Thursday, December 17, 2009

Getting into the Christmas Spirit!

The holidays are coming! Yay!! I know I need one!

It has been a rollacoaster year and some R&R is well deserved!
For some out there, Christmas is a lonely and difficult time and I think we should all do our part to help our fellow Australians in a period that should be a happy time. For the last two weeks, Santa came to Balmain and sat his chair at Loyalty Square for photos. Myself and the team at Sarah Lorden helped by becoming honorary elves for the day, giving out candy canes and collecting food and money for the Salvation Army. It was a great day where the kind citizens of Balmain helped raise over $500 in donations plus many boxes of food. Santa had his hands full too with over 140 children (and some adults!) posing for photographs.

I had a great time, skipping around in tight elf outfit that revealed a little bit too much, passing candy canes out to shoppers!

What am I doing over the break?
I will be spending Christmas with my family up at the Blue Mountains where I plan to get some awesome gifts (mum, if you're reading this, take note!)
I will also be off work for the month of January, indulging in some of my passions in outdoor adventure. On the cards is a summer climb of Mount Kosciusko, caving and canyoning in Jenolan Caves and a spot of white water rafting. I will be returning after Australia Day full of more stories and interesting info about Balmain and what I got up to in the break.

Next year, I will also be starting a new position within Sarah Lorden Real Estate as the assistant to Cherry Owen and if you are thinking of selling in 2010 you should make sure that you call Cherry or myself for an appraisal. We, as a team, will be a tour-de-force next year and it would be an honor to have you benefit from our future success!

I am wishing you good luck and success in 2010. In Chinese years, it will be the year of the Tiger which means it will be a very lucky and engaging year. The tiger protects us from dangers such as fire and burglary and because the tiger is a wanderer, it will be lucky in 2010 to decorate your home with pictures and artifacts of your travels and adventures.

Merry Christmas and a Happy New Year and I will see you in 2010!

Wednesday, December 9, 2009

Has the first home buyers grant really been beneficial to buyers?

It's no secret that the rite of passage of owning your first home in Sydney has become a near impossibility. A few years ago, the government created the first home buyers grant as an effort to encourage young buyers into the market. Initially, the feedback was positive but the results were not as progressive as the government had hoped. Last year, the government added an additional incentive - another $7000 to increase more first home buyers to the market. There have been a couple of positives and negatives with this move.

In 2008, the real estate market was at a lull. It was a period where stock was not only low, but so was selling. The causes of this have been attributed to the GFC and a general consensus that properties were over-valued in the Sydney market. There were complaints from renters too - rental vacancy rates were as low as 1% in many areas and the cost of renting increased by an estimated 20% in just 2 years. It was not only expensive to buy, but for many it was also becoming too expensive to rent. I remember as a leasing officer, one open house I held in Annandale - we had nearly 81 people through in a half an hour period and a line out the front door that went to the end of the street. Crazy times! The government's initiative to boost the first home buyers grant gave many buyers the opportunity to buy their first home. This was a good thing, rental rates eased, rental prices plateaued and coinciding with the record low interest rates, properties were beginning to sell again.

In 2009, the $14,000 grant and the record low interest rates made it one of the best times to buy in 40 years and the market quickly started to flood with buyers. However market stock did not grow very much in 2009. It took a while for vendors to let go of their assets in the wake of the GFC. So what began to happen was that the low stock, and high influx of buyers, fuelled by the first home buyers grant, resulted in housing prices starting to increase. It was the quickest market turn around that I had ever seen. It started as the best time to buy in nearly 40 years to suddenly switching and becoming one of the best times to sell in 40 years! Competition grew and many buyers were looking for a bargain gem, but so were a hundred other buyers in the same price range. Properties were going on the market with little or no competition and, because cut-off dates had been set for the grants to end in September and December, it enticed a flurry of furious bidding at auction pushing the housing prices up.

I can see many of you rolling your eyes with you're own experiences at auctions like these. You've paid for a building and pest inspection, you've worked out the finances and you turn up on the day ready to bid only to have someone else open the bidding at a ludicrously high price. At the end of the auction the property has sold for $70,000 more than what you were willing to pay for it.
I have heard may stories like this in the past year. I had one buyer say to me: "What is the point of having a $14,000 government grant when you buy the house for $70,000 more than it's value?" The answer: None.
The high house prices have knocked many buyers back to square 1 - unable to afford a house.

So what will happen in 2010?
Well the commonwealth bonus ceases on December 31st, and the $7000 Grant will remain until June 2010. This will take quite a bit of wind out of the sails in the buyers market. There has been talk that investors would fill that gap, but it looks like many investors have seen the high prices in the market and have stayed away, waiting for cheaper times. The interest rates will continue to climb, restricting peoples ability to finance their purchases and we are now seeing more stock coming onto the market. With all of these factors coming to a head in the first half of 2010, one can estimate that a probable scenario is a slowing of the market. The bubble may well just burst in a few months and we could start to see housing prices plateau in Sydney. Will they go down? If they fall, they won't fall by much, but there is a good chance that we are going to soon see an end to record sales prices in many areas.

So what should you do?
Stay informed and keep your eyes open. There are many other commentators out there who would disagree with my prediction, and they could be right, if I had a crystal ball I'd be out buying a lotto ticket right now! But the signs are pointing to a climax when the market will begin to turn and I believe it will be in 2010.
But back to the inital question: Has the First Home Buyers Grant really been beneficial to buyers? There can be no doubt that it did help those buyers who moved quickly to secure a property before the crowds and while prices were low. But for those who entered the market later, they found that the grant had too broad an appeal and buyers were wasting their money on building and pest inspections, loosing at auctions and leaving with nothing. It became a frustrating and upsetting process with little reward.

I welcome any comments or opinions on this article, including those of my professional peers.

Thursday, December 3, 2009

The Origins of Darling Street

Everyone knows Balmain's Darling Street. It is the main life-line to and from the peninsular and is the most important and central road in the area. In this week's blog, we will explore the origins of Balmain's most important street.

The first land sale in Balmain took place in 1836. At that time, just 3 streets were marked on the peninsular - Nicholson St, Johnston St and Darling St. (a fifty foot dirt track leading from Balmain Road to where the wharf now stands). The origins of the dirt road that became Darling Street, was originally used as a thoroug fare by off duty soldiers from the prison on Cockatoo Island, from Birchgrove to Peacock Point, where they would embark on a ship into Sydney Cove. This worn track brought settlers whom settled, traded and enjoyed the security of the patrolling soldiers in the area.

Originally named after Sir Ralph Darling, Governor of New South Wales from 1824-1831, Darling Street went through a number of other name changes such as "Great Ferry Road," "Main Ferry Road", and "High Street". Before the trams, there were two Darling Streets in Balmain. From the ferry wharf to Loyalty Square (where the Woolworths now stands) the road was known as Darling Street then it forked at the Unity Hotel into Upper Darling Road - which is the path Darling Street today follows into Rozelle; and Lower Darling Road- what today is now known as Beattie Street.

Early settlers were attracted to settlement on Darling Street because it was "on a lovely elevation which partakes of the genial influence of the north-east winds, and the climate is mild and salubrious" - words like genial and salubrious are lost in today's real estate vocab which would probably read more like: "a rare opportunity to secure a prize piece of land with panoramic coastal views, gently kissed by welcoming north-east winds, and situated in a sunny and clean position. Don't miss this opportunity!"

Wow, times have changed!
Darling Street became one of the most progressive and popular streets in Sydney during the late 19th Century. In 1875, it was aglow with some of Sydney's first gas lamps and the shopping on Darling St was so popular that "you might imagine yourself in the city brilliantly lighted are the shops and stores..." It's popularity continued when trams were installed to carry commuters from the shopping district to the wharf in 1882.

To this day, Darling Street remains the most important street in Balmain. It is home to much of Balmain's history from the first wharf built on the peninsular, to the churches of St. Mary's Anglican and St. Thomas' Anglican to Balmain's first police lock-up at the Balmain Watch House.

A Pictorial History of Balmain to Glebe J.Lawrence & C. Warne 1995
Streets, Lanes and Places 1836-2005 - Balmain Association Inc 1994