Buyers agents rack up $800million in purchasers for financial year 2009/2010

BUYERS agents are emerging as key players in the Australian property market according to a survey conducted by a leading industry body. The survey conducted by the Real Estate Buyers Agents Association of Australia (REBAA) has shown that the collective buying power of its members accounted for more than $800 million of residential real estate purchases across the country last financial year.

According to REBAA President Mr Byron Rose buyers agents are having a significant influence on the Australian economy in general and the real estate industry in particular. “With our growing numbers and with more home buyers and investors realising the value of using a buyers agent, we expect that figure to tip the $1billion mark next financial year,” said Mr Rose.“Buyer’s agents promote and protect the buyer’s interests, keep the bargaining and financial position of the buyer confidential and provide anonymity if needed. “Buying a home or any property for that matter, is a major purchase which is often made after spending as little as half an hour looking at the home.
 
Mr Rose said in the last 10 years the number of buyer’s agents operating in Australia had increased from half a dozen to an estimated 100 nationally. “This recent growth has lead to the establishment of specialist Buyer’s Agent chapters within Real Estate Institutes in some states and the Real Estate Buyers Agents Association of Australia nationally,” he said.

“These groups have been established to satisfy the need for an independent
professional body to represent buyer’s agents and operate as a regulatory body for this new and emerging industry. The aim is to set high standards and to provide the consumer with access to a recognised group of property professionals with the relevant and necessary qualifications.”

The advantages of "Marking to Market" with a property upgrade or your next purchase...

What a lot of people do when they sell with the view to upgrading – and rightly so; is try to sell in a rising market to achieve the best possible sale price. They need to do this (to also realise the best possible tax free profit they can) so they have more purchasing power in the next purchase (buy a more expensive property) often wanting to reduce the debt levels in the larger purchase or at the very least, take in more equity.  A rule of thumb is to buy and sell in the same market. But this can still be sometimes costly – when you factor in purchasing costs on top of the purchase price and certainly in a rising interest rate environment like we are in now – at least uincertain!

Conversely, in the current market we are in, there are advantages in selling a property on the basis of a “mark to market transaction”.  For example if your property was purchased in 2005 for $1.8 million and today (Dec 2010) it could achieve $2.5 million but back in March 2010 it may have got $2.7 million the seller may consider they have lost equity in their property – not true; they have missed the opportunity to realise a greater profit, that’s all and they will have had to pay a higher price for the upgrade property – more than likely...

Consider this though, if the property you purchased for $1.8 million in 05 sold at a realistic price of $2.5 mill today, you will have realised a profit of $700,000 + the equity (which was probably 20% of the original purchase or $360,000).  You will have achieved a ROC (return on capital) of 94% - TAX FREE by the way; and now you can purchase the 'upgrade' property (even factoring in higher interest costs – not so if you are an expat borrowing off shore, and even accounting for the strength of the AUD) which in a heated market would have attracted a price of $3.7 million in March 2010, now, in 2011 - with the competition premium evaporating; the same property on a like for like can be purchased for around $3.3/3.4 million or better (this isn’t myth, these are the adjustments we have and are seeing in the market).  

A saving on the purchase of $300-$400,000 + is not insignificant when you factor in Stamp Duty Savings as well and the interest savings (See the Table below).   The savings shown below would more than compensate for the strength of the AUD currently for expats, and the uncertain interest rate environment we are in - locally; plus the “time in market” upside (cash in property rather than cash at bank).   

Even if you have nothing to sell, have already sold, or are relocating, buying in the current market at certain price points will deliver fantastic savings - and are not insignificant and may represent hundreds of thousands of $$$ as well as well as lower interest costs, saving tens of thousands of dollars year on year...

A Purchase in March 2010 on a like for like	$3,700,000	A Purchase now in 2011 on a like for like	$3,300,000
Stamp Duty	$188,990	Stamp Duty	$166,990
Total Cost	$3,888,990	Stamp Duty Saving	$22,000
		Add Purchase Price Saving	$400,000
	Saving	On the upgrade or purchase	$422,000.00
	Interest saving on $422,000 @ 7%		$29,540.00 per annum year 1