Top tips from a property expert.
Don't suffer from FOMO, and do your research. That's the advice of Robert Klaric, who has more than 25 years experience in real estate and with his wife Leonie ran one of the most successful agencies in Sydney's northern beaches, Klaric Partners Property Consultants. After selling the business to McGrath Real Estate in 2011, Klaric established The Property Expert International, an independent property advice and advocacy firm. Now, he has penned a book titled 'Secrets Of The Property Expert' where he shares his knowledge of the property market.
“Australia has an insatiable appetite for real estate. There’s no dinner discussion where it's not discussed, and when we get together on a Saturday night the first question Leonie and I get is always, ‘What is the market doing? When’s the best time to buy and sell?’," says Klaric, whose clients include high net worth individuals and celebrities such as Richard Wilkins.
His advice to Sydney buyers right now is to exercise caution. “They’ve got to stick to their game plan and not get caught up in the emotion, especially at auctions," he warns prospective buyers. "They’ve got to set a limit to what they can afford and stick to it. They’ve also got to think outside the square and look at other alternatives." Klaric says your dream might be a two-bedroom apartment in Manly, but you might have to look at things like a shop and residence. "Leonie and I, our first property purchase was a shop and residence where we rented out the shop to a newsagent and lived above the shop," he says. "That was our first purchase because we couldn’t really afford to buy a home. Not everybody is that keen to live above a shop, but for us it was still in the location we wanted and walking distance to Manly beach and it gave us what we wanted but was just a little bit quirky."
Today's first home buyers should do their research and only buy something they can afford, rather than joining the mad rush to simply buy because they’re afflicted with FOMO, a fear of missing out. “There’s a lot of buyers who think they better buy now so they don’t miss out, but the reality in real estate is that there’s always something else,” says Klaric. “Timing is critical. It’s important to buy right, because if you don’t buy right it just won’t work. It’s a long-term investment.”
Klaric thinks the real estate cycle is going to get bigger and people will live in their properties longer before selling. “People used to turn over a property every seven years but I think Sydney and Melbourne are going to get bigger and we’re going to see people turn over every 10 years because it’s expensive now to make that change,” he says. “Stamp duties, agents fees, all of a sudden it makes it harder to make the move more frequently.”
He also offers advice on selecting the right agent when selling your home. "The reality is if you lined up ten agents, and you had to pick two to deal with, eight of them just make up the numbers and two of them really know their market and know how to do the business," he says. “It’s like a line-up at a police station, you’ve got ten of them all wearing Giorgio Armani suits, they all look the same, they all speak the same, and you’ve got to select two that you can actually trust and work with you, and it’s not an easy choice for the consumer. However, the best way to do that is research. If you’re not sure about something in today’s market, you’ve got to research, research and research. You’ve got to make sure you’re selecting the right agent—has he got experience? Has he got a track record? Most importantly, is he trustworthy? Have you got friends or family who can say, ‘Yeah we’ve dealt with this person and we’ve had a great experience.’ They’re the critical areas in selecting an agency."
Looking ahead to the rest of 2015, Klaric believes the Australian real estate market will undergo a cooling. “Over 25 years experience, there’s only one thing that happens after a boom—there will be a bust,” he says. “Let’s not sugar-coat it, we have a boom at the moment and at some point that has to adjust. Now I don’t see a bust but I do see a correction in the marketplace. That correction will occur when the rates start to go up, so over the next 12 months when interest rates are low, that’s fuelling the fire and maintain the rage and the market," he says.
"The first quarter is certainly going to be very different to the last quarter this year.”