Aussie borrowers are emerging as winners, focusing on opportunity rather than risk: Michael Matusik

By Michael Matusik
Monday, 18 June 2012

We do not purport ourselves to be economists, but Craig James of CommSec is – and a good one at that – and a few weeks ago he put out an alert to the effect that Aussie government bond yields are at 64-year lows.

Good thing? Bad thing?

It’s a good thing – a giant tick for our economy – and it means that Australian government debt is in demand, along with securities in the US and Germany, as investors seek “safe-haven” assets.

The lower yields will reduce borrowing costs for our government and therefore assist in reducing the budget deficit and public debt; and they will also serve to keep borrowing costs down for companies and home buyers. Aussie borrowers will benefit but will need to examine their options to disperse debt between variable and fixed rates.

The jitters surrounding Europe may be taking their toll on equities markets, but under this scenario, Aussie borrowers are emerging as winners with a chance to focus on opportunities rather than risks.

Residential real estate benchmarking

My thanks to John Rigby, director of sellAbusiness for sending through an excellent summary from Macquarie’s 2012 Benchmarking Report.

Here are his top 10 points from the report:

Rent rolls now account for 42% of total revenue, against 36% in 2009
The average rent roll size has increased from 375 properties in 2009 to 436 properties in 2012
22% of all offices did not make a profit in the financial year. 58% made above 10%, with just 10% of offices making more than 30%
In the last 12 months, the average office completed 106 sales on an average commission of 2.6%
The average days on the market are: SA 100; WA 95; Qld 79; NSW 65; Vic 58
% of properties listed via auction: Vic 32%; NSW 26%; Qld 11%
Rent roll portfolio sizes: NSW metro 486, regional 267; Vic metro 661, regional 363; Qld Metro 423, Regional 383
The national average property management commission rate moved up substantially to 7.6%
Perceived value of rent rolls as a multiple of management commission: National 2.9x, NSW 3.1x, Vic 2.9x, Qld 2.6x, WA 2.7x, SA 2.5x
% of advertising costs paid by vendors: National 72%; NSW 63%; Vic 85%; Qld 73%: WA 64%; SA 94% (but SA had the worst percentage for getting VPA upfront)

And if you followed us on Twitter then you would know all this already.

How to sell your message

Steve Jobs was a great salesman. The co-founder of Apple was able to “sell” the benefits of Apple products in his presentations like no other. Courtesy of The Week, here are a few lessons from Jobs on how to create a great presentation:

Establish one critical point and make it clear. (We humans can only absorb so much in one session). Any differentiation from the main point is merely a distraction.

Make a fast connection – an “emotional” impact that builds “empathy” so the audience is more receptive to the message.

Know why the audience is keen to listen. Adjust the style to suit the room.

Keep the audience focused on the speaker, not the presentation. Use a blank slide to force all eyes on you.

Know your story.

Now that doesn’t seem hard, does it?

Matusik Pulse poll

Last week’s Matusik Pulse poll asked where you would buy a $380,000 investment property in Brisbane that showed a $400 per week rental return.

A third of our would-be investors chose a two-bedroom apartment at Chermside (10 kilometres from Brisbane CBD) with a car; and a close 30% would pick a one-bedroom apartment at Albion (five kilometres from the CBD) with a car.

Some 16% would choose a four-bedroom house on 500 square metres of land at North Lakes, with two cars (25 kilometres from the CBD), while 14% would buy a three-bedroom townhouse at Carseldine, with a car (15 kilometres from the CBD).

Only 7% would consider a CBD one-bedder with no car.

This week’s poll question asks what you think will influence the market the most over the next 12 months. We’d love to know your thoughts.

Michael Matusik is the director of independent property advisory Matusik Property Insights. Michael is a 25-year veteran in the industry and his firm has helped over 550 new residential developments come to fruition. Michael has launched a new initiative, called Think Matusik. Think Matusik brings together expert opinion and select property opportunities.