Interest rates: lock it in, experts say
Interest rates: lock it in, experts say
Posted on Thursday, August 29 2013 at 10:23 AM
Property investors should consider locking in their interest rates, according to some financial service providers.
Jane
Slack-Smith, owner of Investors Choice Mortgages, says borrowers should take
advantage of currently low interest rates as they look likely to rise into next
year.
“We
have interest rates as low as they’ve ever been and you should really consider
tapping into your equity now before it gets tougher,” she says.
Slack-Smith
says although the property market has strengthened, lenders are looking to
tighten their criteria.
“Economists are saying that overseas economies are
looking better, business confidence worldwide is looking positive, and there
are predictions of the Australian dollar falling.
“At the moment Sydney, Perth and Canberra are at
their highest median prices, Melbourne is 4.4 per cent below its highest
historical median and Brisbane is 10 per cent below.
“What’s going to happen to interest rates long term
if the economy is improving is that they’ll begin to start going up.”
Belinda Williamson, head of corporate affairs at
Mortgage Choice, says although there are competitive offers from lenders right
now, some have already begun increasing their interest rates.
“We’ve noticed that the one, two and three-year
swap rates started to edge up since about mid-August.”
Williamson
says lenders have competitive offers at present that borrowers should look at.
“Lenders currently have offers of fixed rates for
less than five per cent. Even this week we’ve seen four lenders drop their
fixed rates, so over the shorter term we’re likely to continue seeing fixed
rates fall, however it’s worth noting that there are glimpses of very marginal
increases in longer term fixed rates.
“Typically, fixed rates are higher than variable
rates so given that many fixed rates at the moment are lower than variable rates,
it certainly is a consideration for many borrowers at this point in time.”
Mark
Toole, owner of mortgage broker Custom Finance Group, says picking movements is
difficult and events that influence rate changes need to be monitored
continuously.
“The
things that have happened since Christmas (2012) have kept the trend going
down, but that can stop very quickly.
“I
had one client who locked in around March because she was under the impression
rates were going to go up. Since then we’ve had half a per cent reduction.”
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Hidden gem suburbs hiding next door
Hidden gem suburbs hiding next door
Posted on Monday, August 26 2013 at 5:12 PM
Have you been dying to buy into Sydney’s Manly, Melbourne’s Toorak or Brisbane’s Paddington? It might seem like nothing beats blue-chip real estate but that’s not the case, if you’re keen to own your home outright as fast as possible.
The top 10 suburbs in our main cities where Australians can buy a home
at a lower price than the more popular neighbouring suburb have been revealed.
Westpac’s general manager of retail banking Gai MacGrath says buyers who
truly want to own their home sooner can find real value by simply considering a
suburb which is a stone’s throw from their preference.
“For example, if you wanted to buy a house in the third most popular
suburb in Sydney, Baulkham Hills, you could consider travelling just eight
kilometres away in Seven Hills, where the average house price is 34 per cent
cheaper,” she says.
“You’d still be in the booming northwest of Sydney, but you could own
your home 18 years and five months sooner and save $435,028 in both purchase
price and interest repayments over time.”
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Arrest in Nigeria over WA real estate fraud attempt
Arrest in Nigeria over WA real estate fraud attempt
Posted on Friday, August 16 2013 at 1:04 PM
Imagine if someone tried to steal your house and you knew nothing about it! That’s what happened to a Western Australia landlord who was renting out his property in Falcon, roughly 50 kilometres south of Perth.
A Nigerian man
allegedly contacted the property manager in December 2012, purporting to be the
owner of the home, and requested documents relating to the rented property,
which were sent to him. He then used a Yahoo email address in the name of one
of the real owners, who is a Johannesburg resident, and requested that all
future correspondence be forwarded to the new email address and all phone
contact be made through a new number.
In January, 2013,
the agency received a request to sell the property and a sales agreement with
false signatures was completed. Fake passports of the two owners were also sent
to the agent, as well as a forged document from the Australian High Commission.
Fortunately,
suspicions were raised by staff at the agency, who had attended an anti-fraud
education seminar, and they contacted police.
With the help of
detectives, the agency then faked a sale of the property and were told to
deposit $785,000 into a bank account in southeast Asia.
This helped WA
police and the Australian Federal Police track the alleged offender down in
Nigeria. He was apprehended by Nigerian authorities when he attended an
international courier office and attempted to collect documents with a forged
driver’s licence.
WA police detective
senior sergeant Dom Blackshaw says landlords should keep up to date with their
property managers and obtain regular statements from them.
“Investigations
are continuing into other people who may be involved and also into whether
there are links between this case and the two successful and five attempted
frauds reported in WA over the past five years,” he says.
“Six of the seven
cases involved owners who live in South Africa, have investment properties in
Perth, which are rented, and have had their identities stolen.
“We’re not
exactly sure how the offenders come to know about the South African-based
owners and their investment properties, but it would appear they’re somehow
intercepting correspondence between the owners and their agent in Perth. This
could be physically by intercepting letters sent through the postal service, or
electronically by owners having their email account, or perhaps their
computers, hacked.”
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Melbourne prices impacted by elections
Melbourne prices impacted by elections
Posted on Thursday, August 22 2013 at 8:39 AM
Historical analysis shows federal elections have had a short-term negative impact on Melbourne’s property values.
Secret Agent Buyers’ Advocacy has released data from
the 2004, 2007 and 2010 campaign periods indicating a decline in average inner-city property prices in the six months leading
up to an election.
“These declines were particularly evident for
the 2007 and 2010 election periods when looking at the last decade of property
prices,” the report says.
Secret Agent studied 112,000 inner-city sales
between January 2002 and July 2013 in order to track the trends.
It wasn’t until six months after the elections
that housing prices began to fluctuate less and experience steadier, upward
growth.
The report says, based on the data, the same trend
is expected during this year’s election, although there are other factors
impacting prices.
“This year could be unique, however, as it marks
the first election campaign period that the average property price in these
inner-city suburbs is lower than that of the previous election.”
Paul Osborne, founder of Secret Agent, says
businesses and buyers remain cautious and slow down investment until there’s a
result when elections are looming.
“Afterwards, you probably don’t see an immediate
effect but there seems to be a confidence lifting in the 12 months after the
election.”
Osborne believes these results could be mirrored
in other cities.
“We’d love to grab the data and do it. I think
you’d find a very similar finding across all markets.”
Andrew Wilson, a senior economist at Australian
Property Monitors, thinks this election in particular will see a different
outcome.
“The cyclical factors will tend to override what’s
happening in terms of electoral factors, however if we have a strong policy
scenario that can impact buyer decision making. I don’t think we have that
now.”
Wilson believes the currently improving
Melbourne market will continue to grow.
“The trend has certainly been moving into mid
seventies (in percentages) for auction clearance rates in Melbourne, which
signifies a market moving from ‘solid’ to ‘strong’. It’s the trend of the cycle
at the moment that we need to be mindful of, and that’s certainly upward while
three years ago it was downward.”
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How much are you worth?
How much are you worth?
Posted on Wednesday, August 21 2013 at 4:04 PM
If you’re part of an ‘average’ Australian household, chances are you’re now worth nearly three-quarters of a million dollars.
A report released
by the Australian Bureau of Statistics (ABS) says the average wealth of
households in 2011-12 was $728,000. If you live in Canberra, you’re probably
worth even more, according to ABS director of the living conditions, Caroline
Daley.
“Wealth varied
greatly across the states and territories,” she says.
“The ACT had the
highest level of wealth at $930,000, which was around 28 per cent higher than
the Australian average. Western Australia, New South Wales, Victoria and the
Northern Territory all had levels of wealth close to the Australian average.
“South Australia,
Queensland and Tasmania had levels of wealth less than the Australian average,
with Tasmanian households having the lowest level of average wealth at around
$600,000. Household wealth was more concentrated in capital cities, where the
average net worth of households was $781,000, compared to $637,000 outside of
capital city areas.”
Not surprisingly,
most household wealth is thanks to Australians owning a principal place of
residence. More than two-thirds of Australian households own their own home
outright or have a mortgage.
“Households that
owned their own home outright, 2.7 milllion households, had an average net
worth of $1,237,000. Households with a mortgage on their home, 3.1 million
households, had an average net worth of $790,000, and the average net worth for
households that rent their home was $160,000.”
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Australia’s fastest-growing monthly magazine
Australia’s fastest-growing monthly magazine
Posted on Monday, August 19 2013 at 1:17 PM
Australian Property Investor is the country’s fastest-growing monthly magazine, with officially audited data showing a 26.9 per cent increase in circulation in the first six months of the year.
The independently published title recorded the
largest year-on-year growth of any monthly magazine between January and June
2013, according to Australian Buruea of Circulation figures released Friday.
“We put this phenomenal result down to a rebounding
property market, our continued push towards providing more innovative and
engaging content, growth in new distribution channels and our ongoing position
as the most respected title in our field,” API editor Eynas Brodie says.
The magazine, which celebrated its 16th
year of operation in 2013 and its 150th issue in August, kicked off
the year with a redesign.
“We foresaw the recovery in the residential property
market and took this as an opportunity to reintroduce ourselves with a
redesigned and refreshed look in January.
“The cleaner and more modern layout has been
complemented by an extensive overhaul of our bonus digital content, with most
features and profiles now including exclusive QR coded videos, podcasts, photo
galleries or forums.”
This deeper, richer level of interactivity and
engagement is above and beyond what readers could hope to receive at competing
titles, Brodie says.
Advertisers continue to enjoy access to a strongly
engaged and loyal readership, and this year saw expanded opportunities in the
digital space with new e-newsletters and an exciting partnership with online
podcast program Real Estate Talk.
API also invested in sponsorship of the Home Buyer
and Property Investor Show in Brisbane, Sydney and Perth, where current and new
readers had the opportunity to meet journalists, profiled investors and
columnists.
As the longest-running, API has a proud reputation
of being the most trusted and widely read property investment magazine in the
country, Brodie says.
“These results solidify that position. We continue
to provide unbiased, independent and expertly backed content to our existing
readers as well as a whole host of new ones.”
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Queensland property laws set for overhaul
Queensland property laws set for overhaul
Posted on Friday, August 16 2013 at 1:21 PM
Property law experts have been called in to overhaul Queensland’s property industry in a bid to remove red tape and “unnecessary regulation”, according to Attorney General Jarrod Bleijie.
Bleijie has
announced the
Queensland Property Law Act 1974, Land Sales Act 1984 and Body Corporate and
Community Management Act 1997 will be reviewed by an independent
panel.
With the help of
the Queensland University of Technology, Professor Bill Duncan, Professor
Sharon Christensen and Dr Bill Dixon the review will initially examine seller
disclosure requirements and body corporate lot entitlements.
The first two
issues papers are expected to be released early in 2014.
Bleijie says the
review will streamline how Queenslanders buy, sell and manage property.
“To put it simply, property law in this state needs a
makeover and we are determined to provide a first class framework that will
meet the needs of Queenslanders well into the future,” Bleijie says.
The announcement
follows a similar review of the Property Agents and Motor Dealers Act that saw the
requirements for providing sustainability declarations deleted.
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Housing market growth to remain steady
Housing market growth to remain steady
Posted on Friday, August 09 2013 at 2:18 PM
Improvements in the property market will continue but the strength of the recovery is uncertain, according to today’s quarterly statement on monetary policy released by the Reserve Bank of Australia (RBA).
The statement suggests a
continued rise in dwelling investment in the short-term future due to lower
interest rates and with housing prices six per cent above their 2012 trough.
“The demand for housing finance
has continued to strengthen, consistent with rising dwelling prices and lower
interest rates, with the value of housing loan approvals rising at an
annualised pace of 25 per cent over the past six months,” according to the
report.
In addition, households are also
paying down their debt more quickly.
With households maintaining
their higher pace of mortgage prepayments much of the growth in loan approvals is
due to repeat buyers and investors with growth in the level of housing credit
relatively modest, according to the report.
The increase in total building
approvals is also expected to continue, the statement says, aided by “an
ongoing recovery in the established housing market, relatively high rental
yields, low borrowing rates and government support to first home buyers.”
Although the report also
found first home buyer approvals remained subdued due to changes to first home
buyer incentives, which refocused government assistance towards purchases of
newly built homes.
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Alpha coal project given environmental approval
Alpha coal project given environmental approval
Posted on Friday, August 09 2013 at 3:13 PM
Clive Palmer’s $6.4 billion mine in Queensland’s Galilee Basin has been given environmental approval by the State Government.
The Waratah Coal project in Alpha is expected to create 3500
construction jobs and more than 2300 operational jobs, according to the Deputy
Premier and Minister for State Development, Infrastructure and Planning Jeff
Seeney.
It will produce more than 40 million tonnes of thermal coal
for export each year over an expected life of about 30 years.
“It’s another major infrastructure decision for development
of the Galilee Basin and I very much hope the Commonwealth doesn’t now hold up
its approval and delay another vital project for the Queensland economy,”
Seeney says.
The massive thermal coal mine has been approved following an
Environmental
Impact Statement (EIS) study by Clive Palmer’s company, Waratah
Coal.
Coordinator-General Barry Boe says the project is also being
assessed in a parallel EIS under the Commonwealth Environment Protection and Biodiversity
Conservation Act 1999 and also needs Commonwealth approval before it
can commence.
The project, also known as the China First Project, is
proposed to consist of a combination of open cut and underground mining. It
involves the development of a new coal mine and a rail line linking Alpha to
Abbot Point, near Bowen.
Boe says the release of his evaluation report, including the
conditional approval, came after more than four years of environmental
assessment and public consultation.
“The conditions establish clear principles and procedures to
manage matters, including surface and groundwater impacts, rail line flooding
and social impacts,” he says.
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WA hikes land tax, scales down first homebuyer grant
Posted on Friday, August 09 2013 at 9:55 AM
Property owners in Western Australia will be slammed with a 12.5 per cent hike in land taxes as the resource state grapples with soaring costs and flatteing revenue.
In a further bid to cut costs, it has become the final state
to gouge its first homebuyer grant for existing properties, although the
government refrained from scrapping it completely in yesterday’s Budget.
The current $7000 incentive for first-time purchasers of an
established dwelling will be cut back to $3000.
However the government will bump up the grant for anyone
buying a newly built or off-the-plan home, offering $10,000.
That tweak is one of a variety of cost-saving measures
outlined in the resource state’s 2013-14 fiscal blueprint, which forecasts 3.25
per cent economic growth in the next year.
That’s the fastest economy of all other states and
territories and dwarfs the national economy’s projected 2.5 per cent growth
rate.
Despite that, Treasurer Troy Buswell says WA faces a debt
issue and the next year’s expected surplus of $386 million could be the last
time the balance book is in the black. A deficit is on the cards for 2014-15,
the government concedes.
“An imbalance has emerged between growth in the state’s expenditure and
growth in revenue,” Buswell says. “This brings
significant financial challenges, as major resource projects transition from a
construction phase to a production phase, the demand for labour has begun to
ease, and so has growth in the State Government’s tax revenue.
“The challenges are exacerbated by WA’s declining share of GST revenue. It
has already fallen to a historic low of just 45 cents for every dollar of GST
raised here – that means WA loses $477 million in revenue.”
That pressure has forced the government to find $6.2 billion in savings
over the next four years, from spending cuts and revenue-raising measures to
public service redundancies.
One such cash grab includes a 12.5 per cent across-the-board increase to
land tax, which Buswell says will offset lower than expected land valuations.
Workers on 457 visas will have to pay $4000 per year to send their kids to
school, solar panel owners will get a lower feed-in tariff, public service wage
increases will be capped and authorities will re-prioritise infrastructure
spending.
Purse string tightening aside, the government will invest a staggering $4.5
billion of new money in infrastructure this year, bringing the total program
commitment to $27 billion over the next four years.
That includes funding the MAX light rail project, the airport rail link and
the Swan Valley bypass, more commonly referred to as the Perth to Darwin
Highway.
On roads, the government will invest $1.8 billion in improvements over the
next 12 months. Health services will receive a major boost with $1.1 billion
allocated to hospital rebuilding efforts, while $580 million will be spent on
school infrastructure.
“This State Budget reflects tough but necessary
decisions undertaken by the government to secure our economic future,” Buswell
says.
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