Introducing Chris Tonich

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Chris has a wide range of experience covering a number of real estate disciplines. Chris has substantial experience in a variety of Residential Real Estate areas from the sale of Subdivisions to Development Sites and Apartment Projects. His vast level of experience allows an insight into multiple markets and the drivers within them. Chris has also had substantial experience in Project Sales working with award winning London Real Estate company, Keiller Collins Property, who specialised in Apartment Sales and Management and Project Marketing. During his time with this agency he represented specific International Investment Syndicates from Africa, Hong Kong, and London who developed cutting edge high rise apartments in Canary Wharf, North Greenwich, Gallions Loch and Docklands. WA’s Top Sales Team for REIWA 2007, 2008 REIWA MLS Award Winner 2008, 2009, 2010

Tuesday, 13 September 2011


I designed this blog as a platform to communicate my professional opinions on the real estate industry and in particular  West Australian property market. This month however I would like to share an article I came across in the September edtion of the BRWA magazine that I though was an honest valuation of where Perth currently sits in the economic landscape of Australia and the world. Report was written by Agnes King, I hope you enjoy it. Please feel free to comment.

On the 20 minute ride from Perth airport to the central business district, the cabbie reveals he arrived in Western Australia two years ago to start an Indian restaurant with his friend who is a Perth local. That's Western Australia, the entrepreneurial state.

Everyone from the taxi driver to the mining magnate has a money making idea that they're not afraid to take a crack at. Some saya it's the isolation. Western Australia is a big state and Perth ia a awfully long way from anywhere else of importance. Freight from the eastern seaboard is so expensive it's often cheaper to make a product or develop a service from scratch.

The spirit of Western Australia's famous entrepreneurs, including Robert Holmes a' Court (Australia's first billionaire), Alan Bond and Lang Hancock loom large in the state's psyche. "A lot of people worked with them,learned the skills set and applied it, like Alan Newman (former Futuris managing director)," PwC tax partner and Perth local Frank Cooper says.

That entrepreneurial flare is still there. While the 1980's is looked upon as the period of the "wheeler dealer", today's entrepreneurial culture has a more profesional dimension to it. The mining boom has transformed WA from a domestic economy to one that s more nationally and internationally focused.

" The fundamentals of WA haven't changed. It has three major industries: mining, government and property. But over the past seven years, our small and medium enterprises have become less small, more medium," says Cooper. That's changed the dynamic of places such as Perth, which has transformed itself from a big country town into a capital city.

Perth is an easy town to integrate into because in most boardrooms, 50 per cent of the people around the table are from somewhere else. "Old school ties mean a lot more in Sydney and Melbourne," says Cooper. "most people here don't have on, which makes people more inclined to judge you on your merits."

But growth has created challenges for WA. The surplus infrastucture locals enjoyed up until 2005-06 as a result of the investment of previous governments are now under pressure. What's more, the mining boom has sucked an entire layer of blue collar workers and entrepeneurs out of the economy and into mining: gardeners, cleaners, plumbers and electricians are in short supply.

People talk about capital infrastructure projects worth $230 billion over the next five to eight years and an aditional 46,000 workers to avoid crippling labour constraints in the economy. Whether these numbers are precise is almost irrelevant. It's the magnitude that matters.

The boom-bust nature of the mining state creates distortions in the economy that most locals have learned to live with. Few things demonstrate this better than Perth's hotel market. It's almost inevitable that any cocktail party discussion in Perth will dissolve into a long-winded gripe about the dearth of ecent hotels in town. No one wants to invest in hotels in the down cycle and in the up cycle, real estate, labour and building supplies are too expensive to make it commercially viable. Why would a hotelier shut rooms in a boom to renovate them, especially when people will stay and pay premium prices regardless?

The Richardson in West Perth is perhaps the one exception. Owner Joe Oxley ia an Irish national who moved to Perth after 17 years in Hong Kong. He saw there was no true five-star hotels in Perth and invested $30 million in 2003 building a 75 room luxury hotel and spa that has hosted the likes of Beyonce and Maylasian Royalty. At the time, people said he was crazy. Oxley claims the operation is profitable now. But he says building another like it in today's market is cost prohibitive. "Staff, material, property, everything has gone up." says Oxley. Most locals are accustomed  to WA's peaks and troughs. "We've seen lots of booms - the nickel boom in the late 60's typified by Poseidon, gold in the 90's.

Most of the locals know enough to diversify their interests from different countries and different commodities," says Damien Connelly, founder and director of Mineral Engineering Technical Services, a privately held mining services firm, which has substantial interests in Africa and South America.

Locals also know to diversify their personal wealth, although the two-speed economy has overlaid complexities that even experienced hands couldnt have envisaged.

The Hay Street Mall in Perth's central retail district is a ghost town, its emptiness made more miserable by the smattering of "closing down sale" signs at recently bankrupted chains such as Colorado and Angus & Robertson.

Locals are caught up in a vortex of inflation. It's fine for those blugged into the mining boom but for those tha aren't, the 20 to 30 per cent premium on basic services hurts. A young mother complains about the cost of parking at Subiaco markets: $5 for a half hour on a Wednesday morning when the markets are deserted. "Jeez you think they'd want people to come and shop," she says.

The wealth of a lot of private business owners-tied up in equity and property-has also taken a beating in the "GFC mark II" stockmarket volatitlty. But among the doom and gloom there are pockets of inspiration, driven by that strong entreprenurial bent and sense of resilience.

Family-owned winemaker Leeuwin has used the slackening demand from some traditional buyers to supply Asian markets that it previously didn't have the volume to service and has set up a scenic charter flight service from Perth to Leeuwin's airstrip to tap the corporate market. It has resulted in the number of visitors to its Margaret River estate rising in the past 12 months, despite the adverse impact on the strong Australian dollar on tourism.

The question of how long WA's mining boom can last elicits interesting responses. For Tony Sage, another self-made multi-millionaire from WA, it's less about the Chinese economy stalling, or the extent of the deposits in Australia. In his view, it hinges on how quickly Chinese money can bring African and South American deposits online and how fast the Russians can make their Siberian assets economically viable.

The belief undoubtedly is tainted by Sage's own extensive African investments. For others, such as New Standard Energy managing partner Sam Willis who has just secured $US109 million ($105 million) worth of funding from ConocoPhillips, the fith-largest refiner in the world, to explore its shale gas deposit in WA's Canning Basin, the outlook for the mining boom is a little more rosy.

Report by: Agnes King BRW September Edition 2011

Wednesday, 3 August 2011

Buying Off The Plan

Opinions can vary greatly when it comes to the topic of buying off the plan. Some will say it can be a great way to take advantage of a changing market and also a perfect opportunity to secure an apartment at a great price. On the other hand others will say that their experience with buying off the plan wasn't a pleasant one and what they thought they were getting and what they actually got was completely different.

So what should you do before deciding to buy off the plan?

Here are some tips to ensure that buying off the plan will be a pleasant experience.

Do Your Research.
  • Make sure you research the developer the best you can. Find out what previous projects they have completed and what their reputation is like in the industry. The agent selling the development should give you an insite into the history of the developer.
  • Look at the pricing structure of the prospective development compared to what else is on the market. This will give you the much needed confidence when it comes to the pricing of the development.
Ask Questions.
  • There is no such thing as a silly question when buying off the plan. Because you are not physically able to view the prospective apartment you should be asking the agent selling the project as many questions as you need to in order to build confidence in the project and help make a decision.
  •  Find out what all the outgoings are eg; strata levies, reserve funds etc.
  • Study the schedule of finishes to ensure they reflect the pricing of the apartment in question. If you are not good at reading finishes off the plan don't worry as most agents will have a sample board for you to view. This include such things as bench tops, floor coverings etc.
Reading Floor Plans.
  • Not everyone has the ability to read off the plan so ask the selling agent to take you on a tour of the floor plan relating to the apartment you are interested in. This will allow you to visualize how the apartment will flow.
Living area sizes.
  • This is one of the most important features of an apartment and should be one of the first questions you ask when visiting an apartment display or speaking with a selling agent. "How many square metres is the living area". Make sure you look at the internal living area as one size and the courtyard/balcony as another. I can't stress enough that the size of the living area should be one of the determining factors when buying off the plan.
Other considerations when buying off the plan, especially if purchasing as an investment, is to find out what common areas are included in the prospective development. For example: gym, pool and other common facilities.

Finally, be sure you can afford to purchase an apartment off the plan. Once you buy off the plan its usually an unconditional contract with a 10% deposit and nothing to pay until completion. However when settlement comes around you are committed to purchase regardless of your situation.

I hope this information helps you when making a decision to buying off the plan. Should you have any questions please leave your comments.

Monday, 4 July 2011

My take on the West Australian Property Market.

Overall the West Australian property market, like all property markets in Australia at present is considered slow. Properties don’t look like experiencing growth in the short term, however if you look at the internal sector of the WA market you will find that the investor market is gaining momentum and outperforming other states. High rents and low vacancy rates have attracted attention from investors all over Australia. Add to this a strong mining sector, and WA is tipped to bounce back.

Western Australia market is experiencing:

·         High Demand for investment properties caused by a low vacancy rate.

·         An influx of “Corporate Tenants” has seen a high demand for furnished Perth Inner City Apartments with excellent rents being achieved.

·         More investors are entering the market taking advantage of solid rental returns from their investment property and the potential for future growth.

·         Private Residential Developments are on the rise and more Inner City developments are being approved through local government.

·         Due to a decline in buyers and an oversupply of properties on the market the average days on market has increased to an average of 63 Days

·         The $550,000 and under market is gaining the most traction with $1,000,000 plus properties currently  being considered a luxury item to the average home owner

·         Encouraging signs of “Opportunist Buyers” entering the market taking advantage of “well priced” property options.

·         With Perth & Western Australia achieving excellent rental returns from the mining sector interstate and overseas investors are looking at Western Australia as an investment option.

·         First Homeowners are no longer considered the driving force behind the Perth Real Estate Market with most opting to rent instead to save for a bigger deposit.

Overall the West Australian property market is considered sluggish however, economists predict a shift in sentiment as the resource boom gathers steam.
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Tuesday, 28 June 2011

Why Not Purchase A Perth CBD Apartment As Your Next Investment!!

If you are considering buying an investment property you can't look past slipping an Inner City apartment into your portfolio. With the Mining Resource sector BOOMING and international companies coming into Perth, relocation companies are always looking for inner city apartments to service clients from companies such as Chevron, Woodside etc.

Known as "Corporate Tenants", chances are you will only secure them is you have a furnished apartment as that is the main requirement for such a tenant. Yes it costs money to furnish an apartment. You can expect to pay anywhere from $10,000 - $20,000 depending on the size of apartment and quality of the furniture. Don't fear !! you will see a return in your investment as furnished apartments are getting between $100 - $200 a week extra in rent. Add to that the ability to depreciate the furnishings against your investment makes an inner city furnished apartment a strong consideration when buying an investment property.

What to look for in an apartment.

When purchasing an inner city apartment you should research the following:

How many square metres is the apartment? - As most apartments are sold "Off The Plan" you cant just walk through and inspect your potential purchase. Instead you rely on the information provided by your real estate agent and the ability to read off the plan. Open plan living apartments and spacious balconies should be on you wish list when researching.

How many parking bays does the apartment come with? - Parking in the CBD is considered a luxury. Most 1 & 2 Bedroom apartments come with 1 secured car bay and in some instances 2 Bedroom apartments come with 2 bays. If you buy an apartment with 2 bays it will not only help secure a tenant but with add value to the apartment when reselling.

What are the common facilities like? - Some will say you should avoid buying apartments with extensive communal areas such as theatre room, pool & gym as included with those facilities are usually care taker fees and maintenance issues which contribute to high strata fees. However, most investors who buy inner city apartments look for extensive communal areas such as pool/BBQ areas, spa, gym and even in more modern apartments, conference rooms for business meetings. Communal areas overall are seen as a advantage when leasing properties out as it offer a lifestyle to the prospective tenant without the tenant having to commit to gym memberships etc.

What are the finishes like? -  A question you MUST ask the agent selling the project as you need to have a detailed understanding on what you are actually buying especially if your buying "Off The Plan". Most inner city apartments will offer stone bench tops in the kitchen, good quality carpets in the bedrooms, hallways and possible living areas with tiles,carpet or timber flooring throughout the rest of the apartment. The good news is developers in the Perth Inner City area are currently producing great products in the way of apartment living.

So....... my advice to those looking to invest in the Perth property market is that you MUST consider an inner city apartment. This is not only for the opportunity to secure EXCELLENT rental returns but to also take advantage of the OPPORTUNITY for future GROWTH.

For more information on purchasing an inner city apartment or buying "Off The Plan" contact Chris Tonich, Director of Burgess Rawson Residential at .