24 Dec How smart property investors spend Christmas – Michael Ossitt
With the number of Sydney property transactions down and the number of listings up, the coming holiday period is offering great conditions for savvy buyers and investors. Strand Property Group director, Michael Ossitt, says that the need for people to sell their properties does not stop just because it is Christmas.
Kevin: Well at a time I guess when we’re sort of relaxing with the family and celebrating Christmas and the new year, we tend sometimes to overlook the fact that things move on. The shops are still open, people are still looking to sell their property. Michael Ossitt from Strand Property Group joins me to talk about the opportunities that do lie. So you’re expecting, Michael, that you might be selling some properties over this Christmas period? Or buying some in your case?
Michael: Absolutely, Kevin, yeah. So we don’t really switch off over the holidays. We tend to find some good opportunities. As I mentioned you know vendors still need to sell, regardless of Christmas and New Year, but we tend to find a lot of buyers disappear at this time.
Kevin: Yeah, generally anyone who’s got their property on the market right now, and being prepared to have inspections over this period, you’d think would be fairly serious wouldn’t they?
Michael: Yeah, absolutely and especially for those vendors that might have bought already as well. So they could have been out shopping in September and October and found their next property and they’ve got to get their existing one sold. So they’re certainly going to be the ones that are serious over this period and still letting people through.
Kevin: It’s interesting you say that, Michael, because end of the year is a time where people do make the decision to move, or to change jobs or change locations. How can a buyer be sure they’re dealing with a serious seller at this time? What are the things that you would suggest they look at?
Michael: A good thing to look at obviously is to find out how long the property’s been on the market for, so if it’s been on a little while, they’re obviously going to be more motivated to sell, but asking lots of questions as well of the selling agent, so trying to find out the motivations of the vendor. Find out if you can if they have bought elsewhere, and really their true reason for moving. I mean if they have bought elsewhere, they might have a limited settlement on that property and they need to sell, so that really does offer up a good opportunity for a buyer to get a good deal at this time of year.
Kevin: Yeah, at a time when we’re getting more listings on the market and listings aren’t selling, the market swings from being a seller’s market to a buyer’s market. Buyers have great control. This is a time when they should leverage that control, which is really what you’re saying isn’t it? Not miss the opportunity.
Michael: Absolutely, absolutely, and what we’re seeing obviously in the broad media is a lot of negativity about the property market. But you know, as I keep telling my clients, if you take a long term horizon, it’s these periods of time where you can actually pick up a fantastic opportunity. As long as the property is right for what you’re trying to achieve and whether that’s investment or for yourself and just because there’s lots of properties on the market, or there’s a potential bargain there doesn’t necessarily mean it’s a great property. So you’ve still got to do your due diligence and still choose the right thing.
Kevin: A lot of negative press at present about the property market all centred around Sydney and Melbourne of course, which constitutes the major part of the Australian market anyway. What do you see ahead for Sydney in 2019?
Michael: Yeah, so what’s going to be interesting going into next year is obviously we’ve got the royal commission the first of February. The final report coming out and obviously we’re going into an election, so broadly speaking, but for Sydney as well there’s a lot of uncertainty, but once we start to see that pan out, I actually think we’re going to start to see Sydney levelling off next year and there’s even talk of things you know starting to pick up. I think slowly, we’re not gonna see a quick rebound next year. But a big thing that plays in Sydney is obviously new dwellings. Now we’re seeing the approvals come off of that, we’re seeing a number of new apartments and dwellings, commencements reduced. So we’re going to go through this period where we’ve still got big population growth coming into Sydney and Melbourne, but the number of new dwellings is obviously reducing, so we’re going to get back to that equilibrium point where the demand’s gonna pick back up again. So it’s only a matter of time really.
Kevin: The unit market in Sydney, is that running any risk of over supply?
Michael: I mean broadly speaking, I think that risk is now gone, but there are pockets where we are seeing still a lot of units coming through and developers starting to struggle to sell some of those as well. So it’s going to affect prices in those areas and potentially rentals as well if you’ve got a big supply of renal properties in certain pockets. But the areas that we deal in generally, sort of the eastern suburbs, lower north shore and beaches we’re not seeing as much supply of new apartments coming through but you look at Parramatta and the hills, there’s certainly a glut of apartments coming though there, Kevin.
Kevin: Where’s the best buying opportunities now, Michael?
Michael: Look, I think it’s always that long term prospect of picking the good areas close to where people want to work and generally in Sydney that’s closer to the CBD within that sort of 5 to 10K radius, but in areas where there isn’t a big supply or a big future supply. I definitely don’t recommend you know buying right in the CBD or in that south Sydney pocket where there’s lots of rezoning potential, but in those pockets where there is a large supply of new dwellings.
Kevin: Can you give me an example of some of the locations you’re talking about?
Michael: Yeah I mean some of the areas where to buy in is like Neutral Bay, Cremorne, up towards Manly and those areas and obviously the adjacent suburbs like Potts Point, and you know down towards the beaches is always gonna have that demand stronger than what they can build there.
Kevin: Some of those areas you mentioned, there’s some really good older style units in there, quite robust, well built, good locations. What sort of price would you be paying for a two bedder in those areas?
Michael: You’re still looking around the million dollar mark for a solid two bedder. It has come off a little bit from where we were at the peak, but you could argue that the peak in the middle of last year with all that sort of exuberance and people paying silly money at auction, so I think we’ve come back to a fair value now. But yeah, you’re still looking around that sort of 900 to a million for a good two bedder, and generally that’s what we’re buying as well as those well established blocks and smaller blocks you know, less than sort of 20 to 30 units, no more than that. And things with renovation opportunities as well. So especially in this market now, you know you can add value yourself by spending some money internally and improving it.
Kevin: Michael, thank you very much for your time. Michael is from Strand Property Group. The website, Michael, is it-
Michael: Yeah, Strandpropertygroup.com.au.
Kevin: Nice and easy. Thank you, Michael, talk to you again soon.
Michael: Thanks Kevin, cheers. Bye.