Sydney, Melbourne auction clearance rate slips ahead of coronavirus auction ban

Post to Facebook on 8/4/2020 10:57 AM
Commenting on “Sydney, Melbourne auction clearance rate slips ahead of coronavirus auction ban”
https://www.domain.com.au/news/sydney-melbourne-auction-clearance-rate-slips-ahead-of-coronavirus-auction-ban-944390/

Unless you are buying an additional property, you must remember NOT to buy a property before you have sold an existing one especially it is for your own use. You will have a big cash flow problem!

This is what many agents don't tell you, but you should know why some vendors are so keen to lower the price just before the social distancing order and banning of public auction in the open and open-for-inspection become effective on Wednesday mid-night.

If the property is not sold, the panic vendors will have no money to settle the one they have bought. They may incur huge financial loss, because the other vendors may be in the same position - bought before having theirs sold.

I am not a gambler, especially when dealing with property investment. Most of us have enough stress daily, and we do not need to add any more to the existing. That's is why I am advising people to have enough money reserved for paying two months worth of mortgage. This money should not be used for any other purpose, except for emergency situation that mortgage payment must be met but income is not forthcoming.

This coronavirus pandemic is a painful reminder that "never say never". You may think that you are healthy, and earn a good income, but even if you are in a senior management or run a successful, your job and business may not be around when this disaster ended. This is real, and I am not scaremongering.

So take care, and stay home. In the meantime, prepare for your next move.

Thank you.

Not all parts of the housing market are slowing

Post to Facebook on 26/3/2020 10:43 AM
Commenting on “Not all parts of the housing market are slowing”
https://www.theage.com.au/national/victoria/as-clare-discovered-not-all-parts-of-the-housing-market-are-slowing-20200325-p54drc.html

Having a tenant to take occupation is a great feeling, but that feeling can eventually turn sour if the tenant cannot catch up with rental payment in subsequent weeks or months.

With self-isolation or setting up home office as the reason to rent a property, I am very hesitant to pop the Champagne bottle for celebration. Many people are likely to be unemployed including those in the middle management.

If forecast by some economic experts is correct, the unemployment rate may jump to 10 to 12%, or 2 million in hard number. Sadly, employment history is not iron-clad guarantee that the tenant can fulfill future rental payment commitment.

I have warned many times that your investment property must produce positive return as soon as possible. This is a testing time for many tenants, and therefore the flow on effect will apply to the landlords.

Thank you for reading.

Real estate auctions banned from midnight Wednesday in coronavirus crackdown

Post to Facebook on 25/3/2020 8:33 AM
Commenting on “Real estate auctions banned from midnight Wednesday in coronavirus crackdown”
https://www.domain.com.au/news/real-estate-auctions-banned-from-midnight-wednesday-in-coronavirus-crackdown-943590/

Just as I predicted - no auction on site or in a room, and also no open-for-inspection as well. It does not matter even if social distancing is adhered to.

In order to remove any ambiguity, the word property hereafter will refer to a building for dwelling. I am not confident and brave enough to buy a property based on virtual tour, neither shall I participate in an online auction. There are too many things and unknowns need to be considered.

In a way, a building is a “living” structure. When you walk into a house, you do have certain feeling whether you like it or not. This has nothing to do with the architectural design or the arrangement of furniture. You may have that love at first sight affinity.

Buying online does not give you that feel. You are buying just for the look presented in digital format, which can be distorted or doctored easily. In a way, it is similar to “buying” a mail order bride from Russia, or some Asian countries.

There are scammers out there who are ready to take money from the inexperienced, unsuspecting and obviously “greedy” buyers. It happened before that Australian buyers bought New Zealand properties online only to find that the properties never existed.

At an auction, on site or indoor, you can sense whether the bidders are genuine or dummies. How does one know that a dummy bidder is not among the genuine ones to push up the price? In the first place, there is no way to challenge or confront the auctioneer that the advertised range is underquoted?

It is important to note that different states may have different real estate rules and regulations.

Thank you for reading. Take care.

Two million Aussies face unemployment queue

Post to Facebook on 25/3/2020 9:53 AM
Commenting on “Two million Aussies face unemployment queue”
https://www.theage.com.au/politics/federal/worst-since-1932-two-million-aussies-face-unemployment-queue-20200323-p54d14.html

This blog is originally published in SFC Coronavirus COVID-19 News & Articles

I am very vocal and I really don’t like a lot of the interviewers and interviewing techniques used by the employment agency consultants, HR representatives and potential employers.

he terminologies used are no more than jargons, and normally fairly new in the vocabulary. Unless the job seekers have just finished a management course in tertiary education, there is a Buckley’s chance that they can understand what they interviewers are talking about.

One typical example is about being a team player. Without having worked in that specific company or organisation, how does one know about it’s team dynamics, and therefore whether one can fit in.
Then there are words like hard skills and soft skills.

Some of the advertisements are just plain ridiculous and expect too much. Unfortunately, these are written just as a formality, because the position is meant for someone awaits to be promoted internally but due to organisation policies that the position has to be advertised externally.

Cities go into lockdown, and many businesses especially fashion, hospitality, entertainment, motor vehicle and tourism and all related industries will close for good. No one has ever imagined such a disaster can ever happen leading to depression.

No one knows when this pandemic will end, and how much longer can any government pour money in to support the businesses, workers who have been stood down and casual workers who could not find work to subsidise their income. Many businesses may not survive and even if there is a restart button, some businesses will take much longer to rebuild.

Those unemployed former employment consultants, HR experts and business owners will be queuing up to compete with a lot of others. These people will understand some of prejudices they had before, and how difficult is to be across am interviewing panel bombarded with questions only the quick minded can handle.

The negative impact of this disastrous pandemic on private schools is more visible than the public sector. I did challenge the usefulness of the lush green carpet grass school field, swimming pool, gymnasium, posh canteen, etc. These do not come into the equation of education system proper.

For those loyal followers of my real estate blogs, you probably have heard enough about ny asking you to save, save and save for rainy days, and never jump in to invest on negatively geared properties. I think my advice is spot on.

My prediction about the negative impact on the real estate industry has come true. Auctions and property inspection are halted during the current state of emergency and the imposition of self-distancing rule on public gathering.

After all that being said, do not get disappointed, disillusion and get yourself into a state of depression. You have a lot of spare time, and use this time wisely to self-improve yourself, not only in terms of knowledge, but also outlook in life. This is also the time to reconsider your next career path.

In one of my blogs, I explained economy will stay stagnant if money does not flow by changing hand. Until consumer confidence returns, that is when people perceive to have financial stability again, money will be saved rather than spent.

The economic recovery takes time, and you must remain strong, physically and mentally.

Thank you for reading.

Is it panic buying or panic selling?

Post to Facebook on 21/3/2020 1:21 PM
Commenting on “Is it panic buying or panic selling?”

A Facebook group member of SFC Real Estate News and Articles messaged me a news articles about people still rush to buy properties. He wondered whether it is panic buying or panic selling?

I replied it was a matter of stupidity, and explained as follows:

Most of the young buyers are financed by Mum and Dad bank. Unfortunately many of the seniors do not realise their superannuation funds and bank interests are so badly eroded that their money is dwindling.

Even high income buyers, like all those ignoring the self-isolation order, ignore the signs of doom, may not have a job to go back to in a few months time.

Paying the deposit is only the start of their nightmare.

Thank you for reading.

Australia faces being locked down suburb by suburb

Post to Facebook on 21/3/2020 12:43 AM
Commenting on “Australia faces being locked down suburb by suburb”
https://www.theage.com.au/politics/federal/australia-faces-being-locked-down-suburb-by-suburb-20200320-p54cba.html

Am I a worrier or just one of my gifts being able to think of all the worse case scenarios about what can happen if I am imprisoned in my own house one day?

I blog a lot (refer to my SFC Real Estate News and Articles) advising readers to buy landed property instead of apartment as an investment option. In fact, it is worse if one chooses to live in an apartment, even if it is a lifestyle choice.

Many downsizers choose to live in apartment because it is compact and easy to maintain. Unless it is a reasonable size apartment, the confined space may not be ideal if one is locked in and cannot get out to the open to appreciate that sense of “freedom”.

The coronavirus pandemic causes many countries to lock down, and residents are not allowed to get out of the dwelling.

In my early days, I always chose to live in a house with a backyard in own enclosed compound, no matter how small it was. Another criterion was to have additional space internally, so that I would not be moving between my room and just the kitchen. Oh yes, the kitchen must have a door, and should be as big or may be slightly smaller than a smallest bedroom in the house.

I probably will go bonkers if the suburban lockdown is to take effect. Fortunately, I have many hobbies and interest keep me going. I can also stretch my arms and legs in my garden, or when I feel like releasing my frustration of the entrapment, I can just unforgivingly pull the weeds in the garden beds or walk paths.

My home is my castle. It has protective external walls, but I do like to get out of the front door or back door from time to time to breathe in fresh air and listen to the chirping of the birds. Have I told you I have a pond full of gold fish (carp). It is so relaxing to watch them gulping down the fish pellets I throw in during their dinner time.

Thank you for reading.

Melbourne auctions: Agents won’t shake hands due to coronavirus fears, but crowds are undeterred

Commenting on “Melbourne auctions: Agents won’t shake hands due to coronavirus fears, but crowds are undeterred”
https://www.domain.com.au/news/melbourne-auctions-agents-wont-shake-hands-due-to-coronavirus-fears-but-buyers-are-undeterred-940293//

The negative impact caused by the Coronavirus as I predicted in January 26 is finally realised, and it is backed up by the report from Domain.

According to the REIV auction clearance rate records, at the start of February to end of February, the rate rose to 80%, but took a downward turn in March. I find that REIV clearance rate is normally 2% higher than Domain.

8 Feb - 80%
15 Feb - ?
22 Feb - 80%
29 Feb - 79%
7 March - 71%
14 March - 71%

Will the clearance rate continue to slide? I believe so at least for a few more weeks.

At present the real estate market does not centre on supply and demand, but overall consumer confidence.

If you are good in negotiation, and with your approved loan, your first home may be insight.

Thank you for reading.

How will the coronavirus affect the Australian property industry?

Commenting on “How will the coronavirus affect the Australian property industry?”
https://www.domain.com.au/research/how-will-the-coronavirus-impact-the-australian-property-industry-939734/

The following is a blog from my SFC Coronavirus COVID-19 News & Articles.

One bad news after another bad one. It appears the world is in the complete state of panic, and the coronavirus is on the match to infect every country without any discrimination.

World Health Organisation WHO finally declares COVID-19 is pandemic, the rich and famous people Tom Hank and wife have tested positive of the infection, Grand Prix in Melbourne cancelled, Home Affairs Minister Peter Dutton tested positive and confined in hospital, AFL games will play without fans, concerts and Comedy Festival cancelled, etc.

More schools are closed, and university / college students tested positive too.

I have been very cautious about meeting people, including family members from interstate and overseas. Many infected people are spread through clusters of family units and close friends. You cannot take for granted that the family members and close friends can be trusted - yes, you can trust them with all you like, but not for your life. You have no idea who they are in contact with, or the people that travel with them in enclosed public vehicles for hours.

When the outbreak was first announced worldwide, I made a prediction on 26 January through my FB "SFC Real estate News and Articles" group that this would have a negative impact on the real estate industry. As usual, most group members remained silent, and the post received 17 out of 152 reactions. I really wonder whether they should be in the group at all, because of their indifferent attitude, and had no interest in real estate matter.

I made the prediction based on the following reasons:

First, overseas buyers, the mainland Chinese in particular, would not be coming, or likely to be restricted to come, especially during the Chinese lunar new year golden week for China. This has a great negative impact on Australia tourism industry.

Second, all other industries would be affected, and the economy stalled. Many potential business owners might go bankrupt and employees laid off. Many business and people would default due to inability to meet their debt obligation.

Third, like Wuhan, it is a matter of time that many cities, including some in Australia, would be in lockdown, and even interstate travel could be restricted.

Fourth, large public gatherings could be banned, and that includes auctions.

All these, will affect real estate investment.

That was weeks ago, and unfortunately, all these reasons are not conjecture, but soon become reality.

Is there light at the of the tunnel soon? I doubt so, because the Australian government, which keeps saying that all actions taken are in accordance to the Chief Health Officer's advice, is not decisive enough to implement tougher testing on inbound travellers and just play the wait-and-see game.

If the Grand Prix proved to be an event that caused massive infection, the state and federal governments, the Grand Prix organisers would be up for many millions of lawsuit, because this is a case of negligence and lack the duty of care to keep the public safe from the virus.

I hope my worry is nothing more than my neurological malfunction.

Thank you for reading.