Greetings one and all,
Time to hunker down for another Byron Bay winter.
I just installed a wood burner heater for it. Having fun foraging for wood and the primeval act of lighting a fire when the sun goes down. My 5 yr old daughter came home school and had a tantrum when she saw it and complained that Santa would never be able to fit down that skinny chimney. You don't want to miss out on presents because of faulty appliances.
Transit of Venus
This Wednesday the 6th of June is the Transit of Venus across the sun which happens every century or so. You cannot see it without the right equipment as it happens during the day and is just a black spot against the sun. Australians should have an affinity with the Transit of Venus as it is what bought Captain Cook to the South Pacific before sailing up the East Coast of Oz. There will be a free telescope with the right filtering equipment set up in Brunswick Heads Apex Park between 1 and 3 PM on Wednesday for anyone wanting to see it.
The smart money predicts the Reserve Bank Of Australia will announce no rate rise for June. However many pundits are expecting further rate decreases before the end of the year. Stay tuned!
Last month, the RBA reduced interest rates by a full .5% bringing the cash rate to 4.25%. This is historically low for Australia. The major banks have now managed to uncouple themselves from the RBA fluctuations and are setting their own rates which however is not historically uncommon. It has only been recently that we have begun to expect the banks to stay in line with the RBA announcements.
Just to keep score: Westpac dropped rates by .35%, NAB .32%, CBA .38% and ANZ .37%.
What to do with the cash - Part 1
What to do with the extra bit of cash? Loan market have done a survery and found that 57% intend to plow it back into their mortgage and reduce their principle, 21% intend to save it while 20% intend to refinance. Contact me anytime if you would like to have your present mortgage looked at to see if we can find you a better deal. It is sometimes worthwhile to shop around with the flexibility in the market at present.
What to do with the cash - Part 2.
Facebook launched on the stock exchange last month with $38 USD share price. The price has fallen back a bit since then, but still successful enough to nett the founder, Mark Zukkerburg, around $19B. It also made nearly 1000 new overnight millionaires in Silicon Valley. This was due to Facebook preferring to pay many of their employees in stock options during their development phase. The problem for Facebook will now be after October when many of those options become redeemable and scores of mid level managers and engineers fly off to go sailing, skiiing, play video games or whatever else cashed up tech heads like to do.
Buy property with a friend
If you cannot stretch your finances enough to buy a property on your own, why not buy with a friend or relative? The trend for buying property as "Tenants in Common' is on the rise. Traditionally couples buy a house as "joint tenants" which means if one partner dies the property immediately reverts to the other partner. With Tenants in Common the person's share is dealt with as instructed in their will. Of course, extra legal agreements are required to take care of various contingencies like one wanting to sell, one party not being able to cover the agreed payments, etc.
Local agents - doing well!
Local agent Graham Dunn from Byron Property Sales has had a good run. Recent sales in the top end of the market may indicate that properties with a few zeros on the price may cease being in decline. Last month he oversaw the sale of Watermark at Wategos for $9M, Lennox Heads home for $2.75M, 440 Bangalow Road for $4.5M, Childe St Bilongil for $2.9M. Graham told me he has not seen the enquiry level for top end properties this strong in over 5 years.
The other top end local agency Unique Estates has won the best Australian agency award at the International Property Awards Asia Pacific in Malaysia. They also won a gong for marketing and one for their website. Principal Nicloette Van Wijngaarden also said she has had a few good top end sales as well. Well known local agent Matt Towner is now managing Unique's Sydney branch.
Positive but Patchy
Other agents I talk to are also seeing a pick up in sales. Similar to my clients this year, recent buyers are betting we are the bottom of the market. Most are cash purchasers who have decided that quality real estate is the better investment choice at the moment. The share market is obviously wobbly and term deposits, when you detract inflation, is not much. Since you make money in property when you buy not when you sell, buying into this deflated market is safe bet even accepting that capital gains will be soft for a few years at least.
Other indicators are patchy though. A contradiction I noticed is a recent report from Australian Bureau of Statistics that home loan applications lifted in March. There were 3.5% more mortgages written in march, 10% higher than march 2011. However new home construction starts are down in April. Stop, start, stop, start is the prevailing mood. The general consenscus is that prices in our area are now levelling after RP Data reporting a 17.6% drop in Byron Bay house prices in the year to March 2012.
Also contradictory are Sydney and Melbourne prices for May. After slim rises for the first 3 months of the year, they slipped 2% and 2.8% respectively in May. The prestige end of the market was worst dropping 6.4%. maybe some of those sellers are taking a hit and moving here to Byron Town.
Hot property update
Just a few interesting buys that I am currently watching:
Suffolk Park - large 5 bed 4 bath home split into 2 residences. Rent the lot of positive cash flow or live in one and holiday let one for small business - $895,000 with approx $1100 a wekk rental yeild.
Suffolk Park - please, please lord send me a client for beach front suffolk park. I want to get someone into a property at half price.
Byron Bay - Auctioning in June. Premium location on Byron hill with some development potential ( 3 townn houses) on 1500 M2 block. Only the brave and adventurous should apply.
Ocean Shores - Brand new 2 Bedroom home in quite, leafy aspect - $365,000.
Mullumbimby - Brand new 3 bed 2 bath duplex off the plan in Tuckaroo - $430,000's
Mullumbimby Business - gourmet food production, equipment, distribuition and market outlet - POA.
Would you like to ? Not interested any more?
Byron Property Search
8/42 Bilin Road, Byron Bay, NSW 2481Phone (+61) 02 6684 1744
Mobile (+61) 0428 555 501
Michael Murray02 6684 17440428 555 501
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