ITC was invited to a breakfast briefing about the state of the property market by Brent Courtney from McGrath Lane Cove. The featured presenter was well-known property guru John McGrath, CEO of McGrath Real Estate.
John McGrath believes property prices in Sydney and Melbourne are heading towards a peak but are “not yet at the top of the market”.
Addressing an audience of Lane Cove residents, John McGrath had reassuring words for those who thought a property bubble was about to burst. Property, like most other products, is influenced by supply and demand and McGrath believes that right now in Lane Cove (and Sydney) there is a scarcity of quality properties.
“With a seller clearance rate of 75 to 80 per cent, there is an extreme shortage of properties in some markets with pockets of oversupply in others” he says. “Real estate is everyone’s second career. Most property owners make wealth buying property.”
McGrath is quick to emphasize that property investment is not for those seeking a quick profit. Building wealth through property takes time and buyers should approach purchases with a 10 year investment horizon.
With a strong banking system, strict capital adequacy regulations and strong lending policies, the Australian property market is unlikely to see the crash and burn that occurred in the US due to the proliferation of unregulated “low doc” loans. McGrath warns that APRA may seek even tighter lending controls so that Australian markets do not experience the price devastation seen in many overseas markets.
The emergence of sea-change life choices brought about by improved accessibility to the Internet has strengthened property markets beyond metropolitan areas surrounding capital cities. Not surprisingly, McGrath says baby boomers between 50 and 85 years of age are least likely to risk capital losses.
Units are always in demand due to their affordability, ease to maintain and off-shore interest in Australian property. Of course, this is a general statement for the Australian market – there are areas of over-abundance, as seen in Fortitude Valley in Queensland.
McGrath is resolute in his belief that the time to buy property is right now. His insights in to some markets across Australia appear in the table below.
| Sydney | Strongest market. Not yet peaked |
| Melbourne | Strong but not yet peaked |
| Queensland | Next boom will be in SE Queensland |
| Perth | Struggling due to resource market |
| Darwin | Struggling |
| Tasmania | Tough |
| South Australia | Stable, sound market |
Of all these markets, McGrath believes the one that will attract the greatest interest from South East Asia is South East Queensland.
John proudly stated that his agency was the first in Australia to provide floor plans to prospective buyers and that most buyers are predictably using internet sites as their main resource to search for property. Your property must be listed on the front page of the major Real Estate sites.
Mortgage Brokers Dominate
McGrath also discussed the dominance of brokers in the mortgage space. He claims that 53% of all property mortgages are now being issued by mortgage brokers in Australia. This would come as no surprise to any Lane Cove resident with the number of local mortgage broker offices boom in recent years. In the Cove has received support from many of those mortgage brokers by listing in our business directory. Why would you go to one bank when someone can help you shop around.
John McGrath’s Audi Theory
Perhaps the most entertaining part of McGrath’s lecture was hearing his theory about Audi drivers. He believes that, in terms of property, Audi owners set the agenda. They like a quality car without the ego of some other brands (care to guess which brands they are?). Where there are Audi owners, in his view, property typically appreciates quickly.
ITC has noticed a lot of Audi cars recently. Did they come first or did they follow the ongoing ascent of Lane Cove property prices? It’s kind of like the chicken and the (golden) egg!
Thank you to Brent and John for an enjoyable breakfast. It was also great to see other In the Cove Business Directory Supporters at the briefing.
Sorry, must go trying to find an Audi for sale on Gumtree.
Do you have a local issue you would like help with? ITC is here to help just email us at [email protected]
You can subscribe to our newsletter by filling out the form at the bottom of our homepage. Our newsletter is sent out every Wednesday Night at 7.30pm and includes details of Lane Cove Events for the next seven days or so, and articles you may have missed during the previous week.
Have you liked our Facebook page or Instagram Page – what are you waiting for?!
