3aw 774 - The ross & john show interview experts about Melbourne property forecast

Ross: Not all punting is contained to the horses, there is another interesting bet taking this place in another field altogether, a field that actually gets mentioned in the front page of The Age this morning as being a reason that consumers are flocking back to the shops and that is 'rising house prices'. I want to discuss that with you later and discuss it with our next two guests as well. Rising house prices at a share market with a 5 year high are drawing consumers back into the shops. So as mum checking her share portfolio and the value of her house that means scurrying out to Chadstone, is she? Sometimes you wonder whether economists have got any idea. And it is this: to explain we've got Greville Pabst and Graham Mirabito, Greville is from the WBP Property Group and Graham is CEO of RP Data. What they do is they're going to predict what is going to happen in the next 12 months in the property market, everyone's biggest investment in their life is their home. Greville and Graham good morning to you. Greville & Graham: Good morning Ross. Ross: Starting with you Greville you guys are basically competitors are you not? Greville: Not really, WBP is a property advisory and a valuation group and RP Data is a data company so we don't really compete in the same market but we're in the same industry. Graham: Greville's a customer. Ross: Right, so what you're going to do is you're going to tell us what's going to happen in the next 12 months in the residential property market, correct Greville? Greville: Yeah well Graham and I have a bet every year and this year the bet was that I said that house prices in Melbourne were going to grow by 8 per cent this calendar year and it looks like we're ten months into the year and my reckoning is we've passed the post and we've hit 8 per cent so I'm not sure whether Graham wants to concede. Ross: Are you going to concede Graham? Graham: Well you know, we are the data company and we produce these results and the results year-to-date are 8.1 per cent but I do need to remind you that the year is not over yet and there's two months to run and I did look at the index, we have a daily index we value every property in five capital cities and I'm sorry Greville but it's dropped back a couple of percentage points, by basis points sorry. Ross: What was his prediction originally? Graham: He's at 8 per cent for the year end and I'm saying that 8 per cent is too aggressive for Melbourne for a whole year, this is at the beginning of the year we made the bet. Ross: What did you say? What was your figure? Graham: Less than eight. Eight was the benchmark, he said over eight, I said less than eight. We had the same bet last year and unfortunately he won but he is one of my customers so I concede defeat gracefully. Ross: Well you've gone the early crow though Greville, there's two months to go and you're claiming 8 per cent. Are you confident Greville, that nothing's going to happen between now and December 31. Greville: No, look I'm very confident and I've certainly seen a lot more confidence back into the market, particularly since the change of the government and we're about to enter our busiest period in spring after the races in November and early December and I think we'll continue to see some growth. I think it's going to run really deep this year, I mean the last auction day will be about the 21st December and we've got seven weekends to go and what I'm seeing out on the street, the depth of buyers, particular in the inner city there's three or four bidders at auction and there's lots of people still going through open for inspections. Ross: Righto, let's get a few rapid ??? 3.39 as we could, now fellas, first one: Is there any capital city in Melbourne that has as many weekends where you can't put a house up for auction because of Grand Final, Melbourne Cup and the like? Graham: One of the things about auctions here is that 30 per cent of your market is auction, 70 per cent isn't so I know you hang on the auction market a lot but there's a lot of data about the treaty sales and each sale is certainly a different picture when you come to units, units aren't growing as fast as houses. Ross: Ok, so that's that one answered. Next 12 months from now to next Melbourne Cup day, what's going to happen in the residential property market? Greville: I think we'll continue to see growth. Ross: No, put a figure on it, no mucking around. Greville: How about I put our bet up now. It all depends with what happens with unemployment. I think we're still going to see growth. Ross: Put a number on it Greville, come on. Greville: Ok, we'll say out bet next year Graham, we'll say 6 per cent. Ross: Righto, 6 per cent Graham? Graham: Yeah I definitely won't hit six so I'll take him on six. Ross: Hey listen, what's the prize if you win? Greville: Well the prize is a nice bottle of Italian Barolo, a nice super Tuscan at one of the most expensive restaurants in Melbourne or Sydney. Ross: Righto, next final question. What's a hot Melbourne suburb for the next 12 months? Greville: Look, I really like Coburg actually. I think Coburg will potentially show a fair bit of growth. Sydney Road just keeps stretching further and further out and I think there's some really good value in Coburg. Ross: Righto, Graham? Graham: No, look I've been down on Melbourne around its over-supply of units in the inner-city and I think that's what makes it actually good buying. Property's a long halt, just like the big race today, it's a long race. My tip is actually negotiate very hard, get yourself an inner Melbourne unit, use Greville to help you do it because he knows the local market very well but that's a long halt and it'll be a great tip. Ross: An inner Melbourne unit. Good on ya fellas. Greville Pabst from WBP Property Group and Graham Mirabito from RP Data. How's that. So what would your father have said when he turned on the wireless to hear someone urge that a hot Melbourne suburb was Coburg. John: Well he wouldn't have known where it was for a start. Remember that old joke that you'd ask someone where they were from and they said 'I'm from Coburgo' because whenever someone would ask where you're from and you'd say 'Coburg' they go 'Oh'.