In our Purchase or Pass segment this week Chris Gray is joined by Tom Panos, head of real estate advertising at News Ltd, to check out a potential investment property in North Bondi. It’s a two-bedroom, one-bathroom, unit with lock up garage, 8.6 kilometres from the CBD and 600 metres to the local action. It’s in a blond brick block of just nine units and has a leafy outlook across the district. The unit is in reasonable condition but certainly not shiny and new. There are windows on three sides and there are balconies off both bedrooms and the lounge.
The property rents for $700 per week and sold for $732,000.
With clearance rates around 50% many people would have good reason to assume the property market is in a pretty tough place. But inside that property market are many micro markets, and they are all doing something different. In our Purchase or Pass segment this week we take a look at a property that sold for over $50,000 above the vendors' expectations and after just one open for inspection.
Chris: What are your general thoughts on this property as an investment?
Tom: I like it. We see good properties that sell well, this is a good classic example. Some say that the buyer may pay a premium for a property like that, but I think that good properties always get good prices.
Chris: We have talked about the vendors' expectations, wanting $675,000 and it sold for $732,000. When you get vendors expectations, are they usually high or low?
Tom: Every vendor across Australia, across the planet, thinks they have the best house in the street.
Chris: So what is it about a property that makes it stand out and sell in a week?
Tom: Location is a big thing, no question about it. If someone has the right spot, it will attract a lot of people. If it is a well-renovated property or is it a dump and they can see it being totally renovated. It is the ones that are in between which are often take or leave. It is either beautiful renovations suited to the general population or dumps and deceased estates which fly through the open for inspections.
Chris: Reading into the detail of the ads, saying there are windows on three sides, it's going to be pretty sunny.
Tom: Absolutely, sun is a big thing. It is a questioned asked to agents all the time. They usually turn all the lights on before the inspection anyway!
Chris: Also, it’s a small block, people want to live in massive townhouses, people want to live near the beaches and the city. It's location, isn’t it?
Tom: Location and small community where you get to know the people is a big thing, less changing people all the time.
Chris: So if it was you, purchase or pass?
Tom: I would buy it, but I would buy most things.
Chris: We always say that good properties always sell well and this is a classic example. Some may say the buyer paid a premium for this property given the vendors; expectations, but if there were plenty of buyers that were offering similar amounts of money then that’s the market price. I would much rather pay a few dollars more for a property that has the potential to sell in a matter of days than get a property for a bargain that no one really wants and might take a year to sell. So for that reason I’m going to purchase.
Chris Gray is a buyers' agent at Empire. He is host of Your Property Empire on Fridays on the Sky News Business Channel.