Hope for brighter real estate market

COLLIE real estate agents can see a flickering light in a very gloomy market, but say much hangs on Yancoal’s plans for Premier Coal and where Perdaman Chemicals and Fertilisers are going with their planned urea plant.

Talks between Premier’s bosses and Perdaman Chemicals and Fertilisers have raised hopes, flattened by the breakdown in the relationship between Griffin Coal and Perdaman and their court actions.

“To be honest, in the past four to six weeks the market has been very very down,” said Charles Pinto of Summit Realty South West.

“I’ve been talking to other rep’s and they’re saying the same things as well.

“There’s a severe lack of inquiry and buyers.

“We can only push on and remain positive.”

There had been inquiry at the cheaper end of the market but investors were making ridiculous offers.

“Properties are negotiable but there is a difference between negotiating a property and stealing it,” Mr Pinto said.

“We are showing a lot of properties but people are reluctant to put offers on paper.”

However he was hopeful of an upturn soon. “In two or three months there could be more optimism in the town,” Mr Pinto said.

The breakdown in relations between Griffin Coal and Perdaman had been unfortunate. “We need some positive information on the companies,” he said.

Negotiations between Premier Coal and Perdaman were cheering but that was not the only cause for hope.

The Premier coal mine, now part of the Chinese-owned Yancoal Australia, had big plans and the char plant was only part of them.

He expected the local real market to start moving when these developments became public.

“We have a high number of listings at the moment,” he said. “We need confidence not just in the market but in the town itself.

“If Yancoal is successful with Perdaman – and they are talking much bigger stuff as well, they have big plans for the future – things will really start to happen.”

Harley Johnston of Western Districts Realty said he “did not want to be all gloom and doom” but real estate agents had been through a very quiet Christmas period.

“I am just starting to notice a lift in inquiries without setting any records,” he said.

“I am hoping that will transfer to a few sales.

“Some are buying but not many and there are a lot of houses on the market. We need to get a few sales in the next few weeks.”

The prices put on the Griffin Coal houses, when the mine was in the hands of receivers, had done huge damage to the local market, Mr Johnston said.

“I rang the real estate agent handling it and asked him if he knew how much damage he was doing to this market and he said ‘we have to sell them’.

“He could have sold them at a reasonable price.”

Mr Johnston had a client who tried to buy one of the Griffin properties, arguing he could not afford to dip out on such a bargain.

But Mr Johnston pointed out that the client would also have to sell his existing property at a bargain price.

Even though many of the Griffin houses were subsequently withdrawn from the market, to be relisted later at more reasonable prices, the damage had been done.

Vendors still had to be resilient as far as prices were concerned. “They must either meet the market or sit tight and wait,” he remarked.

“There is a reluctance by vendors to reduce their prices. What’s the point of reducing them further when no one is looking?”

Mandy Hassall of Century 21 Advance Realty agreed real buyers were scarce.

“Generally speaking the market is very low with people looking for bargains,” she commented.

“I am getting a bit of inquiry but offers are not realistic.

“You have a house down to $160,000 and they ask if they will take $100,000,” she reported.

There had been a little action before Christmas but not much. Still that was an improvement on earlier in 2011,” Ms Hassall said.

Mark Bateman of Southern Districts Estate Agency commented: “The whole WAmarket has been described by all the management economists as having reached the bottom.

“This suggests that broadly we are in the bottom of the cycle in WA.

“With the expectation of another two interest rate cuts – making up to four and reducing rates by one per cent – and housing prices cheap, now is a good time to get into the market.”

The change is ownership of Collie’s coal mines had made people more conservative, he said.

Like other local estate agents, he found the market very slow. But real estate sales were picking up in Bunbury and he expected that to flow through to Collie is about six months.

Source: http://www.colliemail.com.au/news/local/news/general/hope-for-brighter-real-estate-market/2422672.aspx?storypage=0