Australian residential property prices forecast to rise up to 6 percent in 2010

As prospective home buyers look for the best time to jump into the market, many of the nation's top housing analysts have forecast modest residential price growth of about five or six per cent in 2010.

Some of Australia's leading economists believe demand for homes will stay strong as investors and upgraders pick up the slack from first home buyers.

But a small group of doomsayers is convinced a combination of rising interest rates, the winding up of the first home owners grant boost and over-inflated prices could lay the foundations for a crash.

Happily, the nation is emerging from the global financial crisis with strong population growth, the lowest interest rates in decades and a rosier jobs outlook.

Most economists, industry heads and real estate agents see the sun continuing to shine on residential property next year.

BIS Shrapnel senior project manager of residential property Angie Zigomanis predicts steady growth of about five to six percent in established residential property next year.

"I'd expect you'd see steady low-to-mid single digit growth next year," Mr Zigomanis told AAP.

"Over the next two or three years I think you'll find interest rates will keep slowly edging upwards and it'll keep a lid on the massive double digit price growth we were seeing previously."

Annual established house prices in Australia grew 6.2 per cent to September 2009, the latest Australian Bureau of Statistics data show.

"If you look at most markets, prices declined last year and while people are talking about booms and everything else, most of what it did was really put prices back to where they were 12 to 18 months ago," Mr Zigomanis said.

First home buyers would not be excluded from the market until the Reserve Bank of Australia (RBA) raised interest rates by another one or two per cent, he said.

Investor demand and upgrader's demand picked up in the last few months of 2009 and would continue well into next year.

As city rents increased due to low vacancy rates, more first home buyers in the 25 to 35 year age group would be encouraged into the market.

Housing Industry Association chief economist Harley Dale said Australia would experience significant 20 to 25 per cent growth in new housing stock through to mid 2011.

He also supports predictions of about five to six per cent growth in established homes next year.

"With prices, we'll probably continue to get a little bit more growth over the next six to 12 months but probably not at the rate that we've seen over the last six months which has been driven a lot by the first home-owner base," he said.

Mum and dad investors, who tended to look at the same type of investment housing stock as first home buyers, were beginning to step in to fill the gap.



A shortage of housing, low interest rates and the first home buyer's grant had helped support prices, he said.

But University of Western Sydney Associate Professor of economics and finance Steve Keen said the rates and grants combination had already helped cause a housing boom in 2009.

"The fact that rates are rising as we enter 2010, combined with the ending of the boost and the winding back of government stimulus packages, means that rising interest rates are likely to end the (housing) bubble that began in 2009," Mr Keen said.

The implications would be "substantially negative" for all properties, not just those valued under $500,000.

"I'd expect a five per cent or so fall (in residential house prices), probably returning to somewhere between the current peak and the previous one in September 2008."

Meanwhile Commonwealth Bank economist James McIntyre cites wages growth as a key part of the equation, while predicting significant skills shortages emerging within 12 to 18 months.

He said house prices would grow in the "mid single digits" next year, but those increases depended on how the build up of wages translated to other sectors of the economy.

"If the whole economy catches fire with a strong growth in wages, then that will really be supportive of a continued strong growth in house prices."

He dismissed suggestions the Reserve Bank of Australia (RBA) had waited too long to increase interest rates and said there was a very low chance of house prices falling.

It would take a "significant global shock" and an unprecedented surge in building approvals of between 200,000 and 250,000 homes to see significant weakness in house prices, he said.

Ray White Real Estate chairman Brian White believes Australia has avoided a dramatic downturn in house prices.

"All of us seem to have forgotten the anguish of the first four or five months of the year and we're trying to understand just how on earth the year finished so strongly," Mr White, who heads the nation's largest group of real estate agencies, said.

He also forecast growth of about five per cent in 2010 and said it had become a vendor's market.

"Now we're going into the new year with a number of interest rate increases occurring but with quite strong growth."

If you are looking for a well performing residential or commercial investment property, an addition to your existing property portfolio or a home to live in, we guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ or call the team on +61 (0)8 84631997

Australian housing supply and demand simplified

There was some very interesting commentary this week on the state of the property market. Firstly, Ric Battellino the Deputy Governer of the Reserve Bank gave a speech on myriad of issues including dwelling supply at the national Housing Supply Conference in Melbourne this week.

His comments were in line with the overwhelming consensus that Australia hasn’t built enough dwellings. However, Ric’s analysis suggests that this is not due to a cutback in dwelling investment, dwelling investment continues to increase. He gives four reasons:

First, Australians are on average spending a lot more on each new dwelling. Real expenditure on each new dwelling built is now 60 per cent higher than it was around 15 years ago.
Clearly we can all agree to this, the cost of residential dwellings has increased over the last 15 years, as has the cost of virtually everything.

Second, a high proportion of dwelling investment is in the form of alterations and additions – i.e. upgrading existing houses rather than building new ones. Almost half of all dwelling investment has been accounted for by alterations and additions in recent years.
So, residents are choosing to renovate and extend rather than invest in new dwellings. I think most people can agree with this. Why give up the house you have to move to the outskirts of the city where public amenity is poor and the cost of constructing a new property is significant. Why not just alter your current property?

Third, a higher proportion of the new houses built are simply replacing existing houses that have been demolished. The RBA estimate that between 2001 and 2006, around 15 per cent of new houses built replaced houses that had been demolished; 10–15 years earlier, that figure was less than 10 per cent.
This comment suggests that only 85 per cent of new dwelling commencements actually add to supply, the other 15 per cent is simply there to replace those properties which have been demolished.


Fourth, a significant proportion of dwelling investment appears to have gone into holiday homes or second homes. Census data show that the number of dwellings built has exceeded the increase in the number of households by a large margin. As a result, the ratio of the number of dwellings to the number of households has been rising over time; as at 2006, there were 8 per cent more dwellings in Australia than there were households. Presumably, most of this surplus reflects holiday houses and second houses.
With economic prosperity comes demand for second homes and holiday homes. It can therefore also be assumed that 8 per cent of new dwelling additions are going to be ‘consumed’ for want of a better word by those who already have somewhere to live. This leaves us in an interesting position, only around 77 percent of dwelling commencements in this country are actually catering to population growth, no wonder we can’t build enough stock.

Speaking at the same conference as the Deputy Governor was the National Housing Supply Council chairman Dr. Owen Donald. He raised significant concerns about the impact that land supply, finance, planning reforms and local governments will have on the supply of new homes. He stated that the country would fall short of providing the 153,000 dwellings required each year until 2028.

He also raised concerns about local area activism which was constricting supply, particularly in inner city areas which were ripe for infill development. These groups are commonly referred to as NIMBY’s the Not In My Back Yard crusaders.

Undoubtedly this is a tough situation to manage, in order to cater for additional demand higher densities and in particularly higher densities in inner city areas are important. However, inner city areas are where land costs are greatest, where people have forked out a greater amount of their hard earned cash to live and where there is a greater supply of our character homes. What makes Australia unique is that you can still buy a house just minutes from a major city. Around the world most cities have gone the other way and your only option for housing close to the city is a unit.

The results of the recently released Housing Mobility and Conditions Survey show that the second greatest reason for people moving house (after buying their own property) is because they wanted a bigger or better home. The survey also found that a common theme throughout the study was that when people were dissatisfied with their property, size and in particular not enough size, was a commonly recurring theme.

It would appear that Australian’s still long for the large block of land with the large houses yet we continue to push for inner city densification. There is undoubtedly demand for this type of development and it is certainly appealing when you’re young and single but speaking from experience, I think many reach a point in their life where they want a property of their own. One which they don’t share with a variety of common owners and in my opinion, many want the freedom to do what they choose and not to be governed by Body Corporate by-laws. This being the reason why you see such a high proportion of single person and couple household within inner city suburbs which are dominated by units.

If you are looking for a well performing residential or commercial investment property, an addition to your existing property portfolio or a home to live in, we guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ or call the team on +61 (0)8 84631997

Investors step back into Adelaide real estate markets in November 2009

A recent report from QBE Lenders Mortgage Insurance projects double-digit growth in median house prices for all capital cities until June 2012, including growth of 23% in Adelaide.

While first home buyers are often heralded for spurring this kind of growth during the "up" phase of a property cycle, their role may not be as significant as many people think.

Yes, first home buyers tend to enter the market in greater numbers when interest rates are low and affordability is higher.

However, these buyers account for less than 10% of all purchasers, so they don't have the critical mass required to influence price growth significantly.

In addition, first home buyers generally buy to a price ceiling and are extremely price-sensitive.

They don't have as much equity as returning home buyers, so they are often forced to borrow a sizeable percentage of the purchase price and live on a tight budget.

When rates begin to rise again, as they are doing now, many first home buyers become concerned that they won't be able to meet mortgage repayments, and the burst of activity begins to peter out.

First home buyers usually purchase at the lower end of the market, so even when the value of their property rises substantially, it doesn't contribute much to overall median price movements.

If a first home buyer purchases a $300,000 house, and the property's value increases by 7 per cent a year, it will be worth $21,000 more after one year — barely nudging the wider median price.

By contrast, investors are more consistent participants in the property market, because their cash flow is boosted by rental income and negative-gearing tax breaks.



They also account for a higher proportion of buyers at any given time; about 30 percent.

Additionally, they tend to buy around the middle of the market, so their properties exert a stronger influence on median values.

If an investor purchases a $500,000 property that grows at 7 per cent a year, the asset will be worth an extra $35,000 after one year.

Multiply that kind of increase across the investor market, and you'll see where a major driver of median price growth really lies.

The other major contributors to median price growth are returning home buyers seeking to upgrade or downsize.

They're a bigger proportion of the market than first home buyers or investors — about 60 per cent.

They also have plenty of equity from their previous home, and tend to buy at the middle to upper levels of the market.

If a returning home buyer purchases a property for $800,000, and that property grows at 7 per cent a year, it will be worth $56,000 more after one year.

That's almost three times as much price growth, in dollar terms, as their first home buying counterparts can achieve from an entry level, $300,000 property.

In short, returning home buyers influence median price growth far more than newcomers because they're a bigger mass with more buying power.

Right now, first home buyers are increasingly sensitive to the property markets because rising interest rates and prevailing lending practices will hamper affordability.

At the same time, investors are on their way into the market, buoyed by the knowledge that rising rates signal a stabilising economy.

Investors will compete in the market until rates rise to unsustainable levels, while first home buyers will lie low.

Returning home buyers are more risk-averse than investors, so they'll wait until they feel certain that the economy has recovered.

The property market will peak when investors and returning home buyers are active at the same time.

I expect investors will come back to the market first, followed by returning home buyers about 12 months later.

This activity will drive competition — and in all likelihood push median price growth to the levels predicted by QBE LMI.

In summary:


- First home buyers have a sporadic market presence.

- Investors and returning home buyers will drive the lion's share of growth.


If you are looking for a well performing residential or commercial investment property, an addition to your existing property portfolio or a home to live in, we guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ or call the team on +61 (0)8 84631997

New Super-town North of Adelaide: What does this mean?

Written by Chris Nicolas

Urban sprawl is taking effect on Adelaide, as the urban boundary expands to the Gawler region, the once regional town will be transformed into a metropolitan super-town called Concordia with more than 18,000 homes and 46,000 people. The developed land will be 2,500ha of farm land that will be transformed over 40-years subject to state planning approval with the unprecedented project possibly commencing in 2011 and the first-stage released in 2012. The externalities that this will have on the Adelaide property market are going to be quite complex impacting supply, land price, housing affordability, building costs, infrastructure, and property prices just to name a few. The relaxation of development controls as the land is rezoned causes massive opportunities and threats.
The intrusive urban-transformation is in close proximity to the iconic Barossa Valley, which may devalue from the tourist hot-spot taking away from the pleasant scenery. However, this is great news for housing affordability as the new supply will help make-up the short-fall that Adelaide is experiencing.

The proposed features of the new town are:

- 2 x Train stations linked to Gawler rail line (Funded by developer);
- New roads linking to Barossa Valley Hwy, Sturt Hwy & New Northern Expressway;
- 5 x Primary Schools, 2 x High Schools, 1 x Tertiary Institution;
- Offices and Shops to create approximately 6,500 jobs;
- Waste-water treatment plant to supply for irrigation.

Click Here to see the NEW Northern Expressway

Another externality could be on the cost and availability of resources during the building stages; considering the amount of resources that will be attracted to this area throughout the project. It will be plausible to expect building costs (e.g. labour and materials) to increase in South Australia from 2011 as the project demand for resources pushes up price.

These are only a few of the ripple effect of one of many planned projects happening in South Australia in the foreseeable future. It is important to be able to analyse these impacts when buying property in South Australia (or in any market) in order to capitalize and maximise your return on investment. If you are thinking about investing in Adelaide then get educated and invest smart through the professionals at Direct Negotiations.

If you are looking for a well performing residential or commercial investment property, an addition to your existing property portfolio or a home to live in, we guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ or call the team on +61 (0)8 84631997

Australian property: ripe for international investors.

Written by Chris Nicolas
16th October 2009
The international property market in recent years has been unstable, vulnerable to weakening economies and irresponsible banking systems. Since the Global Financial Crisis (GFC) many developed economies have fallen victim heading into recession with property prices crashing. Australia has defied the odds being the amongst the few developed countries to experience genuine economic growth through this turbulent period.
The Australian property market is well positioned to overide the full impact of the GFC and avoid the path that the US and other formerly competetive property markets have recently experienced. Unlike the US, Australia is experiencing an undersupply of property, the financial system does not have non-recourse loans and has stricter credit policies, unemployment rate has recently decreased from 5.8% to 5.7%,(as opposed to the official predicted 8.5%) and the Australian dollar is on its way up.
With the federal government’s stimulus grant for first-home buyers coming to an end on 31 December 2009 and interest rates set to re-calibrate as a result of a speedy and evidently strong economic recovery, many potential first—home buyers are likely to change their preference back towards renting. This is great news for property investors; with demand easing, prices may become more negotiable, coupled with increasing rent and investment returns.



A recent report by mortgage insurer QBE LMI, which was researched by BIS Shrapnel, has provided a housing outlook for 2010-2012 in Australia. The result suggests that overall, Australian capital city property is set to grow between 12-23% from June 2009 to June 2012 with Adelaide predicted to outperform the nation with 23% growth.
Now is a great time to buy property in Adelaide with unprecedented government investment in infrastructure creating thousands of jobs and having a massive impact on the future property values in regenerated areas.

If you are looking for a well performing residential or commercial investment property, an addition to your existing property portfolio or a home to live in, we guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ or call the team on +61 (0)8 84631997

South Australia fifth ranked fifth among international mining jurisdictions in ResourceStocks’ 2009 World Risk Survey.

South Australia has continued to excell in mineral exploration spending.

Minister for Mineral Resources Development Paul Holloway says the latest statistics show the State steps into the 4th quarter, with total spending on mineral exploration rising to $41.8 million for the June quarter, up from $36 million during the previous three-month period – a rise of 16.1 per cent.

Combined minerals and petroleum expenditure for the 2008-09 financial year was $332.9 million.

The figures are reflected in South Australia’s fifth ranking among international mining jurisdictions in ResourceStocks’ 2009 World Risk Survey.

“The turnaround in resource exploration expenditure reflects improvement in global commodity prices and South Australia’s determination to continue to increase our State’s economic prosperity through the minerals and energy sectors,” Mr Holloway says.

“Unlike other states, South Australia has not experienced any mine closures as a result of the global financial crisis. During the next 12 months, a further four to five mines are expected to be approved in South Australia, building on the 11 mines currently operating in this State.”

Property prices across Australia are expected to grow significantly over the next three years, as upgraders and investors compete for stock in the same, already undersupplied, property market.



Low interest rates and a shortage of affordable housing, coupled with growth in rental rates, will continue to drive up house prices - despite the threat of higher borrowing costs, according to the QBE Lenders' Mortgage Insurance (QBE LMI) Housing Outlook 2010-2012.

Adelaide, where property is the most affordable, is expected to see the strongest price gains, clocking a 23 percent rise over the next three years.

Ian Graham, chief executive of QBE LMI said the outlook was particularly good for first home buyers who have recently joined the housing ladder, and South Australia's favourable environment will attract greater numbers of solid investors to the market.

"The surge in first home buyer demand is now slowly permeating through to greater demand from upgraders who are trading over to their next dwelling after selling to the buoyant first home buyer market," he said.

"The strong rental environment and stabilisation of prices is also continuing to attract investors into the market."


If you are looking for a well performing residential or commercial investment property, an addition to your existing property portfolio or a home to live in, we guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ or call the team on +61 (0)8 84631997

Auction Review - 36 Jervois Ave. Magill, Adelaide

SOLD $451,000
3rd October 2009 at 1pm on site
Written by Chris Nicolas
About the Property:
The property is a two bedroom, 1 bathroom original sandstone fronted 1950 Art Deco home. The property is currently leased until 26th November 2009 for $260 per week. The approximately 676sqm allotment appeared to have a slight gradient from the backyard down to the front. Considering the council’s development plan criteria, the zoning requirements stipulate a minimum of 350sqm per allotment. A development of two semi-detached dwellings on this site may be difficult with a non-complying application likely to be necessary. For the successful purchaser it would most likely be desirable to extend and renovate the existing structure rather than redevelop.
Commentary:
The highly skilled auctioneer Phil Harris of Toop & Toop proceeded with the auction at 1pm in reasonably good weather. Many neighbours turned out to watch the event in interest as the bidding started at $390,000. With only three serious bidders, it was evident that the market consisted of young couples and families from different backgrounds.



The bids increased in $10,000 increments until bidding stalled at $440,000, when Phil started to accept bids in $5,000 increments. For one family the bidding exceeded their cut-off point early and at $450,000 the auction was coming to a conclusion with all the bidders at their limits. Phil attempted to squeeze every dollar out of the final two competing parties by calling for additional $500 bids to buy the property. This did not last long and the “fall of the hammer” found a young couple to be the new successful purchasers of 36 Jervois Avenue Magill for $451,000.

If you are looking for a well performing residential or commercial investment property, an addition to your existing property portfolio or a home to live in, we guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ or call the team on +61 (0)8 84631997

Australian property shows 8% growth in 2009

National property values jumped by almost 2 per cent in August in the largest monthly movement since the RP Data-Rismark Home Value Indices began in January 2005.

Using the rpdata.com (ASX: RPX) property database, which is Australia’s largest and includes over 170,000 sales during the first eight months of 2009, Australia’s housing recovery solidified during the month of August with strong capital gains registered across the country despite evidence of slightly decreasing first home buyer numbers.

Home values in Australia rose by an exceptional 1.9 per cent during the month of August. This brings cumulative capital growth in the first eight months of 2009 to a better than expected 7.9 per cent. According to rpdata.com research director, Tim Lawless, the August results surprised on the upside and are indicative of very high levels of buyer confidence combined with low levels of property available on the market.

“These buoyant conditions sit in striking contrast to the same time last year when values were falling in some states, less than half of the auctions held cleared and sales volumes were at rock bottom. We are now seeing home values rising at a solid rate, almost 80 per cent of auctions are clearing, and sales volumes have bounced back significantly”, Mr Lawless said.


Rismark International managing director, Christopher Joye, added, “Australia’s housing market is being underpinned by the strongest population growth since 1971, record housing shortages, historically low mortgage rates, better than expected employment outcomes, and one of the world’s most profitable banking systems.”

Australian home values have now risen 3.8 per cent past their February 2008 peak. This rebound followed peak-to-trough falls in national home values of just 3.8 per cent in 2008, which compares exceptionally well with the 15 per cent and 30 per cent house price declines seen in the UK and US, respectively.

Dispelling concerns that the recovery is limited to first home buyers Mr Joye commented, “In contrast to claims that this is a first time buyer bubble, the cheapest 20 per cent of suburbs in Australia have actually underperformed both the mid-priced market and Australia’s 20 per cent most expensive suburbs since the housing market bottomed in December 2008.”

“As recently noted by the RBA, all major lenders now require a minimum 10 per cent deposit and are applying the strictest credit standards we’ve seen in over a decade. Australian housing credit growth has also been running at levels that are extremely low by historical standards and noticeably less than the growth experienced in the 1991 recession,” Mr Joye said.

Rpdata.com’s Tim Lawless concurred with Mr Joye and said that over the last three months the premium residential market increased in value by 4.5 per cent compared with a 3.4 per cent gain in the middle market and a 2.8 per cent improvement at the cheapest end.
“Despite the strong gains, the bounce in the premium sector has not been enough to offset the peak to trough fall of 9.9 per cent between February 2008 and January 2009.Prices in Australia’s most expensive markets are still 1.1 per cent lower than at their peak.”

Mr Joye added, “While the resounding recovery in Australia’s housing market confirms our forecasts, we expect medium term growth rates to be more measured as mortgage rates normalise back to between 7-8 per cent. This would bring the cost of housing finance back in line with its 2000-01 levels, which is notably well below the searing 9.6% highs endured by borrowers in August 2008 care of the RBA.”

In closing Tim Lawless said that the upward momentum in Australian house prices is a critical economic signal from the market to builders and developers to encourage them to reinvest in producing new housing supply. This was a message reinforced by the RBA’s Dr Anthony Richards in a speech to CEDA yesterday: policymakers need to facilitate significant new investment in housing supply to alleviate Australia’s growing housing shortage, which ANZ and Westpac estimate has risen to around 200,000 homes.


“This price growth will also go a long way to comforting risk-averse lenders to start providing credit again to developers, which has been one of the main bottlenecks on the supply-side. And it will stimulate the reallocation of resources away from other sectors of the economy into much-needed housing investment.” Mr Lawless said.

Other key findings from the August RP Data-Rismark Index results:

Unit values (+2.1 per cent) have marginally outperformed house values (+1.8 per cent) in the month of August. Over the course of 2009, units (+8.5 per cent) have also generated slightly higher capital growth than houses (+7.7 per cent).

Most capital cities recorded robust gains in the month of August with every single city experiencing rises in home values during the first eight months of 2009.

After several years of subdued growth following the end of Australia’s last housing boom in 2003, which saw Australia’s “house price-to-income ratio” fall by nearly 20 per cent through to December 2008, home values in the two major capital cities, Melbourne and Sydney, have led the recovery in 2009 with total capital gains of 11.6 per cent and 8.6 per cent, respectively.

Following Melbourne, Darwin has been the next best performing capital city with growth of 9.7 per cent in 2009. Interestingly, Darwin also continues to deliver the highest rental yields, implying that the market may have room for further growth.

Home values in Canberra (+6.7 per cent), Brisbane (+5.2 per cent), Perth (+4.1 per cent) and Adelaide (+3.1 per cent) have also realised sustained gains in 2009.

As RP Data-Rismark correctly anticipated, residential real estate in Perth has experienced a recovery in 2009 after a period of falling prices since September 2007. While Perth dwellings have recorded 4.1 per cent growth in the first eight months of the year they still remain 3.6 per cent below their September 2007 peak.

National rental yields have softened slightly given the strong capital growth with the gross annualised rental yield for units being 5.1 per cent while house rental yields are slightly lower at 4.3 per cent.

If you are looking for a well performing residential or commercial investment property, an addition to your existing property portfolio or a home to live in, we guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ or call the team on +61 (0)8 84631997

FIRST- HOME BUYER’S BOOST TO BE PHASED OUT.

From 1 October 2009 the First Home Owners Boost payment, as part of the Federal Government Stimulus Package will be cut in half.
During 1 October – 31 December 2009 an eligible applicant who signs a contract to purchase an existing home will receive an extra $3,500, as opposed to the $7,000 previously. While signing a contract to purchase or construct a new home during the same period will provide an additional $7,000, instead of the $14,000 offered before the 1 October 2009. After 31 December 2009 the Boost payment will cease and only the standard First-Home Owner’s Grant will apply.
Consequently, there is likely to be a ‘Rush’ of first-home buyers entering the market to capitalize on the additional funds before the Boost expires at end of the year. It is likely that during this period there will be hyper-inflated prices in some entry-level properties as increased demand and limited stock availability pushes up prices. Therefore, buyers need to be very cautious of the true value of properties targeted at first-home buyers during this period.


Auctions, especially are going to be difficult to gauge during this time of high emotions with the effective application of real estate marketing methods by experienced sales agents and auctioneers playing on the under researched and/or vulnerable. The best advice is to become market-educated, understand your target areas and the true value of properties without the hype. It is always recommended to get professional advice on building and pest inspections to ensure a sound structure and independent advice from a property professional. If you think you may be eligible for the First-Home Owner’s Grant and wish to capitalize on the Boost then please contact a team member at Direct Negotiations for a free, no-obligation discussion on your options.
Written by Chris Nicolas at Direct Negotiations



If you are looking for a well performing residential or commercial investment property, an addition to your existing property portfolio or a home to live in, we guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ or call the team on +61 (0)8 84631997

Le Fevre Peninsula in high demand.

With so many choices for investment, identifying quality investment property locations can be a challenging job for current investors. Project marketers and seminar spruikers push suburbs where they have teamed up with developers, offering far from un-biased opinions on Adelaide’s future ‘hot-spots.’ Helpful relations at weekend barbecues too will offer their ‘expert’ opinions on where you should or should not direct your capital or potential Self Managed Super Fund. One such client, confused and seeking independant advice recently asked our opinion on a western coastal suburb... Osborne.
In terms of investment potential, the Port’s redevelopment and the long-term defence contracts at Osborne will drive property investment throughout most Le Fevre peninsula suburbs.
Semaphore, Exeter, Ethelton, Glanville and Peterhead are particularly in demand in the expectation they will outperform other suburbs, according to UniSA property lecturer Peter Koulizos. These five suburbs were also named by Australian Property Investor magazine recently in a list of the top 100 property hotspots in Australia. My opinion is the entire area will lift as a whole so we are then able to focus on stand out opportunities in the broader Le Fevre area.
Key drivers for growth in the area are the ongoing Port Adelaide regeneration and the $10 billion+ defence projects for the construction of submarines and air warship destroyers on the Port River.
Techport Australia, the evolving naval industry hub based at Osborne in the Port Adelaide area, is home to naval shipbuilder ASC and it's where three Air Warfare Destroyer vessels will be built for the navy at a cost of $8bn, to be followed by a $15bn (some reports say $30bn) enterprise to create 12 new submarines. The facility has state government backing, in the form of $300 million worth of state-owned infrastructure. The supplier precinct for naval defence and related businesses covers 35ha initially, but there are 500ha available for long-term development.
The $8bn project to create three major vessels for the navy is under way, with ships to be delivered in 2014, 2016 and 2017 (with possibly a fourth destroyer to follow). Next in line is the submarine construction venture, Australia's largest defence project. Techport is already home to the Collins submarine support program, a 25-year contract. Outside Techport, but in the Port Adelaide area, new port infrastructure is to be developed by BHP Billiton to support its massive expansion of the Olympic Dam mine at Roxby Downs. Already awarded are a $40m contract with BAE Systems Australia (satellite communications), a $10m project with Babcock Strachan & Henshaw (torpedo launch tubes) and a $40m deal with Raytheon Missile Systems.

Much of the defence work at Osborne will require skilled workers and many of them will come from overseas. The state government expects the naval defence work to lift the state's defence workforce from 16,000 to 28,000 within three or four years. As most people generally want to live close to where they work, suburbs in and around Osborne will be in high demand.

So in summary, the factors suggest this area will perform positively. We encourage all of our clients to remain logical and seek independant unbiased advice before committing to major property investment. For advice on what opportunities we currently see arising in the Adelaide market, call Ben Ottewill at Direct Negotiations for a no-obligation chat.

If you are looking for a well performing residential or commercial investment property, an addition to your existing property portfolio or a home to live in, we guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ or call the team on +61 (0)8 84631997

Adelaide's Northern suburbs proposed master plan

A RECREATIONAL saltwater lake, a new marina and an 11km waterfront precinct are proposed as part of a redevelopment of the Dry Creek salt pans north of Adelaide.
Owner of the site, Ridley Corporation, has announced it will forge ahead with plans to develop the plains into a mixed-use urban development to house 20,000 new residents.
The project is being investigated in co-operation with Delfin Lend Lease – the developer behind Mawson Lakes – and the Land Management Corporation, which owns much of the surrounding land.
While the cost of the development has not been determined, the project is 30 per cent bigger in area than the $1.5 billion Mawson Lakes development and will house twice as many people.



Ridley said a preliminary master plan prepared with Delfin Lend Lease had been completed as part of a feasibility study and included:
A DEVELOPMENT area of 980 hectares.
10,000 DWELLINGS housing more than 20,000 residents.
11 KILOMETRES of developable waterfront land.
A 40 HECTARE town centre and mixed-use precinct.
TWO neighbourhood precincts.
A 120-HECTARE saltwater recreational lake with ocean access and marina facilities.
CREATION of dedicated areas for new mangrove habitats and wetlands.
City of Salisbury manager Stephen Haines said it would be an enormous boost to the northern suburbs.
"This proposal will bring support to our commercial centres, it will provide employees for the many jobs being created out here and it will be a boost to the university and schools in this area," he said.
The second phase of Ridley's feasibility plan will be completed by December this year, and the LMC said it expected to provide the State Government with an interim report on the development early next year.


If you are looking for a well performing residential or commercial investment property, an addition to your existing property portfolio or a home to live in, we guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ or call the team on +61 (0)8 84631997

Norwood Auction

I have just returned from a Fri 11.30 am auction in Sydneham Road, Norwood. The property was quoted at $385,000. A circa 1870 freestanding cottage in the heart of Norwood on a relatively small allotment. There were approximately 30 registered bidders and about 100 people attending the auction. The bids opened at $425,000. (much to the dismay of 27 bidders!)Three remaining bidders assisted in bringing the hammer down in the 450k region.


Direct Negotiations rendered reports and cross referenced through various avenues and estimated this to be very close to the real value on the day. The market is moving along very well, and properties are selling quickly. The market is realistic. Properties are selling when priced accurately. There is huge demand for quality properties from local, interstate and offshore purchasers. The key is to be prepared with correct and up to date information in order to make clear investment choices.

DID YOU ATTEND THE AUCTION? WHAT ARE YOUR THOUGHTS?

If you are looking for a well performing residential or commercial investment property, an addition to your existing property portfolio or a home to live in, we guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ or call the team on +61 (0)8 84631997

Underquoting in South Australian real estate

It has started creeping back into the Adelaide residential real estate market...
UNDERQUOTING.-
I will very brieftly explain the changes that were imposed by REISA on the South Australian real estate industry. The document is about 40 pages. This is a summary on pricing.
Revised regulations came into effect in July 2008. The addtional laws were designed to curb pricing irregularities. In the sales agency agreement the document must specify the agent's genuine estimate of the selling price of the property. The price can be expressed as a single figure (e.g. $400,000), or a price range. A price range must be specified by nominating upper and lower values. The upper value must not exceed the lower value by more than 10%. That is to say, if the lower value is $400,000 then the upper value can not be higher than $440,000. The lowest quoted amount in a price range,represents the lowest amount of money that the vendor (seller) stated that he/she would accept in payment for the property.

Potential home buyers and investors are lured into thinking they have a genuine opportunity of securing the property based on the agent's relatively understated price indication. The purchaser proceeds to expend time, money and emotion, including building & pest inspections, strata inspection reports, architects for renovations, solicitors & conveyancers, council searches and deposit money preparation to finally discover that they never had a chance of being successful & the seller wouldn’t have ever accepted the price that was originally quoted by the agent. The price was simply used to ‘bait’ their interest.
This method of underquoting attracts a lot of buyers to ‘sale by negotiation’ as well as auctions. Mislead purchasers create a sense of excitement in the early stages, while the more astute and well informed buyers attend with a plan, a budget and primary/seconday information required to accurately evaluate the offering.



The majority of agents originally took these regulations quite seriously.
The market has been bouyant in the lower - medium sector. Median home values in South Australia have risen during a very turbulant eighteen months. There has been a lot of confusion about global property values, particularly to those who have listened to the media without the consultation of primary or secondary research.
A real estate agent may make first contact with a vendor years before the property goes to market. The sales process involves the agent keeping in touch and giving updates as to market influences and pricing.- Some do this more effectively than others.
If an agent quotes a price to a vendor a year prior to listiing, then takes a month to start the sales campaign, and another month to sell, then after 14 months, the price will have adjusted, sometimes by 15%, taking into considerations that over 10 suburbs have risen over 38% in the last 2 years.
The vendor and agent may advertise the home a little over the original agreed value as of 14 months prior. The purchasers inevitably flock to an obvioulsy underpriced property and climb over each other to throw offers at the agent. When there are dozens of interested parties, then emotion dominates (even with entry level investors) and the price is driven up above genuine market value. This is known within the industry as "feeding the greed"
There are some agents who, for no reason other than to deceive, deliberately underquote or "lowball" the stated value - Especially in the case of auction.

Have you experienced blatant underquoting?
Have you been influenced to pay a considerable amount of money above the original stated asking price for a property?
We'd like to hear about it...

If you are looking for a well performing residential or commercial investment property, an addition to your existing property portfolio or a home to live in, We guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ or call the team on +61 (0)8 84631997

A brief history of Adelaide . Part 1/3

Colonel Light’s original plan for the 100 of Adelaide and its belt of parklands became the fundamental benchmark in Adelaide's planning in the post-war years. Work on the plan began in the late 1950’s. By 1959 interim recommendations were being considered and the final printed plan and illustrated report were submitted to State Parliament in 1962.



Adelaide in the late 1950s had a population of just over half a million. There was little urban development north of Gepps Cross, but the first houses were being built at Elizabeth. Tea Tree Gully was still rural and development did not extend south beyond Darlington. Migrants were flooding in. The population was increasing at 18-20,000 a year and metropolitan Adelaide had become the third largest and fastest growing city in Australia.
University students, women’s organisations and others became involved in basic surveys for the Plan and a small enthusiastic staff was engaged. It was thought feasible to plan for 20 to 30 years ahead to assist public utility and transport authorities. Forecasting future population is a hazardous task, but it was estimated that a million was likely by 1981 and many more by 1991.

A sudden downturn in the rate of population growth in 1970s resulted in the million figure not being passed until the turn of the century.



The hills limit Adelaide’s expansion to the east and the sea to the west, forcing expansion north and south. The most suitable land for urban development to the north lies on the plains nearer to the hills. Elizabeth had been planned with a town centre similar to the British new towns being built at that time and this form of development was thought to be adaptable for Adelaide’s expansion.


If you are looking for a well performing residential or commercial investment property, an addition to your existing property portfolio or a home to live in, We guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ or call the team on +61 (0)8 84631997

A brief history of Adelaide . Part 2/3

Decentralisation, satellite towns, tall blocks and higher densities had little chance of acceptance. Tea Tree Gully and Noarlunga developed later with their own major centres. The opportunity to establish a satellite town came in the early seventies; a site was obtained at Monarto and a development corporation established. Forecasts of reducing population growth caused its demise, giving additional impetus to Adelaide’s future northerly and southerly expansion.

New routes would be required to the north, northeast and south enabling unrestricted movement of people and goods; a system of freeways, major roads and rail extensions were proposed. These proposals needed more detailed investigation, as major land acquisition would be involved. American consultants were engaged and the resulting Metropolitan Adelaide Transportation Study (MATS) took place in the 1960s. Its recommendations included additional freeway routes and a rail subway under King William Street. The study caused widespread concern as individual properties on all the new routes could be identified. Some routes were dropped but others were retained.



The O’Bahn now operates on the original route proposed to Tea Tree Gully. To the north new routes have been established with links to Port Adelaide; to the south the Expressway extends to the Onkaparinga and the railway has been extended to the Noarlunga Centre. Land was being purchased for the important but controversial north-south connecting route through the western suburbs, but the proposal was finally abandoned in the 1980s. This has meant a continuing increase in traffic on the inadequate South Road.

New parks and recreation areas were necessary near where people were to live and secured long before the need arose. The plan recommended a means of financing their purchase. Subsequently the amount of land for open space was increased when land was divided into allotments and money from small divisions and strata titles paid into a special fund. An unexpected source of federal funds enabled almost all the land proposed as open space to be obtained by 1977.

If you are looking for a well performing residential or commercial investment property, an addition to your existing property portfolio or a home to live in, We guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ or call the team on +61 (0)8 84631997

A brief history of Adelaide . Part 3/3

At the end of the 1950s the State’s economy was evolving from a dependence on primary production towards an economy based on manufacturing and service industries. Port Adelaide and the north-western suburbs were the traditional location of industry and have continued to be so. There was a brief flurry of expectancy in the 1990s when land near the port was selected as the site for Australia’s hi-tech Japanese Multi Function Polis. Industrial sites were being provided in Elizabeth and there was other suitable land in Salisbury. To the south, industry was already located along South Road, an oil refinery was to be built south of Hallett Cove and adjacent land was thought suitable for industry.

Speculative post-war subdivision was resulting in unmade roads and inadequate services. The development of Elizabeth set a new pattern to be followed by developments such as West Lakes, Golden Grove, Seaford and Mawson Lakes; all with landscaped roads, shops, schools and open spaces.




In the 1950s there was strong public attachment to single storey houses on spacious allotments and acceptance of closer living to reduce servicing costs seemed unlikely. Over the following years single person households have increased, smaller lots created and apartment living accepted.
The high costs of servicing the steep land overlooking the city provided a sound economic reason for limiting development and thus preserving its natural beauty. The Hills Face Zone has remained relatively unscathed for several decades, but its retention needs constant vigilance.



The most noteworthy outcome of the 1962 Plan’s recommendations has been that planning has become an integral part of State and local government administration with departments serviced by professional staffs and public appeal rights against adverse decisions. Fifty years is a short time in the life of a city. Others than someone involved with the plan’s preparation will judge whether it maintained Adelaide’s reputation as “a monument to far sighted town planning”.



If you are looking for a well performing residential or commercial investment property, an addition to your existing property portfolio or a home to live in, We guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ or call the team on +61 (0)8 84631997

Adelaide housing shortage to intensify

ADELAIDE will need almost 30,000 new houses in the next five years to keep up with an escalating population, a new report shows.

The Australia On The Move report, released yesterday, forecasts Adelaide's population to increase by 18 per cent – or 213,823 – by 2027.

The Residential Development Council and Matusik Property Insights report reveals Adelaide will need an extra 5856 houses every year for five years.

The forecast is higher than an 2001 report, conducted by demographer Bernard Salt, which said Adelaide needed 5113 new houses each year between 2001 and 2011 and 3788 every year after that until 2031.



Residential Development Council executive director Caryn Kakas said the Australian population was expected to explode. That will certainly add stress to the Adelaide housing supply and demand deficit.

"Limited supply and rising demand can only lead to one thing: rising prices. And rising prices means less affordable housing," she said.

The report shows Adelaide's current estimated residential population is 1.18 million. That is expected to increase by more than 200,000 by 2027.

South Australia's population is forecast to grow by 17 per cent to 1,898,754. Australia's population is anticipated to increase by almost six million people within 20 years which means at least 155,000 houses per year during that period will be required.

If you are looking for a well performing residential or commercial investment property, an addition to your existing property portfolio or a home to live in, We guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ or call the team on +61 (0)8 84631997

South Australia Honeymoon Mine JV is in the Yellow

Japan’s Mitsui and Canada’s Uranium One have reached a milestone in their development of the $118 million state-of-the-art Honeymoon uranium mine.

Construction began in April on the mine in South Australia’s north-east, 37 years after yellowcake was first found at the site.

Premier Mike Rann has congratulated the Honeymoon joint venture as the first foray by a Japanese investor into Australia’s uranium mining industry.

“Honeymoon will be capable of producing about 400 tonnes of uranium oxide a year, worth about $80 million to South Australia’s tally of annual mineral exports,” Mr Rann says.



The mine is one of the many projects proceeding in South Australia’s resource industry.

Mineral Resources Development Minister Paul Holloway says four or five mines are expected to be approved in the next 12 months, building on the 11 operating in the State now.

Among them is the Jacinth-Ambrosia mineral sands project, which is on track to begin operations in 2010, while the proposed Olympic Dam expansion took another step toward fruition with the release of its environmental impact statement in early May. Submissions will be received until 7 August.

South Australia’s resources sector remains strong despite the downturn in mineral exploration spending reflected in the latest Australian Bureau of Statistics figures.

If you are looking for a well performing residential or commercial investment property, an addition to your existing property portfolio or a home to live in, We guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ or call the team on +61 (0)8 84631997

South Australian international student intake up 24%

South Australia’s international education industry continues to defy the economic downturn by outstripping the national average to record a 24% jump in overseas student enrolments in the first three months of 2009.

Employment, Training and Further Education Minister, Michael O’Brien, says the latest Australian Education International (AEI) figures emphasize the resilience of international education in the face of the global financial crisis.

“It’s up to 30% cheaper for many Asian students to study in Adelaide this year due to the lower Australian dollar,” Mr O’Brien says.

“That’s reflected in the 24.3% hike in enrolments we’ve recorded so far in 2009 – our strongest growth rate in seven years.

“If that growth continues, we are on target to attract a record 32,000 international students by the end of the year,” Mr O’Brien says.

Nationally, AEI figures show that international student enrolments rose 20.8% in the first three months of 2009 – pouring more than $15 billion into the national economy.

Mr O’Brien says the continued buoyancy of South Australia’s $741 million international education industry is no mere accident.

“South Australia’s university and training providers must be commended for their highly professional international office marketing and recruitment programs.

“And we don’t just reap financial benefits: our education providers are helping to teach the next generation of Asian leaders, which in turn enhances their understanding of our language and culture and fosters closer ties with South Australia.”

‘The State Government is also providing $500,000 for primary and high school fees to be waived for the dependants of international Higher Degree by Research students studying at South Australian universities.

“This is a positive initiative coming from next week’s State Budget, which will rectify the disadvantage we have faced against other states offering fee waivers.

“This fee waiver only applies to Higher Degree by Research students who are sponsored by scholarships from their home countries.

“The scheme, to be funded over four years, will boost university efforts to attract the brightest students from countries such as Malaysia, Vietnam and the United Arab Emirates.

“The decision means we will be in a position of parity with our major interstate competitors and it provides an opportunity to expand our research and innovation base,” Mr O’Brien says.

Commencements in South Australia grew 21.1% to the end of March, compared with a national average of 18%.

If you are looking for a well performing residential or commercial investment property, an addition to your existing property portfolio or a home to live in, We guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ or call the team on +61 (0)8 84631997

Adelaide house prices 2009

Australian home values recorded a healthy 2.8% increase over the first four months of 2009

The RP Data/Rismark Australian Home Value Index out today confirmed that housing values around Australia rose by a healthy 2.8 per cent over the first four months to April 09—virtually wiping out the price falls seen in 2008 according to RP Data National Research Director Tim Lawless.

Over the first four months to April 09, every mainland capital city apart from Perth recorded an increase in home values with the most significant gains in Darwin (+5.3 per cent), Melbourne (+4.4 per cent), and Sydney (+3.9 per cent).

The recent growth in the Australian residential property market has fuelled speculation about a ‘bubble’ developing in the first home buyers market but RP Data’s Mr Lawless believes these claims are largely unjustified.



“Home values in Australian capital cities mortgage belts, which are the prime first home buyer markets, were flat or falling between 2004-07 while the inner city and affluent markets enjoyed consistent growth. In 2008-09 we have seen a reversal of these fortunes,” he said.

Mr Joye adds “While first-time buyer activity has certainly supported the market, people forget that 70-75 per cent of home buyers are not first timers. Also, lending standards are more conservative today than they have been for over 15 years with maximum borrowing ratios being consistently reduced.”

The return to capital growth comes as weekly rental rates start to level.

Mr Lawless said, “Rental rates across Australia have powered ahead over the last three years, providing the best gross rental yields investors have seen for a long time.

“We are now seeing growth rates for weekly rents start to level due to decreasing rental affordability which is causing many renters to consider buying a home instead of renting.

“Gross rental yields are likely to peak over the coming months suggesting that now is probably the best time for investors to roll up their sleeves and become active,” he said.

In terms of housing stock, units are continuing to outperform houses where over the first four months of 2009 values increased by 3.3 per cent while house values increased by 2.7 per cent.

In closing Mr Lawless said “The stronger performance of the unit market is due to a number of factors. Comparing median house and unit values nationally, the price gap between is just over $90,000, so the value proposition of a unit is very compelling. Additionally, units are generally located closer to the city and along transport spines which is very appealing to many Gen Y and Gen X buyers,” he said.

The monthly Australian capital city home value changes are as follows: January (+0.1 per cent); February (+1 per cent); March (+0.6 per cent); and April (+1 per cent). The April index results are indicative and may be subject to small revisions.


If you are looking for a well performing residential or commercial investment property, an addition to your existing property portfolio or a home to live in, We guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ or call the team on +61 (0)8 84631997

First contract awarded to Adelaide firm in Federal Governments $300bn defence plan

A battery-manufacturing company from Adelaide's western suburbs has been awarded the first contract to work on research and development for 12 planned new submarines.
Pacific Marine Batteries has hired 20 engineers and technicians to design a battery that may be used to power the new submarines.

The South Australian Premier, Mike Rann, says the research and development contract for a battery is an important one.

"At the moment each Collins class submarine carries about 450 tonnes of batteries, but the next generation of submarines is going to need about 650 tonnes of batteries and they're going to have to have a longer life, because the new submarines are going to have a longer range and are going to spend longer under water," he said.



The state's hi-tech defence and ship-building industries would benefit from billions of dollars of weapons purchases including new warships, fighter jets, and manned and unmanned spy planes proposed to be based at the Edinburgh RAAF base.

Billions of dollars and thousands of jobs are earmarked for South Australia in the Federal Government's $300 billion defence contracts plan.

The plan for defence equipment across the nation includes:

100 stealth jet fighters,
EIGHT new frigates,
20 fast offshore combat vessels,
SIX heavy landing craft,
66 new helicopters,
EIGHT maritime patrol planes,
A 15,000-tonne supply ship.

The army's expansion has been set in stone and the new Adelaide-based battalion and all the ancillary works associated with it will now proceed.

Bigger salaries, conditions and housing for the Australian Defence Force's 55,000 uniformed personnel is also provided.

SA Premier Mike Rann says it will secure thousands of jobs and years more shipbuilding work in Adelaide.

"This is the cream on the cake for us and also guarantees another massive project to follow the air warfare destroyers project," he said.


If you are looking for a well performing residential or commercial investment property, an addition to your existing property portfolio or a home to live in, We guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ or call the team on +61 (0)8 84631997

BHP Billiton Olympic Dam expansion - Shot in the arm for South Australia

BHP Billiton is seeking the approval of the Australian, South Australian and Northern Territory governments for a significant expansion of its existing mining and processing operation at Olympic Dam in northern South Australia.

Located 560 kilometres north of Adelaide, South Australia, Olympic Dam is a multi-mineral ore body. It is the world's fourth largest remaining copper and gold deposit and the largest known uranium deposit. It also contains significant quantities of silver.

The proposed expansion would be a progressive development, requiring construction activity over a period of 11 years. The project schedule ultimately will depend on the timing and nature of government approvals and the final investment decision of the BHP Billiton Board.

BHP Billiton has announced plans to turn its Olympic Dam mine in South Australia into the largest open cut on earth.

A 4600-page environmental impact statement, released by the company May 1, 2009 , set out an ambitious timetable for the conversion of the copper, gold, silver and uranium mine from underground to pit operations.


Work would start as early as April 2010 on the multi-billion-dollar upgrade.


Under BHP Billiton's best-case scenario, excavation of the 1km-deep mine pit, and possibly construction of a pipeline to supply a gas power plant, would be under way by July next year.

By that time, a mini-city known as Hiltaba Village would be rising in the desert to house the thousands of workers needed for the project. This would be in addition to the expansion of the existing township of Roxby Downs.

The mine's workforce would double from 4000 to 8000 when it reached full capacity, with 2500 additional houses to be built for permanent workers. The operation representing the world's biggest single producer of uranium and one of the biggest of copper.

The open cut envisaged by BHP Billiton at Olympic Dam would become the biggest man-made hole on the planet and yield $1 trillion worth of ore over its century-long life, more than $200 million per annum of which would be paid in royalties to the South Australian Government. Production would lift six-fold from 12 million tonnes of ore annually to 72 million tonnes after 2020.

"We will work with BHP Billiton to maximise the number of jobs here in South Australia" The South Australian Premiere, Mike Rann said.

South Australian Mineral Resources Development Minister Paul Holloway yesterday said the Government was not blinded by the wealth on offer at Olympic Dam.

"If there are issues we do not believe have been addressed properly, then we will ask BHP to reconsider them and make appropriate amendments," Mr Holloway said.

If you are looking for a well performing residential or commercial investment property, an addition to your existing property portfolio or a home to live in, We guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ or call the team on +61(0)8 84631997

How did we get here?

While on his morning walk, Prime Minister Kevin Rudd falls over, has a heart attack and dies because the accident and emergency dept at his nearest hospital is too understaffed to treat him in time.

So his soul arrives in Heaven and he is met by Saint Peter at the Pearly Gates. 'Welcome to Heaven,' says Saint Peter, 'Before you settle in, it seems there is a problem. We seldom see a Socialist around these parts, so we're not sure what to do with you.'

'No problem, just let me in; I'm a good Christian; I'm a believer,' says the PM.
'I'd like to just let you in, but I have orders from God. He says that since the implementation of his new HEAVEN CHOICES policy, you have to spend one day in Hell and one day in Heaven. Then you must choose where you'll live for eternity.'

'But I've already made up my mind. I want to be in Heaven,' replies Rudd 'I'm sorry .. But we have our rules,' Peter interjects. And, with that, St.
Peter escorts him to a lift and he goes down, down, down ...all the way to Hell.

The doors open and he finds himself in the middle of a lush golf course.
The sun is shining in a cloudless sky. The temperature is a perfect 22C degrees. In the distance is a beautiful club-house. Standing in front of it is Gough Whitlam and thousands of other Socialist luminaries who had helped him out over the years --- Bob Hawke, Paul Keating, etc. The whole of the Labour Party leaders were there ..

Everyone laughing, happy, and casually but expensively dressed.
They run to greet him, to hug him and to reminisce about the good times they had getting rich at the expense of 'suckers and peasants.'

They play a friendly game of golf and then dine on lobster and caviar. The Devil himself comes up to Rudd with a frosty drink, 'Have a tequila and relax, Kev!'

'Uh, I can't drink anymore; I took a pledge,' says Rudd, dejectedly.
'This is Hell, son. You can drink and eat all you want and not worry and it just gets better from there!'
Rudd takes the drink and finds himself liking the Devil, who he thinks is a really very friendly bloke who tells funny jokes like himself and pulls hilarious nasty pranks, kind of like the ones the Labour Party pulled with their master strokes on Education, Immigration, Petrol prices, Tough on Crime promises.

They are having such a great time that, before he realises it, it's time to go. Everyone gives him a big hug and waves as Rudd steps on the lift and heads upward.

When the lift door reopens, he is in Heaven again and Saint Peter is waiting for him. 'Now it's time to visit Heaven,' the old man says, opening the gate.

So for 24 hours Rudd is made to hang out with a bunch of honest, good-natured people who enjoy each other's company, talk about things other than money and treat each other decently. Not a nasty prank or short-arse joke among them. No fancy country clubs here and, while the food tastes great, it's not caviar or lobster. And these people are all poor. He doesn't see anybody he knows and he isn't even treated like someone special!

'Whoa,' he says uncomfortably to himself. 'Gough Whitlam never prepared me for this!'
The day done, Saint Peter returns and says, 'Well, you've spent a day in Hell and a day in Heaven. Now choose where you want to live for Eternity.'

With the 'Deal or No Deal' theme playing softly in the background, Rudd reflects for a minute ... Then answers: 'Well, I would never have thought I'd say this -- I mean, Heaven has been delightful and all -- but I really think I belong in Hell with my friends.'

So Saint Peter escorts him to the lift and he goes down, down, down, all the way to Hell.
The doors of the lift open and he is in the middle of a barren scorched earth covered with garbage and toxic industrial wasteland, looking a bit like the eroded, rabbit and fox affected Australian outback, but worse and more desolate.

He is horrified to see all of his friends, dressed in rags and chained together, picking up the roadside rubbish and putting it into black plastic bags. They are groaning and moaning in pain, faces and hands black with grime.

The Devil comes over to Rudd and puts an arm around his shoulder.' I don't understand,' stammers a shocked Rudd, 'Yesterday I was here and there was a golf course and a club-house and we ate lobster and caviar and drank tequila. We lazed around and had a great time.. Now there's just a wasteland full of garbage and everybody looks miserable!'

The Devil looks at him, smiles slyly and purrs, 'Yesterday we were campaigning; today you voted for us!

First Home Owners Grant boost to end June 30

Q: Who are Direct Negotiations?

A: The Direct Negotiations team is Adelaide’s leading property buyers agents. We don’t sell property, we buy it on behalf of local, interstate and overseas clients.

Q: What are the principal points of the Direct Negotiations business that make it different from others?

A: We act totally independently on behalf of the purchaser. Our team’s background extends across property acquisitions and consulting, finance, building and construction, commercial property, development and wealth creation. We are in the best position to mitigate risk and assist in making the right choice for investors and home owners to meet their requirements on all types of property.


Q: Is there growth in any particular areas?

A: Many areas, that were traditionally less desirable because of difficult access, surrounding zoning or lack of public transport are now being rearranged. The long list of new infrastructure projects both projected and under construction, have enabled us to identify areas of growth due to the ripple effect, access to modern facilities and changing lifestyles.


Q: What is the best type of property to buy?

A: Choosing the right investment property for your individual circumstances and goals requires a thorough understanding of the key principles and dynamics of investment property. Whether you need to isolate niche areas offering strong future capital growth potential, homes providing effective tax depreciation, strong rental yield, or subdivision/development opportunities for immediate equity, all depends on your short and long term goals and your current position. An individual strategy is devised for each client to match their unique circumstance.

Q: How do you see the South Australian market at present?

A: South Australia offers some of the nation’s most affordable housing and most appreciable assets. Adelaide’s median house price is significantly lower than that of Sydney, less than Perth, Melbourne and Darwin. This means you can own your own home or investment for a lot less – or alternatively, buy more property for the same money. House prices are stable and strong capital growth is on the horizon with our mining and resource deposits, unprecedented skilled immigration levels and massive injection of cash for infrastructure. This potential, makes Adelaide real estate currently and looking towards the future, one of the world's most stable investment vehicles.

Q: Any advice for first home buyers?

A: It is vitally important to be educated and well informed before undertaking to commit to potentially the biggest financial decision of your life. Your first home is your first investment property and it’s crucial you make the right choice in terms of property, location, and paying the right amount. A buyer’s agent is a valuable ally to first home buyers, walking them safely step by step through the entire process. With the increased grant potentially only being offered until 30th June this year however, time is of the essence!

If you are looking for a well performing residential or commercial investment property, an addition to your existing property portfolio or a home to live in, We guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ or call the team on +61 (0)8 84631997

Houses in Adelaide selling before first open inspection

Many potential property buyers are getting frustrated. Adelaide properties that are advertised for sale are commonly already under contract before the buyer has the opportunity to view. This is frequently the case with properties at and under the $400k AUD price range.
Through our networks and databases, we are alerted to properties before they are available to the public. Direct Negotiations purchased several properties this week before the signboard was put on the property.
Last night I organised a private inspection of a particular property that was later to be presented to the market. The agent asked if I didn't mind if a couple of interested groups came through at the same time. There were, in fact seven groups pushing their way in the door. The property lived up to expectations and every single group walked out the door full of anticipation with a "letter of offer" form. What they did not realize was that I had already prepared a contract, complete and signed on behalf of my (off shore) client, with the right price and conditions (negotiatiated prior to inspection). Vendors agreed and signed. The property was under contract to Direct Negotiations.
This morning there were likely be at least four letters of offer being submitted for a property that was sold before they actually walked through the front door.

If you are looking for a well performing residential or commercial investment property, an addition to your existing property portfolio or a home to live in, We guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ , or call the team on +61 8 84631997

Real property in super.

An unfortunate consequence which has occurred as a result of the stock market crash is that many hard working people who require retirement funds, associate the term superannuation with shares, the stock market and huge risks/losses together with commissions and ongoing ‘trails’ to financial planners.
Many of these persons also think that by putting their hard earned cash into superannuation that it has to go into the stock market linked investments and that they immediately lose control and at the same time will be subject to fixed and ongoing fees from financial planners.
Nothing is further from the truth!
A superannuation fund, in most cases is the best ‘investment vehicle’ people can use to accumulate a secure retirement income.
This is why………….
Superannuation funds accomodate better tax breaks than any other ‘investment vehicles’. During the ‘accumulation mode’ the maximum income tax is 15% or 31.5% less than the top tax rate including Medicare.
Capital gains tax for profits on assets held for longer than 12 months in a superannuation fund is 10% and does not attract Medicare surcharges as compared with the top personal taxation rate of 46.5%. Benefits from Salary Sacrificing into superannuation in some cases can reduce personal tax during the accumulation mode in some cases (dependent on individual circumstances) to nil thus saving 46.5% tax.
Superannuation funds with the use of warrants, can now purchase property without the need to have the entire purchase price together with stamp duty at the time of purchase. That is to say they can gear real estate investments.
Prior to the stock market crash, many people had a vast percentage of their wealth invested in stocks and shares via their Superannuation.
The current prevailing attitude towards superannuation-while totally understandable, is foundered by fear and frustration must be put to rest by accountants and superannuation professionals in an effort to protect the workers from incurring even more financial loss and pain.
Legislation is available to enable all tax payers to put away money for their retirement at world competitive taxation rates. The legislators obviously have done their part. Its now up to the investment advisors to ensure that savvy investors have a comfortable retirement by stepping up and doing their part and advising people of their options so that those who want to invest our superannuation into investments other than stocks and shares, such as direct property, have the choice to do so.
Superannuation now offers distinct alternatives.

If you are looking for a well performing residential or commercial investment property, an addition to your existing property portfolio or a home to live in, We guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ , or call the team on +61 8 84631997

First home buyers battle the investors in Adelaide.

Adelaide remains within the top 10 real estate locality performers WORLDWIDE.
The median Adelaide house price remains at a relatively affordable $373,000.
With all the turmoil in investment markets over recent months, many
investors will be asking if they have done the right thing by investing
in shares or managed funds. Many will be looking cautiously towards
bricks and mortar in 2009 as a potential safe-haven for their
investment dollar.
While some see the current global economic crisis as a reason to
despair, the reality is the current local property market has an
abundance of opportunity ripe for the picking... if you know where
to look.
Just about anyone can make money when the market goes up, but
only skilled, properly informed and educated investors will make
huge profits as skill supersedes luck.
The secret to successful investing is a counter-cyclical approach・
Traditionally, human nature tells us to invest when markets are going
up and to sell when markets are in decline. However, we need to
change our mindset and avoid the herd mentality'・instead, invest
when everyone else is selling (giving us maximum choice, discounts
and negotiating power) and sell when everyone else is buying.
Similarly with longer term investments, we should be buying when
markets are down and hold on to our investments for the long term.
Time in, not timing.
Warren Buffett is quoted as saying:
be fearful when others are greedy and to be greedy only
when others are fearful.・
The world's most successful investors make their money by buying in
the gloom and selling in the boom. To fully understand the current
market and how to profit and make the right decisions for your
investment portfolio, now more than ever you need sound coaching
and advice.
The problem is - where do you turn for help and good advice?
That's where Direct Negotiations can help. Unlike real estate agents and
spruikers/seminar holders, we won't ever try to sell you a property.
Instead, we'll provide you with un-biased independent advice,
comprehensive research, and guidance to ensure you select the
right investment, in the right area, at the right price.
Whether you're a novice or seasoned investor, we can help you wade
through the myriad of land mines in the property market, and see
you on your way to stability and success in 2009!

If you are looking for a well performing residential or commercial investment property, an addition to your existing property portfolio or a home to live in, We guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ , or call the team on +61 8 84631997

Just keeping it real

Capital City Performance
Annual change in dwelling value – year ending August 2008

The national end of month property indices report released
today by RP Data & Rismark International confirms that the
supply and demand imbalance currently being experienced in
the Australian property market has placed a floor under housing
prices, resulting in minimal value falls.
Based on the analysis in the report, this is most evident in the
metropolitan areas around the country where record
national dwelling values remaining positive over the 12 months ending August 2008. Over the three months to August 2008
there was a modest overall national decline with property values down by just 0.96 per cent over this period.
population growth has not been accompanied by new dwellings
to satisfy the housing demand.
According to RP Data National Research Director Tim Lawless
the property market has proven to be remarkably resilient with
Mr Lawless said the recent figures should put to rest claims that Australia’s property market is headed for a crash.
“In fact, values are holding relatively firm particularly when compared to the benchmark equities S&P/ASX 200 Index which
dropped by 19 per cent between January and August,” he said.
The only capital city to record a material decline in property values was Perth where this market fell by 5.69 per cent over the
August 2008 period. While this fall in values has caused some distress for home owners, Mr Lawless reminds owners that the
results need to be placed into context where values increased by 13.9 per cent annually over the past five years.
One of the most interesting findings in the indices release today was the convergence of the capital city market dynamics over
the past six months which revealed that all capital cities recorded slightly negative growth; no particular city was significantly out
of step with the others.
According to Rismark International’s Dr Mathew Hardman “Clearly, the observable phenomenon of the two‐tiered markets in
Sydney and then in Melbourne and to a lesser extent in Brisbane and Perth has disappeared ”
Sydney and then in Melbourne, and to a lesser extent in Brisbane and Perth, has disappeared.
“Market movements are now similar across all metro areas rather than value falls being isolated within the mortgage belts. This
balancing can be attributed to the squeeze the more affluent markets are experiencing due to the turbulence in the financial and
equities sector.
“Looking towards the next six months, strong excess demand in most capital cities is creating a floor under property values,
making large falls unlikely,” Dr Hardman said.
According to RP Data, with population growth projected to remain high and interest rates falling, the demand/supply imbalance
is expected to protect the market from any major falls in property values.
Rismark International’s Dr Hardman believes that unemployment is not a major factor driving property prices; affordability,
excess demand and market momentum are far more significant he said.
“Although unemployment is rising, unless it grows rapidly to significantly greater levels, eg 6 or 7 per cent over the next couple
of years, excess demand will eventually outweigh affordability constraints and begin to push property markets upwards again,
probably by the second half of 2009.”
“Over the long term, home unit values tend to track GDP growth, while house prices exceed it by approximately 2 per cent. In
Sydney, house and unit values relative to GDP have returned to their pre 2000 levels so affordability is slowly returning to the
Sydney market,” Dr Hardman


If you are looking for a well performing residential or commercial investment property, an addition to your existing property portfolio or a home to live in, We guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ , or call the team on +61 8 84631997

Adelaide real estate data

::::::::::::::::::In a modern real estate market, it is crucial that buyers are well informed. Purchasing real estate has a greater technical aspect today than in the preveious decades, years and even months.
Adelaide has been a standout performer worldwide- historical and current data support its longevity. The point is, that it is critical to be well informed and have not only the right information at hand, but the buyer or buyer's representative must also know how to "drive it".
The local newspapers and internet report figures everyday that originate from reasonable sources, but predominately the operators have very little or no hands on experience regarding the Adelaide real estate market and are drawing statistics, creating reports from programs without actually knowing what it means.
For example:
Adelaide's southern beach suburbs, such as Christies Beach and Port Noarlunga have performed extremely well in the last 36 months and continue to do so. The difficulty in understanding this from a newspaper report that exclaims a 35% change in the market (either up or down) is that beachfront properties sell at or around one million dollars while several streets back, a 3 bedroom family home can be secured for $250k with a healthy rental yield. Given a month in which 15 houses are sold in Christies Beach,(a mixture of 4 beachfront and 11 backstreet homes) and reported in printed press against another single month (in which sales consist of 12 homes predominately in backstreets) sold in the same suburb, the newspaper has a habit of taking total dollar value over an unreasonably short sample duration and reporting a large percentage drop/rise.
There are hundreds of scenarios and I will talk more about these over the next few weeks.
Adelaide real estate is actually operating at a healthy and sustainable overall growth rate of around 3% over the last 36 months.
Buyers must be very careful from where they draw their information. Direct Negotiations has access to genuine, up to the minute sales figures on every house in every suburb. Our consultants are trained to interpret reliable data and generate accurate reports for Adelaide property buyers.
Tell us what type of property that you require
http://agents.realestate.com.au/cgi-bin/cs/run.pl?_t=EmailFriend&_c=MJGJJY&st_Contact=1

If you are looking for a well performing residential or commercial investment property, an addition to your existing property portfolio or a home to live in, We guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ , or call the team on +61 8 84631997

Unique circumstances for Adelaide property buyers

The Reserve announced it will cut its official cash rate by 1 percentage point to 3.25 per cent, effective 3/02/09. In practical terms for homebuyers, financial institutions that commit to passing on the cut in full, effectively offer a standard variable rate of 5.91%
For a family with a $400,000 loan, Tuesday's rate cut, if passed on in full, represents a monthly saving of $248. In addition to the savings from last year's rate cuts of 3 percentage points, (banks passed on about 2.78 percentage points) the total saving for a family with a $400,000 loan is $990 a month.
Buyer's general caution in the real estate market has resulted in a choice of property available and some quality properties scattered amongst the non performers. Rental demand is strong and strengthening.
Investors are back into the 5-6% yield and the first home buyers are being offered the equivalent to their deposit,stamp duty and money to spare. The government has released its $42B economic stimulus package. Fuel prices are down.
These circumstances were completely unexpected and are unlikely to stack up this way again in our lifetimes. Individuals and society learn from their mistakes. The upside of this is that investors have the opportunity to safety and strategically build their portfolio while first home buyers can confidently get their foot in the door. This "perfect storm" cannot last forever, but while the circumstances are such, purchasing real estate in the resilient Adelaide property market is one of the strongest investments available.


If you are looking for a well performing residential or commercial investment property, an addition to your existing property portfolio or a home to live in, We guarantee to save you money on your next real estate purchase. Go to or call the team on +61 8 84631997

Real Estate Adventures in Adelaide

On Tuesday night I attended the book launch of Sally Couper's Real Estate Adventures.
Very inspiring, like minded and real (not to mention wealthy!) people just doing what they love.
The book is an excellent read. A very down to earth and realistic account of one woman, surrounding herself with hard working, reliable contacts, a can-do attitude and rapidly becoming an owner of over 50 properties in several countries and a self made multi-millionaire. The guest speakers were entertaining and informative in their individual ways, but had a similar message - Don't just think about it, do it!

To obtain a copy of Real Estate Adventures, you can buy online at www.sallycouper.com.au
Highly recommended!

If you are looking for a well performing investment property, an addition to your existing property portfolio or a home to live in, We guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ , or give us a call on +61 8 84631997

Adelaide property values defy global downturn

South Australian house prices have defied the global property plunge by recording 4 per cent growth in the past year.

Valuer-General figures show median house prices across the state increased to $332,800 in the December quarter from $320,000 a year earlier.

Adelaide metropolitan prices grew 1.4 per cent for the year to $360,000 while rural prices rose 2 per cent to $245,000.

But a slowing property market was reflected in a 0.7 per cent fall in metropolitan prices between the September and December quarters, and a 0.8 per cent fall in rural prices.

This was still much less than the 6 per cent fall experienced by Perth homeowners in the September quarter – the worst capital city result recently recorded.

Falls of up to 50 per cent in the U.S. housing market triggered a global financial crisis when borrowers defaulted on their loans.

Similar plunges have been experienced in parts of Britain.

But interest rate cuts of 3 percentage points by the Reserve Bank of Australia in the past four months are expected to revive the SA market, with agents predicting an increase of up to 10 per cent this year.

Homeowners in Brighton were the winners in the December quarter, with the median value of houses sold rising more than 38 per cent on the previous year to $747,500.

West Lakes homeowners also benefited from a 37 per cent increase to $700,000, while the value of Tea Tree Gully houses sold increased 25 per cent to $368,500.

Brock Harcourts chief executive Greg Moulton said the data showed SA was bucking the national trend.

"What that's telling people is that the overall SA market has continued to grow, so people should be seeing that their fears were wrong," he said.

"A lot of people predicted our capital growth to go down. It hasn't – it's grown, and it should continue to grow."

Adelaide house prices have slowed after last December's 7.7 per cent growth, with a 2.2 per cent fall in September offsetting a similar rise in March.

Professionals SA chief executive Ted Piteo said SA house prices had held their value after 18 per cent growth in 2007.

"The values aren't down, it is the sales that are down," he said.

Only 5279 houses changed hands during the quarter, 32 per cent fewer than a booming December, 2007, quarter.

Mr Moulton said this was due to market uncertainty.

"The number of transactions are down because people are taking longer to make up their minds and it took people a bit of time to realise that interest rates were going to drop even further," Mr Moulton said.

"It takes a good two to three months after the interest rate drop for the flow-on effect to come through, so we won't see the benefit of the drop until the first month or two in 2009. People are reluctant to sell in a falling market so a lot of properties won't come on to the market.

"Also, potential buyers who are concerned about job security are less inclined to commit and enter the property market.

"That is why we are seeing a 30 per cent fall (in transactions), but last year was an absolute bumper.

"(This year) there are going to be some very agitated vendors who will accept low offers but the overall market will be one of continued stability."

SA house prices are forecast to climb between 5 and 10 per cent this year and are tipped to avoid falls expected in other markets.

The value of Victorian property has dropped 5 per cent since July, according to BIS Shrapnel and Sydney prices shrank 3.4 per cent in the September quarter.

But falls in the UK housing market still dwarf Australian figures, with a building society reporting a 34 per cent fall in Northern Ireland and a 16 per cent fall across the British market.

Here, falling interest rates and the Federal Government's $1.5 billion first-home buyers' bonus are expected to bolster the SA market, but not to the 2007 levels.

Mr Piteo said new state legislation about price advertising was expected to inflate prices – a trend expected to offset a slowdown related to uncertainty.

Real Estate Institute of SA president Robin Turner said SA had always performed reasonably well – a pattern he did not expect to change this year.

Quarterly median prices are more volatile than those based on annual sales because they have a smaller sample size

If you are looking for a well performing investment property, an addition to your existing property portfolio or a home to live in, We guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ , or give us a call on +61 8 84631997

It's not cheap - but it's Adelaide property at the right price.

We have now moved into the new year and had a good chat over the holiday season about whether or not to buy, or rather, when to buy property in Adelaide.

The fact is that there is a good choice of homes and investment property that have been sitting on the market, way overpriced - nevertheless waiting to be sold.

The market has become very realistic. I use the word "realistic" not to lessen any impact, but to describe accurately the climate that we are in.

Property that is priced accurately is selling very quickly. Buyers are looking for value. This is the time that a lot of poor performing properties are flung at the market, but in between the odd shaped blocks, main road frontages, "hammerhead development opportunities (stcc)" and "polished turds", there are some honest properties that will make very good homes for the next generation and yield around 6% return for the savvy investor. Recent properties that we have purchased have ventured into positive geared territory in only a few months.

No, it's not cheap, but if purchased well South Australian property will perform more effectively than cash deposits at the inevitable 2-3% soon to be offered by the banks.

If you are looking for a well performing investment property, an addition to your existing property portfolio or a home to live in, We guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ , or give us a call on +61 8 84631997

Buying Adelaide investment property from interstate and overseas.

Six simple steps for remote property investors. Direct Negotiations provides an end to end property search and acquisition service - For you.

The brief - Discuss your requirements, lifestyle, budget and investment strategy.

Property search - Extensively search the market to source the best property match. A large percentage of properties are never offered to the general public.

Feedback - Provide reports, property profiles, updates and photographs from our own sources as well as commercial and government databases.- real data and statistics.

Inspections - We personally inspect all properties that are a potential property match.

Evaluation - For properties that match your brief, we will provide guidance on market value based on sound market research.

Negotiations - We will negotiate or bid on your behalf to secure the property within a set price range. In many cases we have preferred pricing before negotiations even commence. We guarantee to show genuine net savings on your purchase.

Other services - We will coordinate other relevant services such as building inspections, conveyancing solicitor, mortgage broker, strata searches, property management, minor renovations.

Whether you are an Australian living overseas, or based in Australia, we are able to cater for your specific needs.

If you are looking for a well performing investment property, an addition to your existing property portfolio or a home to live in, We guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ , or give us a call on +61 8 84631997

Norwood house prices resilient

Please read a small case study that I did for Adelaide inner city suburb prices.
Sixteen months ago, I attended an auction in an area that I know very well, and where quality property will sell in all markets and economic climates if/ when correctly priced. Norwood, Adelaide.
I compared 2 Auctions of entry level properties located 3 km from the city centre of Adelaide.
The first property was a classic freestanding, single fronted , return verandah , 2 bedroom, C1910 bungalow on a 355m2 allotment. The home had been modified over time and was in need of at least a cosmetic renovation and preferably a rebuild of the extension.
The auction attracted almost a carnival atmosphere, with multiple bidders starting in the 300k's and finishing on bids of five hundred dollars at a final price of $457,500.

On Thursday 11th Dec, 2008 on an unseasonable rainy evening, I attended the auction of a second, comparable property. The property was a very similar freestanding, 2 BR, 320m block in need of renovation, situated 150 metres away from the previously mentioned property.
There were less onlookers and less bidders. The property opened boldly (by the eventual winner) at $400,000 AUD and was steadily and genuinely bid up in $10,00 and $5000 increments by 4 strong competitors.
The property was sold at $445,000 AUD.

These were the closest comparables that I had seen in that time. The land was smaller on the second property, where square meterage is at a premium.
My conclusion is that both properties were sold under similar conditions in very different markets. (Adelaide peaked sharply Dec 2007) Taking into consideration slight differences in allotment sizes and other minor variables, both properties were of similar characteristics and sold in different markets for very similar prices over a volatile period over 16 months.

Direct Negotiations has access to the facts.

If you are looking for a well performing investment property, an addition to your existing property portfolio or a home to live in, we guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ , or give us a call on +61 8 84631997

Lowest Australian interest rates since 1964

With the RBA slashing rates by 1% to 4.25% today, the housing market is poised for a significant increase in activity amid improving buying conditions and easing affordability constraints.

The extraordinary series of cuts now forecast would take the Reserve Bank cash rate to 2.5 per cent within six months. If the cuts passed through to mortgages, standard variable rates would hit a level not seen since 1964, when they were fixed at that level under the Coalition government of Robert Menzies.
Harley Dale, chief economist with the Housing Industry Association, said there are already some tentative signs that inquiries from investors are starting to pick up. "I think many are looking at their sums and are realising that with the amount of interest rate cuts and what remains a very tight rental market where yields are still climbing, it is now a good time to buy. Despite not getting the growth in asset at the moment, it's actually a good time to be investing in property particularly with what's happening with the share markets."
Tim Lawless, national research director with RP Data, said the rate cut would see further activity in the lower end of the market. "We do expect the markets that are likely to respond to the interest rate cut are the ones in the lower price segments because there has been a lot of pent-up demand building for these types of properties from first homebuyers and lower income families over the past few years. They are the markets that are becoming more active now and probably the ones that will respond first to further falls in interest rates."
However, Lawless said buyers are likely to remain very cautious as uncertainties over jobs continue to dominate.
"I don't think we're going to see a sudden increase in buying activity as a result of the latest rate cut. We have started to see more people go to open houses and inspections, but we haven't even seen a strong buying behaviour just yet. I think we're going to see the start of a gradual return to the market. It will be quiet over Christmas holidays so it won't be until the first quarter of next year that we're going to see any real signs of increase in sales volume as buying conditions and affordability will continue to improve."

If you are looking for a well performing investment property, an addition to your existing property portfolio or a home to live in, we guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ , or give us a call on +61 (0)8 84631997

Back In Black

Nationally, property value growth is back in the black.
Claims that the Australian property market would in 2008 experience a major downturn have been proven incorrect based on the most recent findings of the RP Data-Rismark Hedonic Property Value Index, which in October again showed that Australian capital city property prices had increased for the second consecutive month.
Released today, the RP Data-Rismark Hedonic Property Value Index showed that Australian dwelling prices had increased by 0.3 percent over the three months ending October ’08. On a month-on-month basis, Australian dwelling prices have now risen in the months of both September (+0.2 percent), based on the ‘final’ RP Data-Rismark index numbers, and in October (+0.4 percent) using the latest ‘indicative’ estimates.
Using Australia’s largest property database, the RP Data-Rismark Index results are reported by the RBA in its Statement on Monetary Policy and have recently been selected by the ASX as the basis for the ASX’s new residential property derivatives market. Moody’s and SIRCA have both independently concluded that the RP Data-Rismark Index results are the most accurate measures of house price change in Australia.
Based on RP Data-Rismark Index results, RP Data head of research Tim Lawless believes that the doom and gloom merchants have misunderstood the fundamentals and the diversity of the Australian residential property market by predicting that Australia was headed for a market-wide implosion in 2008.
“The facts are that over the past 12 months Australian property values have declined by just 0.8 percent which is a phenomenal result when compared to the S&P/ASX 200 index which reported a decline of 40.5 percent,” Mr Lawless said.
“The October RP Data-Rismark Index results reinforce my suggestion that the Australian property market has moved through the bottom of its cycle.”
“While we are likely to see property values remain relatively flat for the first half of 2009, it appears from the RP Data-Rismark Indices that Australian property values have proven to be remarkably resilient despite multiple interest rate hikes in early 2008 and the effects of the credit crisis.”
Rismark International managing director Christopher Joye said “The recent recovery is consistent with the big improvements in affordability brought about by the RBA’s decision to cut rates by 1.25 percent in September and October, combined with the government’s announcement that it would increase the first home owner’s grant as part of its $10.4 billion fiscal stimulus package.
“The RBA’s 0.75 percent rate cut in November has lent further support to the market with mortgage rates having fallen from a peak of 9.6 percent in August to around 7.7 percent today. Based on current futures market pricing, we should see mortgage rates fall below 6 percent during 2009,” Mr Joye said.
“The recent improvements in market conditions are also in line with housing finance volumes released by Australia’s largest mortgage broker, AFG, which announced that its October 2008 home loan volumes were the strongest since November 2007 rising by 18 percent in the month. Australia’s biggest property listings website, realestate.com.au, has also released data showing record increases for 2008 in home buyer activity during the months of September, October and November.”
“Recent dramatic improvements in affordability combined with Australia’s substantial housing supply shortages, low mortgage default rates and the absence of large volumes of distressed sellers will see the residential property market continue to deliver robust performance in 2009.

“With home loan rates likely to fall below 6 percent in 2009 and record low vacancy rates driving up rental yields, it is likely that more and more investors will begin to view the market in a positive light. For example, a recent report by RP Data identified 45 suburbs around Australia where the average rental property was likely to be cash-flow positive,” Mr Joye said.
For savvy investors the timing to enter the market is now better than ever according to RP Data’s Tim Lawless – “For investors who are willing to go against the flow, buying conditions are exceptionally strong and yields are improving every month,” he said.
“The fundamentals underlying the Australian property market are extremely robust. Investors need to take into account current supply constraints, infrastructure delivery, immigration, vacancy rates, rising rents and expectations that interest rates will continue to fall. These are the basics that should fuel capital gains for investors.”
“There is a very strong likelihood that more and more suburbs around Australia will move into the realm of positive cash flow.”
“With dwelling values flat, interest rates falling and rental rates increasing, yields are improving every month. These positive cash flow suburbs will be mostly concentrated in either the inner city unit markets or the regional townships driven by the mining sector or agriculture.” Mr Lawless said.

If you are looking for a well performing investment property, an addition to your existing property portfolio or a home to live in, We guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ , or give us a call on +61 8 84631997

Aussie Expats return to Adelaide

Over the last few months, Direct Negotiations have had a substantial increase in the number of clients from the UK, Europe and Asia purchasing homes and investment properties in Adelaide.
This is represented by an increasing number of Australian Expats who are looking to the resilient Adelaide market for investment and/or the next logical career move.

Low interest rates, stronger finance sector and job market, palleatable exchange rates and a First Home Owner Grant of up to $25,000 - not to mention the sun is shining!

There are a record number of Aussies leaving London to return home to Australia - 2700 individuals per month.

The global credit crisis has had at least one positive spin-off. The crisis is driving expatriate Australians home, pushing up interest in property in the resilient South Australia/Adelaide market. The demand for property buyers agents from expats had especially escalated in recent weeks.
There is strong interest from expatriate Australians, many of them banking and finance professionals, who are looking to return home to escape the credit crunch in places like London and Singapore. They want to secure property upon their return or even before they come back.

If you are considering purchasing property in Adelaide, your first point of contact should be http://www.directnegotiations.com.au/ Our team of buyer's advocates will take the time to understand your individual needs in order to find the right property to suit your requirements. We are business people ourselves, so we understand that different people have different needs. We can organise finance, property search , negotiation , conveyance/property settlement and even placement of tenants to provide income for investors. First Home buyers can take advantage of our preferred pricing and have (FHOG) money left in the bank after their purchase. We guarantee to save you money on your next real estate purchase.
Go to the website, or give us a call on +61 8 84631997

Keeping it real - Adelaide property prices.

This month we have seen quite an increase in first home buyer activity in the Adelaide market. It makes sense. There is a good supply of stock- good entry level homes, that have been on the market and overstayed the anticipated duration of their marketing campaigns initiated before our 2% interest rate decrease and then suffered a long wait while the global financial instability was being reported.
The Adelaide market has enjoyed 16-18% growth 2007-2008. The market has levelled in recent months, which means it is an excellent time for a first home owner to buy quality property and enter the market. The government has put a time limit to their FHOG increase, so we expect to see strong activity and competition in this sector after Jan-Feb if buyers are to settle their purchases in time.
Not every house is going to be a good, long term investment and it is essential to identify several aspects that determine value in today’s market. Times have changed.
Properties in the $200k-upper $300’s will hold their values in the medium term. Why? The government is injecting funds in order to boost first home ownership in a tough market. If they buy well, they could, subject to serviceability, purchase their first home using the government’s recent windfall, and have money left over after purchasing costs. Effectively this is real estate, “no money down”...but you must buy well.
We have recently been purchasing quality properties in the $400 – $700K at very good prices. The properties being sold in this price range are typically heavily mortgaged, so there are pressures to retain as much equity as possible for the vendors. Negotiations are taking longer and must be handled carefully in order to buy these homes well.
The $950k- $1.2 million is where there is room for price reduction. The pressure is on. Owners here are exposed to the stock market, SME’s and the govt is taking more rather than handing is over as in the case of the First Home buyer category.
You make your money in real estate when you Buy as opposed to when you Sell. If you are looking for a well performing investment property, an addition to your existing property portfolio or a home to live in, We guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ , or give us a call on +61 8 84631997

If you haven't purchased a house before... all your Christmas's have come at once.

On 14 October 2008, the Australian Government announced that it was introducing the First Home Owners Boost, which together with the current $7,000 First Home Owner Grant (“FHOG”) will provide first home buyers with up to $21,000 on houses purchased before 30 June 2009.
The Boost applies to contracts entered into on or after 14 October 2008 and will leverage off the administration of the current FHOG scheme (Noting that some details are yet to be finalised with the Commonwealth).
The First Home Owners Boost will provide an additional $7,000 to first home buyers purchasing an established home before the end of June 2009. First home buyers purchasing a newly-constructed home will receive an additional $14,000 on contracts signed before the end of June 2009.
Time limits will apply on the building and completion of the newly-constructed home in order for first home buyers to qualify for the First Home Owners Boost. A newly-constructed home means a property that has never been sold by the builder/vendor, or been occupied as a residence by a tenant or other occupant. The purchaser must have proof, such as a statement from the vendor or other evidence, that the property meets these requirements for them to be eligible for the higher level of the First Home Owners Boost.
The FHOG eligibility criteria are generally that:
the applicant be a natural person;
the applicant be at least 18;
the applicant be an Australian citizen or permanent resident;
the applicant or their spouse must not have received an earlier grant;
the applicant or their spouse must not have had a prior interest in residential property;
the applicant must occupy the home to which the application relates as the applicant’s principal place of residence for a continuous period of at least 6 months (or a shorter period approved by the Commissioner) commencing within 12 months of completion of the eligible transaction (or within a longer period approved by the Commissioner).
If you are looking for a well performing investment property, an addition to your existing property portfolio or a home to live in, We guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ , or give us a call on +61 8 84631997

South Australian major projects and investment opportunities

South Australia has traditionally enjoyed steady growth and the indicators tell us that this will continue with our mining, exploration, defence contracts as well as unprecedented skilled immigration levels.
South Australia is currently undergoing the largest injection of funds and infrastructure since its founding history.
Adelaide, South Australia is Australia’s least costly place to set up and do business, and has been rated as one of the world's most cost-competitive locations for aerospace.
South Australia supports many complementary aviation/defence projects, including $8 billion Air Warfare Destroyer Contract ;10-year $1 billion deal to maintain and upgrade the AP-3C Orion aircraft fleet; multi-billion Collins class submarine through-life support contract; relocation of Australia’s new Mechanised Battalion Group to Adelaide, (capital construction commencing in late 2008)
South Australia is a key minerals supplier, with almost 40% of the world’s known recoverable uranium reserves and significant volumes of copper, gold and silver. Oxiana’s Prominent Hill project ;Iluka Resources' Jacinth/Ambrosia Heavy Mineral Sands project; Terramin Australia’s Angas Zinc project ; Uranium One’s Honeymoon uranium mine; Exco Resources’ White Dam gold mine

Adelaide residential rental yields above 6% in select areas.

Adelaide and South Australian real estate has again shown resilience in a tough economic climate.
If you are looking for reassurance, here are 5 solid reasons that Adelaide has again been the top performer for property investors.

1. Over the last 120 years property prices have risen on average 10% per year -despite wars, droughts, Asian meltdowns, 20% interest rates in the late 80’s, the recession we had to have etc. On a $300,000 property compounded at 10% a year the value the property would double in just 7 years that’s $42857 a year -more than some people get paid at their full time job.

2. Supply of residential housing in Australia is at an all time low, down from 17000 dwellings a month to 13000 dwellings per month and continuing to fall, with no foreseeable supply meeting demand according to the HIA (housing industry of Australia) . The calculated total undersupply right now 190,000 homes!

3. Adelaide had its biggest net population increase last year and is on track for an even bigger increase this year! People need somewhere to live!

4. Interest rates are coming down fast - which is great because…

5. Rents are going up fast - with rates coming down and rents going up there are some amazing rental yields in selected areas!

If you are looking for a well performing investment property, an addition to your existing property portfolio or a home to live in, We guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ , or give us a call on +61 8 84631997