Investors paying 15pc more than necessary for property
With property prices continuing to climb, particularly in Sydney, one real estate group has warned that investors are at more risk than ever of overpaying.
LJ Hooker said year-on-year growth in Sydney house prices peaked at 15.2 per cent, according to the group’s Q1 myMarket Report.
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“This means a client is essentially paying 15 per cent more for a property today than they would have if they had been given the right advice two years ago,” Kiril Ruvinsky, director of the recently launched LJ Hooker Sydney Buyers Agency said.
“I’ve spoken to clients who have been searching for their perfect investment property for more than two years; not only is that a huge investment in their time but it also reflects a massive capital loss,” he said.
In addition, the real estate group said it had seen an almost 17 per cent increase in auction activity over the past two years – which Mr Ruvinsky said reflected the fierce level of competition in the Sydney property market.
“Just venture out to an open home on any given Saturday in almost any suburb across Sydney and you will be met with a wall of potential buyers looking to get into Sydney’s rising property market,” he said.
LJ Hooker head of real estate Christopher Mourd said even though Sydney has all the hallmarks of a sellers’ market, there are still opportunities for investors to buy – which is where he believes the group's new buyer’s agency will play a crucial role.
“Many buyers are time-poor and cannot invest the 100-plus hours it can often take to find the perfect investment property,” he said. “Our buyer’s agency can now fill that void for many of our high-net-worth clients.
“Sydney is definitely a sellers’ market, so to have a buying expert on your side could potentially mean a difference of tens of thousands of dollars, or more.”
Mr Ruvinsky said the buyer’s agency would purchase property from all real estate brands, not just LJ Hooker listings.
LJ Hooker Sydney Buyers Agency is expected to generate most of its revenue from local buyers, although the idea for the new business was actually sparked by foreign investors.
The group’s international offices in New Zealand, Asia, Dubai and the US send through a “high volume” of referrals each day, but until now LJ Hooker hasn’t had a way to provide exclusive assistance to those investors.
Mr Ruvinsky said another problem has been that foreign investors can struggle to be taken seriously by local buyer’s agencies and often fail to have their calls returned.
