Deceptive, unscrupulous techniques in property marketing
PUBLISHED: 6 HOURS 9 MINUTES AGO | UPDATE: 3 HOURS 9 MINUTES AGO
Deceptive, unscrupulous techniques in property marketing
Consumer Protection in WA prosecuted a case where a Bunbury property was advertised for “between $1.5 million and $2.5 million” though the owner had simply said he would not accept an offer below $2.2 million. Photo: Arsineh Houspian
JONATHAN BARRETT
Asking prices for houses in the Pilbara town of Port Hedland have dropped 40 per cent, but a local agent tells investors “demand for new dwellings will continue unabated”.
In Collins Street, Melbourne, a commercial agent reckons buying the office he is selling represents the “best investment” in the city.
Both statements are probably untrue, but are they illegal?
Stephen Meagher, from the West Australian government’s Consumer Protection department, said the law discerned between subjective statements and those that could be quantified.
This means that the local fast-food shop advertising “the best hamburger in Brisbane” would get away with it because the brag is subjective and almost impossible to test. The legal term for such a subjective statement is “puffery”.
Similarly, a real estate agent that claims to be “Sydney’s best” would probably be safe under the Australian Consumer Law. But if the agent said it was the “number one selling agent”, then it had made a claim that could be quantified, and it would need to back it up with evidence.
Consumer advocate Neil Jenman said he was amazed at some of the mischief he saw in the property sector. “My daughter went to a home open, where the advertising pictures had showed it had a brushwood fence. There was no brushwood fence. It had been Photoshopped,” he said.
While there appear to be clear examples of agents making untrue – and quantifiable – claims, prosecution isn’t necessarily straightforward.
Consumer Protection in WA prosecuted a case where a Bunbury property was advertised for between $1.5 million and $2.5 million, even though the owner had said he would not accept an offer below $2.2 million. The prosecution failed because it didn’t prove the target audience – buyers – were misled.
So, do the Port Hedland and Melbourne claims break consumer law? While the Collins Street “best investment” brag is pretty safe, given its subjective tone, there are some interesting quantifiable claims in Port Hedland, made by the agent, Crawford Property Group.
Not only would demand in the former boom town apparently continue “unabated”, but Crawford Property Group claimed to have “exclusive knowledge” on BHP Billiton; a global miner that is required to disclose market sensitive information to the sharemarket.
Crawford founder Ryan Crawford said the property report was written by an external writer in 2012 who probably took it too far. “I wouldn’t say we falsely made those claims but some of the statements were an overreach. We don’t have exclusive knowledge about BHP.”
Mr Crawford said the report should never have been left on the website, given the company had more updated market material; and that it would be rectified.
Many investors in the iron ore export hub were burnt after 2012, as the end of the mining investment boom and related projects, and the fall in iron ore spot price, dramatically decreased demand.
SQM Research’s Louis Christopher said in a research note on Port Hedland that: “Essentially, asking prices for houses have fallen from $1,500,000 down to $900,000. That is a 40 per cent plummet”.
“Naturally, that has been an appalling result for existing property investors,” he said.
“The rental situation has also been just as bad. Rents for houses briefly peaked at $3200 a week. They are now down to $1550 a week.”
The Australian Financial Review
BY JONATHAN BARRETT
Jonathan Barrett
Jonathan is our Perth bureau chief, covering all state issues.
Investors fuel home lending growth: ABS
THE AUSTRALIAN NOVEMBER 10, 2014 2:06PM
Kylar Loussikian
Journalist
Sydney
PROPERTY investors continue to drive a rise in home lending, recording more than double the growth in loans taken out by owner-occupiers, according to seasonally-adjusted Australian Bureau of Statistics figures.
The number of loans made to owner-occupiers in September dipped marginally, although the value of loans nudged upwards to $16.9 billion.
Seasonally adjusted, total loans for September rose 2.3 per cent to hit $28.87bn, with a 1.4 per cent increase in owner-occupier lending outpaced by a 3.7 per cent rise in investor loans.
First home buyer loans as a share of total loans remain at a record low of 7 per cent.
Investor activity in established homes has been the “clear standout”, according to investment bank UBS, up a cumulative 83 per cent in three years.
“(These loans) continue to increase sharply towards half of all home loans, something the Reserve Bank has characterised as becoming unbalanced,” the UBS analysts noted.
The RBA in late September that the composition of housing and mortgage markets was becoming unbalanced and said it was investors rather than first home buyers who were driving prices higher.
At the time, the bank declared it was talking to other regulators about “further steps” to tighten bank lending standards, including reducing the amount of available credit.
“In terms of what the Reserve Bank can do to blunt that investor market without seeing a substantial pullback in the housing market is an ongoing question,” said CommSec economist Savanth Sebastian.
“You’ve got such uncertainty around business investment, so you need the housing sector to drive growth.”
JP Morgan economist Tom Kennedy said there doesn’t seem to be any easing in the rise in investment housing, which will be a concern for the RBA.
“That really just adds to the concern that the RBA has voiced that activity is a lot more imbalanced right now than it has been in the past and that could be problematic,” he said.
However, Mr Kennedy doesn’t believe reforms to lending standards, due to be announced by the end of the year, will be too drastic.
“We do think it’s going to be more of a light touch approach in terms of increasing serviceability buffers or things like that,” he said.
With AAP
$A drop attracts Chinese property buyers
PUBLISHED: 0 HOUR 25 MINUTE AGO | UPDATE: 0 HOUR 0 MINUTE AGO
$A drop attracts Chinese property buyers
Many Chinese buyers are capitalising on foreign currency moves to buy higher quality apartments than what they originally set out to buy, CBRE project marketing director Peter Li said. Photo: Arsineh Houspian
SAMANTHA HUTCHINSON
Investors drive home lending growth
Apartment approval run slows
The sliding Aussie dollar has triggered a new wave of interest from Chinese property buyers, with the recent 9 per cent fall in the currency making Australian property up to one-third cheaper.
Compass Global Markets chief executive officer Andrew Su said in recent weeks he has received higher levels of inquiry from Chinese clients looking to make foreign exchange transactions in a bid to buy property.
“For many of these overseas buyers, currency moves in the past six months have made home purchases about one-third cheaper,” he said.
“And it’s not like property here is cheap, so it makes a significant difference to their buying plans.”
Around 18 months ago, Mr Su reported an element of “urgency” in the currency conversion plans of Chinese buyers which has eased during the year, as a fluctuating currency made buyers more choosy about when they wanted to make the exchange.
But a near 9 per cent slide in the Australian currency since the middle of September has again ratcheted up a sense of immediacy in the forward buying plans for a number of investors, Mr Su said.
“They’re in touch, and they tell me property is looking a lot more affordable now.”
The Australian dollar has weakened almost 9 per cent against the US dollar since September as the US economy strengthens.
The Aussie dollar sank to a four and a half year low in early November, almost touching US85.5¢. On Monday, it was trading stronger at US86.7¢.
Many Chinese are capitalising on foreign currency moves to buy higher quality apartments than what they originally set out to buy, CBRE project marketing director Peter Li said.
“I think the number of people in the market will stay the same, but they can now afford a higher-end product,” Mr Li said. “Before they were looking at homes that cost around $600,000, but now we’re getting more demand for homes and apartments that start around $2 million.”
Overseas purchasers buying property in the past three months have been particularly fortunate with their timing, Mr Li said, because the currency has fallen faster than prices have appreciated.
“If you’re looking at currency movements, apartments are actually a lot cheaper this year than they were last year,” he said.
Dealers at foreign exchange group OzForex have observed similar trends, according to chief currency and payment strategist Jim Vrondas.
“People wanting to bring money in for offshore have been waiting for the right time to bring it here, and for the exchange rate to get better has allowed people to pay more for property,” Mr Vrondas said.
“They’re picking up an extra five per cent on the exchange rate, and its another five per cent to spend on a property.”
Property transactions account for the bulk of the foreign exchange deals OzForex makes every day. In Australia, the group’s turnover on property-related transactions is six times the size of the second-most popular reason.
Melbourne-based agent Jock Langley believes the latest currency movements have been more influential in stoking demand from expats looking to return to Australia than for Chinese buyers looking for a first home.
Mr Langley heads up Abercromby’s, a boutique agency dealing in prestige property in and around Melbourne’s eastern suburbs or Toorak and Hawthorn and bayside areas, including Brighton and Sandringham.
Expats now make up more than 25 per cent of Abercromby’s client book, which is a 15 per cent increase in the past three months, Mr Langley said.
Chinese buyers account for around 10 per cent of the transactions made by the group, a figure that has been stable for the past 12 months.
“When it comes to Chinese buyers, I wouldn’t say there has been any rapid increase, its just a growing presence in the market that started more than 12 months ago,” Mr Langley said.
“But to be sure, the latest falls have helped them a lot. And the free trade agreement will also help, because it will expedite the transaction process from these really long-winded deals that can longer than the usual 60-day settlement.”
The Australian Financial Review
Prestige property pumped, but pundits ponder where next?
THE AUSTRALIAN NOVEMBER 08, 2014 12:00AM
Ben Collier
Estate agent Ben Collier with client Elizabeth Wadsworth, pictured at Elizabeth’s home in Woollahra that is on the market. Picture: Britta Campion Source: News Corp Australia
THE prestige housing market will finish the year strongly as agents report record auctions and turnover in the lead up to Christmas, but many question whether the heaving city real estate markets will start turning next year.
In Brisbane, agent John Johnston of Johnston Dixon says next year will be tougher because of potential interest rate rises while, in Sydney, Bill Bridges of Ballard Property says buyers are banking on the prestige market softening.
AMP Capital chief economist Shane Oliver said Sydney’s prestige market could slow the most of all the capitals because of its strong growth this year.
But Ray White chairman Brian White was confident the prestige market would continue to fire, reflecting the strength of the economy. “Overall, it’s been a pretty bloody good year for everyone,” Mr White said, noting the group sold a record $3.5 billion worth of property in Australia and New Zealand last month.
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Artist Elizabeth Wadsworth is auctioning her Queen Street, Woollahra, residence in Sydney’s wealthy eastern suburbs on November 29 and reckons the prestige market will continue to prosper. Price expectations are for more than $8m, through McGrath Estate Agents. Wadsworth, who is downsizing and plans to remain in the area, reckons there is more confidence in the prestige market than in previous years. “I just think the economy is better and there is a lot more confidence in the market, ” she said
McGrath Estate Agents chief executive John McGrath said the agency’s offices reported an 89 per cent clearance rate for properties at more than $3m last month, up from 59 per cent for the previous corresponding period. In Sydney, prestige suburbs such as Edgecliff and Hunters Hill reported 38 per cent and 22 per cent increases, respectively, in sales last month.
Ray White’s Double Bay office in Sydney and its New Farm, Surfers Paradise and Ascot offices in Queensland’s more expensive areas were among the agency’s top performers last month. “Never before have we had so many offices achieve $40m in sales,” Mr White said.
Housing market loses some of its heat as supply increases
THE AUSTRALIAN NOVEMBER 10, 2014 12:00AM
Gina Rushton
Journalist
Sydney
AUCTION clearance rates have slowed across the country as listing numbers grow and housing supply threatens to overtake demand.
Sydney experienced a clearance rate of 75.5 per cent — its lowest since the first week of July — while Melbourne recorded 71.6 per cent at the weekend, Australian Property Monitors said.
RP Data recorded a clearance rate of 45 per cent in Brisbane, 61.3 per cent in Adelaide, 50.6 per cent in Canberra and 56.3 per cent in Perth.
“After a fortnight of mild improvement, the ongoing high volumes are clearly having an impact, with a lower clearance rate this week,” RP Data’s Robert Larocca said.
It wasn’t the prestige suburbs keeping the market afloat.
Sydney’s inner-city and eastern suburbs produced “underwhelming” clearance rates of less than 70 per cent at the weekend despite their price growth and popularity, APM chief economist Andrew Wilson said. “The budget suburbs in Sydney’s west and Melbourne’s southeast recorded the best rates,” he said.
Sydney can expect a record November, with more than 5000 auctions expected to be held this month — the highest number ever recorded, according to APM.
Ask the Aussie expats whether they are going to buy. It's not just the mainland Chinese that benefits from weakening aud.
The inner west recorded a clearance rate of 74.44 per cent. Of the 90 properties on the market, 54 sold at auction, 12 sold prior, one sold after, and 17 were passed in while six were withdrawn.
Buyers queue up to buy off-the-plan apartments at the sales launch of the Harbourfront Balmain development.
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In Balmain, buyers sacrificed a sleep-in on Saturday morning to queue for up for a chance to snap up a home at a new development.
Eighty out of 121 off-the-plan residences at TOGA’s Harbourfront Balmain were sold at the sales launch on Saturday for a total of more than $100 million.
Furious selling and selection takes place inside the sales suite as the first buyers buy
Mr Fabrizio Perilli, CEO of TOGA Development and Construction, said the sales launch was a success. .
“Over 200 groups visited the display suite over the course of the day, resulting in the sale of over 65 per cent of available apartment stock,” Mr Perilli said.
Harbourfront Balmain is located in one of the last remaining waterfront precincts.
Buyers to scramble for new waterfront homes
The development will house 121 apartments in eight low-rise buildings.
Located at one of the last undeveloped sites on Sydney Harbour, the 12,375sq m development will house eight low-level buildings consisting of one, two and three-bedroom apartments and nine three-bedroom terraces.
Prices of the homes ranged from $760,000 to $2.7 million.
The development will include a gymnasium, an outdoor swimming pool, a large internal oasis garden, a 150m harbour frontage and public walkway.
http://www.dailytelegraph.com.au/newsloc...7118351556
Check out the aussies (white and asians ethnic)
Seems like Australian properties are still doing well, people queuing to
Buy like in singapore.
My friend who has a small unit in flinders street, Melbourne, not able to lease or sell... So resale may be Problem but newly launch units still popular.
Hmm how small? So far Melbourne cbd is quite ok despite over supply concerns. Very recent leases went for 4% yield
House prices up 1.5pc in September quarter: ABS
AAP NOVEMBER 11, 2014 2:41PM
CAPITAL city house prices are coming off the boil, but Sydney continues to boom.
Sydney property prices jumped almost 15 per cent in the year to September, according to new figures from the Australian Bureau of Statistics.
The gains in the harbour city were double those in Melbourne and Brisbane, and six times those in Canberra.
Capital city house prices overall rose nine per cent in the year, having slowed from the 10 per cent annual rise in the June quarter.
Prices rose 1.5 per cent in the September quarter, compared with 1.9 per cent in the previous three months.
JP Morgan economist Tom Kennedy said national house prices were slowing to more sustainable levels.
“The growth we saw last year can’t be sustained and that could lead to problems if it did,” he said.
“The fact that we’ve slowed down is probably a good thing and we think it’ll probably slow down a little more.”
Perth was the only capital city to experience price falls in the quarter, down 0.1 per cent.
Easing mining investment has dampened demand for labour, slowing population growth and, therefore, house price growth, Mr Kennedy said.
Housing Industry Association senior economist Shane Garrett said national home price growth was easing to a more sustainable rate, as more supply came into the market.
“The annual rate of home price growth nationally is back in single figures for the first time in a year,” he said.
“At the same time, new home building is stretching to its busiest year in two decades. This is no coincidence.”
Commonwealth Bank senior economist Michael Workman said an increase in housing supply over the next year would slow house price growth in Sydney, Melbourne and Brisbane.
“It’s quite clear in most of the data that it’s the eastern seaboard where most of the activity, price wise, is occurring,” Mr Workman said.
“It’s also where most of the new building is underway and there’s a lot of new stock coming over the next year, so there will be this change in the market that will dampen house price growth over the coming year.
“By this time next year, the numbers will be quite low compared to where they are right now.”
He said some parts of the housing market, such as the Gold Coast, would benefit as the lower Australian dollar would eventually boost tourism.
CAPITAL CITY HOUSE PRICES IN THE YEAR TO SEPTEMBER:
* Sydney — rose 14.6pc
* Melbourne — rose 6.9pc
* Perth — rose 6.7pc
* Brisbane — rose 5.6pc
* Adelaide — rose 3.7pc
* Hobart — rose 4.3pc
* Darwin — rose 3.4pc
* Canberra — rose 2.4pc
AAP