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Local and Melbourne buyers compete, yielding a great result

December 17th 2008

Sale fetches top price for Point Lonsdale home

Fletchers has just sold a home at auction for $81,000 above the reserve – an astonishing result that has delighted the vendors.

Director James Gladman told Property News that 8 Elliot Court, Point Lonsdale, attracted strong buyer attention with no less than 3 bidders competing for the property on the day. The result? The home sold for $506,000 – the reserve had been set at $425,000.
“This was a great result,” James said. “The 2 losing bidders were still holding strong right until the hammer fell. This was a spacious residence in a quiet court location, only a short stroll to the beach. It was perfect for a holiday home or permanent residence.

“Sold under instructions from Defence Housing Australia this property was well maintained with 3 bedrooms, a separate study or fourth bedroom, an ensuite and a main bathroom and large living areas. The home was situated on a generous allotment of about 673 square metres with a double garage,” he said.

James Gladman said with interest rates falling and the vacancy rate in rental properties at an all time low, now is an ideal time for investors to buy. Fletchers believes that the Bellarine Peninsula offers excellent opportunities for investors.
“The falling interest rates combined with high rental yields means that investors entering the market now will be well positioned to take advantage of capital gains as the market strengthens.
“Opinions vary but it’s generally held that despite fluctuating interest rates and negative economic influences most properties double in value about every seven years,” James said.
“Most investors enter the property market when their returns are about 5 to 7 per cent. Depending on their personal finances, some investors can absorb a negative return. That is, they make up the difference between the rent and the mortgage repayment. Other investors look to ensure their investment properties are either cash flow neutral or give them a small return.

“In past property cycles, once investors saw that interest rates were falling and rental yields were improving they started buying,” he said.
“What usually happens then is that first home buyers begin to compete for the same ‘more affordable’ properties. This is because in an effort to avoid paying high rents buyers decide the difference between renting and paying off a mortgage is worth it. To avoid the pain of paying high rents, these home buyers become more willing to make a few sacrifices for a couple of years for the pleasure of home ownership.
“Then history repeats itself as the rule of supply and demand comes into play. Investors and home owners put demand on the lower end of the property market and this in turn creates buyer competition and pushes prices up,” he said.

If you are planning to deal in real estate on the Bellarine Peninsula, then contact Fletchers. Their expert team of consultants will be only too happy to guide you about the best way to buy and sell in the area.

– Fletchers Property Newsletter December 2008 Edition