retirees in coastal markets but this will inevitably pick up as the population continues to age. Canberra has been a powerhouse market for several years but is now taking a breather, with prices coming back 3-5% in recent months due to higher supply and caution among buyers. Great investment conditions remain with 5-6% yields and low vacancy rates. We're expecting a seasonal increase in activity at the start of the year as new government employees move in. Our new Woden office is noticing a preference for renovated homes over original properties. My Top Metro Suburbs Picks Houses Erskineville Redfern Rozelle Taren Point Vaucluse Apartments Bronte Little Bay Milsons point Ryde St Peters Regional Markets We're seeing increased buyer activity and general positivity in a number of regional markets as people begin picking the bottom and taking advantage of great buying. Renewed buyer confidence and vendors becoming more realistic after many months on the market is resulting in more sales. We're also seeing more Sydney investors and young sea/treechangers looking to buy in areas offering jobs and lifestyle. Out of area buyers are driving demand in lifestyle markets such as Byron Bay, Ballina, Bowral, Wollongong and the Blue Mountains. Our Blue Mountains and Bowral offices estimate 75%-85% of buyers respectively are from Sydney looking for investment, holiday homes and retirement properties. Sydney investors are increasingly looking at major regional markets offering lifestyle, improving infrastructure and jobs growth such as Newcastle/Hunter, Wollongong, Byron Bay and Port Macquarie. Rental demand, yields and capital growth prospects in these areas are excellent. The Gold Coast is showing new signs of life with vendors more realistic and buyer sentiment improving. However, it still has a long way to go in its recovery. The Commonwealth Games will be a shot in the arm for the economy with 30,000 new jobs anticipated. There is exceptional value available particularly with family homes in canal and riverside areas. A quality four bedroom home on the water is easy to find for less than $1.5 million. New villas/duplexes in Mermaid Beach and Miami are providing a rare opportunity to buy beachside for under $2.5 million. We're seeing new activity in the blue chip Byron Bay Shire and Hinterland market, one of the hardest hit during the GFC. Demand is increasing across all price points including the upper end. Prices are generally are 10-15% off at the lower end and 20-30% off at the top. Buyers are seeing great value with locals seeking to upgrade and Sydney buyers seeking holiday homes or investments. The holiday home market has been soft for many years but we're starting to see new interest from Sydney buyers in Byron Bay and Bowral. The Central Coast is another holiday home market ripe for the picking. In Terrigal, Avoca and Killcare - traditionally popular holiday home areas among Sydneysiders, the buying opportunities above $1 million are the best we've seen in 15 years, with twice the normal supply of houses and apartments now on offer. A proportion of young Sydney couples are continuing their sea/treechange to more affordable major regional markets that offer jobs (or easy commuter access to Sydney) and lifestyle. Markets popular with these buyers include Port Macquarie, Wollongong, Newcastle, Warners Bay and the Blue Mountains. My Top Regional Suburbs Picks - Best Buying Opportunities Ballina Burleigh Heads (Gold Coast) Charlestown Paradise Waters (Gold Coast) Wentworth Falls Burradoo Flynns Beach Lambton Mawson (ACT) St Huberts Island Key Points & Predictions Improvement in buyer enthusiasm following the first interest rate cut but it won't be enough to turn the market back to a positive situation in terms of some serious growth Macro issues such as the European debt crisis still weigh heavily on buyers' minds, as do rising cost of living pressures Market under $1M strong due to significantly higher first home buyer activity and a peak in investor activity.Buyers are taking advantage of very attractive three year fixed rates Exceptional buying opportunities above $3M but major economic changes are required for the prestige property sector to begin moving in a positive direction again There is new activity in many regional markets, with Sydney buyers a driving force. The affordability of property in lifestyle areas with strong local economies is attracting investors, young seachangers and a small number of holiday home buyers. There are fewer retirees in major coastal locations but buyer activity overall is strengthening Blue chip markets hit hard by the GFC including the Gold Coast and Byron Bay are showing definite signs of new activity across a broad range of price points. marketing@mcgrath.com.au (John McGrath) Wed, 16 Nov 2011 12:00:00 +1100 http://www.johnmcgrathblog.com.au/blog/4/77/ http://www.johnmcgrathblog.com.au/blog/4/77/ Video I chatted with Peter Switzer this week about the QLD property market. I hope you find it informative. Please note, the video is used with permission of Switzer Media + Publishing. marketing@mcgrath.com.au (John McGrath) Thu, 22 Sep 2011 12:00:00 +1100 http://www.johnmcgrathblog.com.au/blog/2/76/ http://www.johnmcgrathblog.com.au/blog/2/76/ Article I was recently interviewed on Grow Your Business - a site which provides news & information for Australian SMEs. I hope you find my interview informative. marketing@mcgrath.com.au (John McGrath) Wed, 21 Sep 2011 12:00:00 +1100 http://www.johnmcgrathblog.com.au/blog/4/75/ http://www.johnmcgrathblog.com.au/blog/4/75/ Video I had the opportunity to catch up with Peter Switzer recently on Sky Business Channel. Hope you enjoy the interview. Please note, the video is used with permission of Switzer Media + Publishing. marketing@mcgrath.com.au (John McGrath) Mon, 05 Sep 2011 12:00:00 +1100 http://www.johnmcgrathblog.com.au/blog/2/73/ http://www.johnmcgrathblog.com.au/blog/2/73/ Article Wise words from one of the world's most successful investors, Warren Buffett: 'Be fearful when others are greedy. Be greedy when others are fearful.' Recent economic events have caused a heightened level of uncertainty. This will prove problematic for property at the higher end over the next quarter, however I still believe most markets are at the beginning of a long term growth cycle. Property remains an excellent asset class for long term investment and definitely offers more stability than the volatile share market. Once confidence returns, Australia will be in good shape. Unemployment remains relatively low and rents are very strong. A key factor is interest rates. If the RBA moves to decrease rates further, this will supersede many macro economic issues for the average buyer. Buyers have been concerned about interest rates moving upwards and we really need to see a rate reduction that puts the steep rises of the past 18 months behind us. With three year fixed rates now below the variable, this indicates the banks' belief that interest rates are on the way down. As Buffett also says, 'If you wait for the robins, spring will be over.' In short, we are experiencing great buying opportunities. Take a long term view and purchase quality property in blue-ribbon areas or markets that show great prospects for capital growth. Market Observations New RP Data figures for the June quarter show a -0.9% seasonally adjusted decline in capital city property values nationally. However, most transactions in investor and upgrader markets have been sub $750,000 with fewer transactions at the premium end. Currently the market appears to be taking a breather. A pause in any growth cycle should always be considered a positive. Markets don't go up in straight lines, they always reflect growth punctuated by a pause or occasional corrections. Many consumers have de-leveraged by paying down their loans. Whilst not good for retail, they have more cash in the bank and their super funds. In some markets, people are deliberately downsizing to a more affordable home specifically to reduce the size of their mortgage. People are currently conscious of debt and are acting accordingly. Affordability is a key issue for buyers. With people less confident about taking on large amounts of debt, we are finding higher competition on the more affordable homes. Buyer demand, although weaker across the board, still outweighs the lessening supply. In the month ending July 30, RP Data reported 5,000 fewer new advertised listings nationally compared to July 2010. In NSW alone, there were 3,000 fewer listings. However, demand is solid, with Australia's largest mortgage broker AFG, reporting an 8.6% increase in home loans in July 2011 vs July 2010. Sydney and Melbourne clearance rates are in the low mid-50% and trending upwards. As a company, we are seeing our auction clearance rates shift towards 70% which is still a very healthy percentage in any market. Upgraders and investors are still active. An increasing number of young people are choosing to buy an investment property ahead of their first home. People still want to enter the market and if they can't afford it, they will stay at home longer, save for a bigger deposit, or buy with family or friends. Record high refinancing indicates buyers are taking advantage of better deals so they can upgrade or at least reduce the interest rates on existing properties. Three-year fixed interest rates are below the variable rate right now. As an example, ANZ is offering 6.44% for two and three years fixed vs 6.9% variable. The US debt downgrade by Standard & Poors will no doubt make people nervous, however property still presents as a stable investment. Strong rents are driving investor demand. Many more people are using self-managed super funds to buy property - latest Tax Office figures show a 13% increase in property investment via SMSFs over the past year. Vacancy rates are very tight with renters competing strongly in markets with little stock. Some renters are offering higher rents or advance payments. There were 9,000 less new advertised rentals in July 2011 vs July 2010 nationally, according to RP Data. In RP Data's June results, Canberra was the best performing capital city with property values up 0.5%. Prices are now beginning to stabilise after 3-4 years of sustained growth. Great fundamentals for investment remain with apartments under $1M still in high demand and gross yields around 6.5%. The Australian National University has announced 6,000 new places which will add further demand for apartment rentals. My Top Metro Suburb Picks Houses: Abbotsford Breakfast Point Frenchs Forest Freshwater Haberfield Northbridge Palm Beach Queenscliff Seaforth Sylvania Waters Apartments: Bronte Cremorne Point Dawes Point Earlwood Kensington Newtown North Parramatta Pyrmont Sans Souci Wollstonecraft Regional Markets There have been 'green shoots' in terms of property demand in most regional areas in which we operate. Some of the hardest hit markets such as Bowral, Ballina and the Gold Coast are receiving more new buyer enquiry than they have for several years - a good sign that smart buyers are picking the bottom. Buyers continue to look for value, however they are now starting to purchase when they see it. The backlog of buyers is starting to create activity in markets such as Bowral where demand has increased noticeably over the last quarter, where our office reports significant new interest from Sydney investors seeking long term capital growth. Newcastle has become a popular regional market as it undergoes a fundamental change from its working class heritage to a fast growth business community. Several high profile companies have moved in including Macquarie Bank and PriceWaterhouseCoopers. Locals are upgrading closer to beaches and there is high investor demand with new apartment developments selling quickly. Studio and 1 bedroom apartments are proving most popular, often to out of area buyers who want to take advantage of the healthy yields up to 6%. Young Sydney families are realising the lifestyle and better value for money in Newcastle, as a very appealing seachange. Another strengthening market is the Blue Mountains, where 70% of our buyers are coming from Sydney or outside the locality. The main buyers are downsizing empty-nesters and young couples from Sydney seeking excellent value with strong prospects for capital gains. My Top Regional Picks - Best Buying Opportunities: Balgownie Broadbeach Waters (Gold Coast) Burleigh Waters Caves Beach Ettalong Hamilton Katoomba Kingston (ACT) Lennox Head Town Beach Key Points & Predictions: Recent global economic events have caused a heightened level of uncertainty but most markets are at the beginning of a long term growth cycle. A reduction in interest rates will supersede many macro economic issues for the average buyer. Attractive deals on three year fixed rates will assist buyers with budgeting. People are very conscious about debt and are acting cautiously, demand is greatest for the most affordable properties sub -$750,000. Demand still outweighs supply and buyers are quick to act when they sense genuine value. Sydney and Melbourne clearance rates are in the low mid-50% and trending upwards. Rental demand still extremely strong, yields remain high and this is driving investor demand. Green shoots in terms of buyer demand in regional markets that have been soft for some time. Many buyers still sitting on the sidelines, great opportunities for upgraders and investors for long term capital growth. marketing@mcgrath.com.au (John McGrath) Tue, 30 Aug 2011 12:00:00 +1100 http://www.johnmcgrathblog.com.au/blog/2/72/ http://www.johnmcgrathblog.com.au/blog/2/72/ Article It's predicted that Western Sydney's population will more than double in the next 4 decades, as Sydney grows to 7 million by 2050. An expanding business district, major new public art gallery, rail network improvements and upgraded sporting facilities are just some of the infrastructure required to draw the pressure away from our existing CBD and towards positioning the city of Parramatta as Sydney's second CBD. And there's a real buzz around Parramatta at the moment and it's got everything to do with the number of cranes in the sky and a very proactive council that is loudly broadcasting a big picture future for the city. I'm seeing a lot of commercial activity here, which is an important indicator for employment and as a result, an increase in demand for housing. Parramatta's most significant development to date is the revitalisation of Civic Place. Civic Place is critical to the transformation of Parramatta as it prepares to accommodate over 40,000 new residents and 30,000 more workers in the next 20 years. It will not only provide new apartments and offices but make downtown a more cosmopolitan and exciting place to be. There's enough momentum already to interest many investors in high-rise residential developments in Parramatta for which there is strong rental demand. And there seems little chance that supply will outstrip demand any time soon. marketing@mcgrath.com.au (John McGrath) Fri, 10 Jun 2011 12:00:00 +1100 http://www.johnmcgrathblog.com.au/blog/4/70/ http://www.johnmcgrathblog.com.au/blog/4/70/ Video I chatted with Peter Switzer this week about the property market. I hope you find it informative. marketing@mcgrath.com.au (John McGrath) Wed, 01 Jun 2011 12:00:00 +1100 http://www.johnmcgrathblog.com.au/blog/2/68/ http://www.johnmcgrathblog.com.au/blog/2/68/ Article There's no need to panic. Every few years, these so called property experts come out of the woodwork to generate headlines about the Sydney and Australian property market being 40% over priced. I've been in real estate for almost 30 years now and have heard these suggestions on at least eight occasions (seems like once every cycle). To date, I have yet to experience a market that has fallen more than 20%, and invariably within nine months, any market losses have typically been regained. In the meantime, property values have kept doubling about every eight years. I also remember an instance several years ago, when one loud academic promoter of the 'Chicken Little' theory had our company sell their apartment because they believed and publicised the market was 40% over heated. So we sold it and we got them a good price. They were relieved as they had avoided the 'Armageddon' mania perpetuated by these so called experts in the news. Since then property values in that particular area have increased by 25%. It's not my intention to criticise people for having a view. I'm just encouraging you to look at our history, look at the present and try to foresee the future trends - after all, we are the Lucky Country, rich in everything from resources to political stability and we're also on the doorstep to the world's two largest populations. I personally believe there won't be a major property correction. In effect, I think there is a 95% chance we will see healthy prime residential markets around Australia over the next 12-18 months. marketing@mcgrath.com.au (John McGrath) Mon, 30 May 2011 12:00:00 +1100 http://www.johnmcgrathblog.com.au/blog/2/71/ http://www.johnmcgrathblog.com.au/blog/2/71/ Article Here's a recent article I did with NAB Magazine on how a lucrative property investment can outperform the market in capital growth. marketing@mcgrath.com.au (John McGrath) Wed, 25 May 2011 12:00:00 +1100 http://www.johnmcgrathblog.com.au/blog/2/62/ http://www.johnmcgrathblog.com.au/blog/2/62/ Article Over 14 years ago, I started what was then a small conference for real estate professionals to learn from the best visionaries and practitioners in the world. Today AREC has grown enormously and this past weekend, AREC 2011 was held in Sydney. On the first day, two of the most outstanding keynote speakers, radio personality Alan Jones and former Mayor of NYC, Rudy Giuliani, set the tone for the next two days. Alan Jones, one of the most prolific rugby coaches Australia has ever seen, shares his views on 'The Attitude of Champions'. He told our 2,000 delegates in attendance that 'real estate was safest form of investment for young people'. His message plainly laid out the need for us all to not take shortcuts in life and accept that on the way to success there will be adversity. 'Quality has a price to pay' he said, and these are 'hard work, disappointment and envy'. If we stop making excuses and turn our efforts to persistence, success will be born. Rudy Giuliani, is a world leader who I have admired for more than a decade. When he agreed to speak at AREC I was thrilled and listening to him on Sunday, he exceeded our expectations. Giuliani served as Mayor of New York City for eight years, during which time he transformed NY from the most dangerous city in the US to the safest. Then came September 11, which in his words 'challenged every bit of common sense and ingenuity, and showed us that you never know what you are going to face'. During his hour on stage, he shared his thoughts on leadership. Here's a snapshot of his six principles: Leadership: Strong beliefs - leaders must have a clear and consistent vision. Big Vision can bring about Big Change. Small Vision brings about NO change. Optimism: People follow hope and the person offering to solve the problem. Embrace problems and suggest a way to turn them around. Courage: If you are not afraid you are not alive! Preparation: Relentless Preparation is the key to success. Every answer you need can be found in preparation, so practice until you're bored. Teamwork: Ability to recognise your weaknesses and compensate to overcome them. Balance your strengths and weaknesses with people who have those strengths: trust and learn from them. Communication: Leadership is a teacher and motivator. Get into the hearts and minds of people, and work with your organisation towards shared goals. These amazing individuals have achieved the level of success the rest of us dream of, but their philosophy and advice is simple and I hope it will resonate with you. marketing@mcgrath.com.au (John McGrath) Thu, 07 Apr 2011 12:00:00 +1100 http://www.johnmcgrathblog.com.au/blog/4/61/ http://www.johnmcgrathblog.com.au/blog/4/61/ Video I had the opportunity to catch up with Peter Switzer recently on Sky Business Channel. Hope you enjoy the interview. marketing@mcgrath.com.au (John McGrath) Mon, 14 Mar 2011 12:00:00 +1100 http://www.johnmcgrathblog.com.au/blog/2/60/ http://www.johnmcgrathblog.com.au/blog/2/60/ Article There has been some reports recently that suggest if there are two houses on the market that are quite similar, except for their energy ratings, the house with the high energy efficiency will command a higher price. With more general awareness of environmental issues and the rising cost of energy and water, there definitely is an increased interest in this space. Up until now green homes have made most people feel good but have not truly translated to better prices. It seems to me that the change is happening as we speak. I believe the demand for homes that are energy efficient is growing and the awareness of both the importance of this ecologically as well as the cost benefits financially is rapidly growing. If architects and home builders start upgrading new homes to above the minimum authority requirements, showcasing the best technology and building design that creates energy efficiency as well as being environmentally friendly, the added investment will start to pay off going forward. This must translate into better prices due to stronger demand and value add for buyers. I'm not sure that you can put a dollar figure on it yet, but I'm sure you will be able to over the next 24 months as awareness continues to grow. marketing@mcgrath.com.au (John McGrath) Wed, 02 Mar 2011 12:00:00 +1100 http://www.johnmcgrathblog.com.au/blog/4/59/ http://www.johnmcgrathblog.com.au/blog/4/59/ Video I recently had the opportunity to chat with Peter Switzer on Sky Business Channel about the property market. I hope you enjoy watching it. marketing@mcgrath.com.au (John McGrath) Thu, 20 Jan 2011 12:00:00 +1100 http://www.johnmcgrathblog.com.au/blog/2/58/ http://www.johnmcgrathblog.com.au/blog/2/58/ Article It's the classic dinner party conversation between savvy investors - where are the bargains in real estate today? During the GFC, the Australian property market was ripe with opportunity for the few who had liquid funds. Here in Sydney, we heard many stories of wealthy investors buying up house after house in suburbs like Palm Beach, where prices dropped off substantially due to a mass holiday home sell-off. That's what a smart investor does - they look past the woes of today and take advantage of the silver lining. The affect of the GFC in capital city markets is basically behind us. We had a small correction followed by rapid growth as buyers sought value in the improving economy. In regional markets, it's a different story. Regional markets suffered more than urban markets during the GFC for three main reasons. Firstly, there was a major sell-off of holiday homes so supply began surpassing demand. Secondly, the major industry of regional markets - tourism, declined substantially and continues to struggle now due to the strong dollar making overseas travel very attractive. Thirdly, downsizers and retirees began delaying their seachange or treechange due to superannuation losses and a volatile economy. Today, our economy is doing much better and people are more confident. RP Data reports that property prices in capital city markets in financial year 2010 rose about 10.5 per cent on average but major regional markets were up only five per cent. I'm talking about major regional markets here - the strongest markets of all our coastal and country towns. These areas have a solid long-term history of strong growth so a five per cent increase is pretty low. And therein lies an opportunity for bargain buyers, but it won't last long - I'm tipping mid-2011. There are already signs of improvement in these major regional markets and that's exactly when you want to buy - on the cusp of an upswing. In NSW, some of our regional offices report a huge proportion of buyers from Sydney looking to purchase now for investment, a lifestyle change or retirement. Over the past few months, our Bowral office estimates 80 per cent of buyers have been from Sydney, in the Blue Mountains it's 60 per cent and in Port Macquarie it's 40 per cent (this also includes buyers from Melbourne and Brisbane). In terms of regional hot spots, I'm tipping the following locations as great buying now for future capital growth in NSW: Byron Bay, Warners Bay and Shelly Beach (North Coast); Towradgi (South Coast); Empire Bay (Central Coast); Wentworth Falls (Blue Mountains) and Burradoo (Southern Highlands). In QLD, I like the Gold Coast where there is incredible value particularly with waterfront houses along the deep canals. Generally, investors can't go too far wrong with beachside towns or regional suburbs with fast commuter access back to your capital city. Just don't buy in an area that is solely reliant on one industry, particularly tourism, to power its local economy. Any market linked to mining is definitely a good bet. In addition to prices, look at rental demand too. It's all very well to buy a bargain but if you can't find a tenant your investment will be seriously compromised. Start your research now and perhaps take a holiday in the regional market you like best for investment this month. Many agencies in major tourist towns are open during January for exactly this reason. Time is on your side and while recent sales can help you get to know a market you're unfamiliar with, you definitely need to spend time on the ground. Signs of a good regional market for investment include new infrastructure, a good local economy with a mix of major industries, busy shops and cafes, schools, clean beaches, recreational facilities and good public transport. marketing@mcgrath.com.au (John McGrath) Thu, 28 Oct 2010 12:00:00 +1100 http://www.johnmcgrathblog.com.au/blog/2/56/ http://www.johnmcgrathblog.com.au/blog/2/56/ Article I recently posted a blog about an upgrade in confidence in the real estate market. I'm starting to see a major increase in the number of new listings coming onto the market for sale this Spring in our biggest capital cities. Following strong results in September, temporarily stable interest rates and steady clearance rates in Sydney and Melbourne, the two biggest auction markets in the country, homeowners have got the extra shot of confidence they needed to pursue a pre-Christmas sale before the possible rate rises of 2011. And here's why buyer demand is strong. Firstly, interest rates have been steady for a few months so purchasers' buying power has stabilised and this has fuelled their motivation. Some of the banks have also loosened their purse strings and agreed to lend money to more property buyers. Secondly, supply and demand has been in the sellers' favour for a long period of time. When supply is low, it can take buyers many months to find their new home and this keeps demand high for sustained periods. Then there's the seasonal influence with November always a high volume month as people start appreciating the Christmas deadline and the convenience of moving house during the school holidays. Demand is strongest for family homes under $2m in the inner and middle rings of major capital cities like Sydney and Melbourne. These buyers are upgrading from smaller homes to accommodate growing families. Activity in the $2m-$4m range is fairly subdued but this will change as the share market strengthens. With fewer first homebuyers around and rents on the rise, investors are still active, particularly at the more affordable end of both the house and apartment markets. This weekend Sydney will host the Home Buyer & Property Investor Show and with confidence on the rise, now is a great time to be educating yourself on the real estate market either as a first home buyer, upgrader or investor. Top of their agenda this year is tackling the challenges of affordability in the Sydney residential market. I encourage you to check it out as there are many notable presenters providing factual and helpful information. marketing@mcgrath.com.au (John McGrath) Wed, 20 Oct 2010 12:00:00 +1100 http://www.johnmcgrathblog.com.au/blog/4/55/ http://www.johnmcgrathblog.com.au/blog/4/55/ Video I recently chatted with Peter Switzer on the Sky Business Channel about the property market. I hope you find this clip informative. For more information visit www.switzer.com.au. (Used with permission of Switzer Media + Publishing). marketing@mcgrath.com.au (John McGrath) Fri, 08 Oct 2010 12:00:00 +1100 http://www.johnmcgrathblog.com.au/blog/2/54/ http://www.johnmcgrathblog.com.au/blog/2/54/ Article Only two weeks ago (September 20) I wrote that the market was performing OK but somewhat nervous. Since then I'm feeling an upgrade in confidence that is now starting to extend beyond the Sydney metropolitan areas and into the regions. For example, our Wollongong office is delivering its best result since opening and has achieved significant sales in beachside development Manta, which had until recently been selling more slowly. Our Warners Bay office has just had two record sales including an almost $3m waterfront and most of our regional offices are recording significantly increased activity since the start of spring. It's hard to determine exactly what maybe driving this but I suspect there are a few things working in tandem: The Australian economy and population is starting to emerge from its cave. The light at the end of the tunnel is growing larger and brighter and the sense of new beginnings is apparent. Smart money is now starting to invest. Money that was in the bank is now buying quality assets at discounts and this is creating a surge of confidence. With the announcement of an Australian record sale at around $52m three weeks ago people are seeing the smartest money in the room being used for growth assets. Australia will undergo a severe housing shortage for several years to come. With little new building activity for several years now and a rapidly growing population, current demand far outweighs supply and this cannot be rebalanced over night. The mining boom is prevalent and we are seeing a huge overweight in top end homes being sold to people involved in the mining sector. So at both a macro and micro level, the current mining boom is assisting fuel the property recovery. Offshore buyers are seeking to secure Australian property. It means more than an asset to most. It represents a home, good education and political stability (most of the time anyway), a secure future, a hedge in the strong $AUD and so many more of the things we Australians have almost come to take for granted. Prices (in most areas) are still very cheap (check out the Gold Coast where some areas are down 30%-40% on 2007 values). As they say in the retail space 'never to be repeated prices'. I think most buyers will look back in 2015 and thank their lucky stars they bought good real estate in 2010. Prices are ready to move in 2012. When the confidence returns in these areas value will rebound and there will be the potential to see 10%-20% capital gains in the first year. The share market which is a big factor in homes in excess of $1m around the country is building towards 5000 on the ASX. This means that confidence is growing as is the balance sheet of most Australians. The talk of a double dip recession is quietening and the more prevalent opinion seems to be that is unlikely. The bears are still there in the background but the bulls are drowning them out of late. Stay tuned. This will not be a straight line recovery. There will be days the news is positive and days the bears will win. Overall the trend is upward and that means property will grow in 2011.