Property market off and running
Property market off and running
Posted on Thursday, April 04 2013 at 9:09 AM
Australia’s housing market recovery and revival has been confirmed, thanks to high clearance rates, low interest rates and an increasing number of buyers, according to Australian Property Monitors.
The February 2013
Housing Market
Report says the sharemarket is also a solid leading indicator of
housing market activity, particularly in relation to prestige properties.
“With the All
Ordinaries now holding above 5000 for the first time in three years, a rising
bull market will activate prestige markets that are finally showing early signs
of emerging from a sustained period in the doldrums,” senior economist Andrew
Wilson says.
“The
international economic outlook continues to brighten, with a gradual recovery
still on track in the US.
“China’s high
growth is also holding firm and iron prices are at record levels, which is
heartening news for Australia’s resource exporting economy.”
Sydney and Perth
are the strongest markets, followed by Melbourne and Brisbane.
In Sydney,
weekend auction clearance rates are tracking nearly 20 per cent higher than
over the same period last year. Early season clearance rates (68 per cent in
February) have been similar to those recorded during the boom period of autumn
2010 and are a positive indication of rising market confidence,” Wilson says.
“Signs are also
emerging of a more generalised lift in Sydney buyer activity, with increased
sales in the prestige market.”
Melbourne’s early
season buyer activity has been similar to Sydney, with strong auction clearance
rates recorded over February (68 per cent) and the middle-ring mid-price range
suburbs back in demand.
And after years
of economic setbacks and weather troubles, Brisbane is poised to record
increased buyer activity.
“First homebuyers
will however be lagging contributors to a market revival, with Australian
Bureau of Statistics (ABS) December home loan data revealing the lowest
proportion of Queensland first homebuyers in the market on record,” Wilson says.
Canberra might
also face some headwinds in 2013. Its unemployment rate is 5.3 per cent, the
highest ever recorded for Canberra by the ABS. Unemployment might also continue
to hurt the Adelaide market. Its unemployment rate is currently 6.7 per cent,
the highest of all the major capitals.
On the other
hand, the Perth housing market continues to offer the best prospects of all the
major capitals for house price growth in 2013, according to Wilson.
“Low
unemployment, record population growth and a shortage of housing driving steep
increases in rents are acting to intensify buying activity.
“Perth’s high
rents are a strong motivation for first homebuyers, with Western Australia
recording the highest proportion of first homebuyers in the market of any of
the states.”
Similar to Perth,
Darwin’s housing market is set for a strong year, building on its
nation-leading performance of 2012.
“Low interest
rates, a strong economy and a shortage of housing driving rent increases is set
to intensify buyer activity and prices growth,” Wilson says.
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Landlord’s right to draw down bank guarantees supported
Posted on Thursday, April 04 2013 at 12:03 PM
A decision in the Victorian Supreme Court has backed the conditional right of a landlord to draw down funds from a tenant-provided bank guarantee.
The
ruling has cleared the way for the landlord to use the funds to restore their
commercial premises.
The
court heard that a dispute had occurred over the condition the property was
left in by the tenant on completion of the lease.
The
claim was also made that the tenant was maintaining occupation of the premises
and was still required to pay rent.
After
the landlord drew funds down from the bank guarantee, the tenant sought an
injunction from the court to prevent the funds being used until after a pending
trial on the matter.
The
court ruled that the landlord was entitled to use the money towards repairing
loss or damage to the property.
The
decision recognised that the bank guarantee was less than the landlord’s
potential claim for damages and they had capacity to pay back the guarantee if
they were ruled against in any subsequent action.
According
to law firm Allens, the decision will make it difficult for tenants to prevent
landlords from using bank guarantee funds if they aren’t acting fraudulently.
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Property values are going up
Property values are going up
Posted on Tuesday, April 02 2013 at 3:40 PM
Capital gains in the March quarter of this year are the highest since May 2010, according to RP Data-Rismark research.
Dwelling values across
Australia’s combined capital cities recorded a 2.8 per cent rise during the
first quarter of 2013.
The RP Data-Rismark
March Hedonic Home Value Index Results indicate
solid increases in March with growth recorded in all capital cities except
Adelaide.
According to RP Data
research director Tim Lawless, the figures reveal good cumulative capital
growth since the market troughed in 2012.
“Since the capital city
housing market bottomed out at the end of May last year we’ve seen dwelling
values rise by 4.7 per cent after falling by 7.4 per cent from their market
peak back in late 2010.
“The most significant
recoveries have been recorded across Darwin where values have risen 13.9 per
cent since bottoming out in January last year, and Perth where values are up
9.4 per cent since the market trough in November 2011.”
Ben Skilbeck, chief
executive officer of Rismark International, says the results are one of the
strongest reported in more than three years.
“Not only were there no
value falls recorded across the capital cities, but, over the past three years,
the ‘all dwellings’ result of plus 1.32 per cent for the month was second only
to the plus 1.4 per cent increase observed in September 2012.”
Skilbeck says investors are
driving the market’s recovery with conditions too attractive to ignore.
“With gross capital city
unit rental yields now at 4.9 per cent, and a number of short-term fixed rate
loans also being offered at these levels, it’s not surprising to see investors
responding to these conditions more quickly than owner-occupiers.”
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Industry welcomes contract law changes in Queensland
Industry welcomes contract law changes in Queensland
Posted on Wednesday, February 13 2013 at 12:19 PM
There was a collective sigh of relief this week when the Queensland Government announced a total overhaul of the legislative framework relating to real estate
In a nutshell, the Property Agents and Motor Dealers Act 2000
(PAMDA) will be repealed and replaced with four new industry-specific pieces of
legislation.
The draft Property Occupations Bill 2013 is
one of the four and aims to simplify the contracting process for the sale of
residential dwellings.
It will also regulate the sale of community
title property.
The changes would mean agents can ditch the
Form 30C warning statement, the rules around which are currently very strict,
according to Allens law firm senior associate Annabelle Aland.
Under the existing legislation, if the form
isn’t viewed and signed first and attached to the front of the contract, the
buyer has the right to pull out of the deal.
In the new bill, it’s proposed that the
seller instead simply insert wording above where the buyer is to sign,
suggesting they obtain independent legal advice and making them aware of any
relevant cooling-off period.
Failure to do this wouldn’t allow the buyer
to terminate the contract on those grounds, Aland says. Instead, the seller
could be subject to penalties.
“These changes will be welcomed by the…
industry, particularly in light of the difficulties faced in enforcing a
contract against a buyer where there has been a minor, technical breach of the
requirements of PADMA,” Aland says.
Stakeholders have until March 8 to provide
feedback on the draft bills.
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First homebuyer numbers to pick up in 2013
First homebuyer numbers to pick up in 2013
Posted on Monday, February 18 2013 at 8:53 AM
More first homebuyers are expected to enter the market in 2013, after subdued results for 2012, according to RP Data.
Research analyst
Cameron Kusher says there were 97,672 housing commitments by first homebuyers in
2012 and although the number was 4.9 per cent higher than in 2011, the result
was “disappointing” when considering the interest rate cuts.
“Given that the
impact of mortgage rate cuts takes time to filter through to the market, we
expect that first homebuyer finance commitments will be stronger throughout
2013,” he says.
“The delayed
impact of cuts to mortgage rates is highlighted by a slightly greater number of
first homebuyer commitments through the second half of the year than the first.
“Given a rise in
home values of the second half of 2012 and the prospect of further mortgage
rate cuts in 2013, these conditions bode well for a further increase in first
homebuyer activity. As to what extent first homebuyer activity increases
remains to be seen, however we anticipate that any further increase is likely
to be fairly moderate.”
On a
month-to-month basis in 2012, first homebuyer finance commitments were
strongest across the following months:
– October (9215)
– May (9110)
– August (8921).
In October, standard
variable mortgage rates were reduced by an average of 20 basis points and in
May they fell by an average of 35 basis points.
“Clearly the
falls in variable mortgage rates over these months resulted in an increase in
activity by first homebuyers. On the other hand, first homebuyer activity
tapered off significantly over the final two months of the year, despite a
further cut to mortgage rates in November.”
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Useless, unusual blocks given second chance
Useless, unusual blocks given second chance
Posted on Tuesday, March 26 2013 at 11:43 AM
Landowners with seemingly useless blocks that are small, irregularly shaped or unable to be connected to services, making them impossible to develop, have been given a second change by the New South Wales Government.
Planning and Infrastructure Minister Brad
Hazzard says thousands of owners of what are colloquially dubbed ‘paper
subdivisions’ could soon be able to sell up or finally build on their blocks.
There are an estimated 10,000 such lots
across the state, many of them on Sydney’s outskirts and in regional pockets.
Most are the result of subdivisions over the years and some date back to the
1800s.
They typically range in size from 200
square metres to 1000 squares and are often irregular in shape.
“When the properties were originally
subdivided, no land was allocated for roads, footpaths or services such as
power and drainage,” Buzzard says. “Many (of these blocks) could provide
housing to cater for our growing population.”
The government will establish a process to
enable landowners to do something with the sites, by having a relevant
subdivision authority propose a plan based on modern, redrawn boundaries.
“If this was agreed to by at least 60 per
cent of landowners and the owners of 60 per cent of the land area, the new
(and) more workable subdivision plan would be adopted, enabling landowners to
take the next step toward building a home or selling their property.”
Feedback received from owners, councils and
local communities last year during a consultation process helped shape the
process, he says.
The first site likely to benefit is
Riverstone in Sydney’s northwest.
“(Sudivision authority) UrbanGrowth is
working with Riverstone landowners to unlock lots about nine metres wide by 61
metres long, with potential for some 1600 low-density residential lots.”
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Why it pays to get a property manager
Why it pays to get a property manager
Posted on Monday, February 18 2013 at 4:43 PM
Positive cash flow property is all the rage at the moment as investors take advantage of low interest rates and, in some cases, booming mining towns.
But high yield does have a catch – many regional and
mining areas have expensive property management fees, starting from 10 per
cent. They might also include things like GST, high admin fees and extra fees
for finding tenants.
However, whatever the cost, property author and millionaire
Jan Somers says paying extra for property management fees will actually save
you in the long run. This is also the case if property management fees in
remote areas are much higher than normal.
“I’ve managed myself and it’s a disaster,” Somers says.
“We managed the first property we owned. It’s not a matter
of organising tradesmen to get the property fixed and it’s not a matter of
negotiating rent. It’s people skills. There’s always going to be something that
goes wrong, the tenant is behind, they want to move out and break the lease.
It’s those kind of things that will cause problems.”
Somers argues the law is structured to support the tenant,
not the landlord. For example, a landlord is required to give a tenant two
months’ notice to vacate the property, yet a tenant only has to give a landlord
two weeks’ notice in Queensland. Somers says unless you have great people
skills and a lot of time, it’s simply not worth the drama and you risk problems
down the track.
In fact, Somers is so convinced self-managing is a bad idea,
she’s even had a property manager for the same tenant, who has been in one of
her investment homes for 19 years. Other tenants have been in properties for
more than 15.
“I could easily just say to the agent ‘we’ll take these on’
as I know the tenant isn’t leaving but it’s not worth the hassle, trying to
keep track about who paid what and when. You need a third party to negotiate
what happens if they get behind in the rent.”
Somers says those looking for a property manager should use
the following tips:
–
Trust word of mouth.
–
Try and find someone who has been in
the business for a long time.
–
Talk to people who have had their
properties managed.
–
Ask the agent how many properties they
manage. If it’s 200, it’s too many, Somers says. Instead, the property manager
should have no more than 150 on their list.
–
Also, make sure the property manager is
proactive.
“A really good one will have a tenant
ready to go in when the last one goes out, others will take a week or two and
that’s money lost,” Somers says.
She adds investors buying property in
areas with high property management fees should try and negotiate their fee.
Also make sure you’re not being charged every time a lease is renewed, she
says.
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More granny flats promised for WA
More granny flats promised for WA
Posted on Friday, March 01 2013 at 2:44 PM
Investors who own property in Western Australia might soon be able to put a granny flat on their block of land, even if they’re currently not allowed to.
WA’s Liberal Party has promised to expand the number of granny flats
throughout the state, if re-elected to government.
The Real Estate Institute of Western Australian (REIWA) president David
Airey says the proposal would help alleviate the tight rental market, provide
more opportunities for low-income earners to live in established suburbs and
also provide property managers with additional work. The changes would also
give investors the option of adding a granny flat and increasing their rental
yield or return on their investment to any given tenant, not just family.
“The proposal by Planning Minister John Day to increase the allowable
floor space of a granny flat from 60 to 70 square metres makes sense, but
better still is the proposal to change to allowable use of these flats to
anybody and not just family members, as is currently the case,” Airey says.
“While I suspect most owners will be likely to manage these granny flats
themselves because they’re in their backyards, there will be opportunities for
property managers to provide a service to owners by advertising vacancies,
checking references and helping select suitable applicants.”
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Body corporate laws to be overhauled
Body corporate laws to be overhauled
Posted on Wednesday, March 20 2013 at 2:02 PM
Legislation governing body corporate schemes and strata-titled dwellings will be reviewed and overhauled, the Queensland Government has announced.
Attorney-General Jarrod Bleijie yesterday confirmed the Body Corporate and Community Management Act is next on his legislative reform hit list.
The government has been working its way through a wider rethink of property-related laws and recently flagged a re-write of the Act overseeing residential real estate transactions.
Bleijie says the review of body corporate laws will incorporate a number of Acts and shape the future of property law in Queensland.
“Public consultation and input will feature as part of the legislative review and the terms of reference, and review processes will be announced shortly,” he says.
“As part of the broader review, we’ll look at how body corporate schemes are determined, community management schemes, dispute resolution and response to the review of management rights.”
The aim would be to reduce red tape, regulation and property law duplication, he says.
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Adelaide tops most liveable city list
Adelaide tops most liveable city list
Posted on Tuesday, March 05 2013 at 8:35 AM
South Australia’s capital has, once again, ranked number one for liveability in the My City: The People’s Verdict report.
The report, prepared by the Property Council of Australia, surveyed 5842 residents across the nation and looked at 17 attributes that define good cities including design, function, services and culture.
The survey encompassed all
capital cities as well as Newcastle, Geelong and Wollongong.
This year’s runner up was
Canberra while the wooden spoon went to Darwin.
Sydney came second last in
the ranking, which is a signal the city’s residents want to see action, according
to the Property Council’s New South Wales executive director Glenn Byres.
“A substantial reform agenda
to deliver big-scale infrastructure projects, unclog the planning system and
lift housing supply is under way.
“But the survey results make
it clear – delivery matters and Sydneysiders will embrace changes that give
them smart growth and a more liveable city.”
The report also shows more
is expected of federal politicians when it comes to investing in infrastructure
and encouraging other levels of government to do a better job of planning
cities.
“In this federal election
year, the onus is on the political parties and local candidates to respond to
the survey with detailed policies to address the growing problems in our
cities.
“Australians have given
their verdict – they want more liveable cities and they know that the
performance of our cities is critical for our future economic prosperity.”
A copy of the ranking is
available via the Property Council’s website at www.propertyoz.com.au/mycity
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