Central Queensland an outperformer for rents
Central Queensland an outperformer for rents
Posted on Tuesday, December 18 2012 at 9:53 AM
Rents in Gladstone, Mackay, Rockhampton, Emerald and Mount Isa trumped other regions and towns across the state in the 12-month period to June 2012, according to the latest Midwood Queensland Investment Report.
In this timeframe, Central
Queensland saw some big surges in residential rents, with Gladstone taking the
cake, the report states.
For one-bedroom flats, Gladstone
saw a 36 per cent increase in rents in the 12 months to the June quarter 2012,
while Emerald followed with a 21 per cent increase and Mackay with 14 per cent.
Two-bedroom flats saw an even
higher result for Gladstone rents, with a 40 per cent surge; Mackay and Emerald
followed behind with a 20 per cent increase, while Rockhampton saw a four per
cent jump.
Three-bedroom houses performed strongly
in the same 12-month period. Emerald saw the highest rent increase in this
category (44 per cent) across the four regional towns, and Gladstone (37 per
cent), Mackay (15 per cent) and Rockhampton (10 per cent) also saw good growth.
Finally, four-bedroom house
rents jumped significantly for Emerald in the 12-month timeframe (55 per cent),
followed by a 38 per cent surge in Gladstone, a 21 per cent climb in Mackay and
a 15 per cent lift in Rockhampton.
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Victoria on the attack over land tax, stamp duty
Victoria on the attack over land tax, stamp duty
Posted on Tuesday, December 18 2012 at 2:52 PM
Federal Treasurer Wayne Swan has copped a lashing over his calls on state governments to abolish stamp duty.
A war of words erupted following a meeting
of state treasurers hosted by Swan in Canberra yesterday.
Victorian Treasurer Kim Wells issued a
scathing statement claiming it’d been suggested by Swan that an increase to
land tax could cover the stamp duty shortfall.
Wells described the plan as “bizarre” and
claims it would triple land tax and put the burden squarely on homeowners.
“The Victorian Government is willing to
engage in a debate about tax reform but I’m disappointed the Commonwealth isn’t
interested in a genuinely national effort.”
Earlier in the day before the meeting, Swan
told reporters any changes to stamp duty were entirely up to state governments.
“They’ve agreed to go through a process
themselves of looking at future tax reform at a state level and that’s entirely
a matter for them.”
He claimed the states were lobbying for a
GST rate increase, a suggestion he described as a “lazy” version of tax reform.
Wells described that claim as misleading.
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Beware the lure of cheap fans this summer
Beware the lure of cheap fans this summer
Posted on Thursday, December 20 2012 at 9:55 AM
As temperatures soar across the nation, beware bargain-priced ceiling fans because chances are the savings made could end up costing more in the installation and life of the product, according to Master Electricians Australia.
It’s that time of year when tenants plead for ceiling
fans and investors take advantage of post-Christmas sales to grab a ceiling fan
for one or more rental properties.
But beware of just selecting the lowest-priced fan, warns
Master Electricians Australia chief executive officer Malcolm Richards.
“We’ve seen a number of issues with certain products
coming to the market that have not been following the safety standard process,”
Richards says.
“Unfortunately even many of the reputable dealers
such as Woolworths, Big W and Masters are recalling electrical products as a
result. The website www.recalls.gov.au is where consumers can go to and see if the fan
they’re looking at has been recalled.”
The other issue is buying a cheaper fan, then having
to pay more when the electrician installs it, he adds.
“This is because some fans come pre-wired and others
don’t,” he says.
“Quite often it’s the cheaper ones that don’t come
pre-wired.”
He explains that what this means is the electrical
contractor needs more time to wire up the fan, which means more time charged to
the property owner.
“Often it might be only an extra 10 minutes of time,
but the extra cost charged could eliminate the saving made in the first place.
It might also mean that if this was known at time of purchase then perhaps a
better quality fan may have been selected,” Richards notes.
“That’s the other issue: how long will the fan last?”
he adds.
“A fan should last 25 years but unfortunately some
are only lasting six months.”
For this reason, Richards adds that consumers should
also be checking the warranty period.
The safest way to be guaranteed of buying a
long-lasting fan is to purchase it from an electrical contractor, Richards
says. “That way if the fan breaks down in the warranty period the manufacturer
is required to pay for an electrician to reinstall a new one.”
“Sorting out the quality from the rubbish is often
the job of the electrical contractor… other retailers will try to exhaust the
product,” he adds. “And while the electrician
is there, get the safety switch upgraded.”
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Rate cuts designed to kick-start non-mining sectors
Rate cuts designed to kick-start non-mining sectors
Posted on Tuesday, December 18 2012 at 4:27 PM
The motivator behind the Reserve Bank’s decision to cut rates earlier this month was continued sluggishness in non-mining industries.
Minutes from the December meeting released
today show the central bank’s board is making a concerted effort to jumpstart
sectors like housing construction and retail.
The official cash rate was slashed by 25
basis points to three per cent; only the second time in history it has reached
this point.
China’s economy looks to have stabilised
and the US economy continues to grow at a reasonable pace, the board was told.
The meeting also heard that inflation looks
set to remain low and contained.
“At the meeting, the information on labour costs
and softening labour market conditions suggested the inflation outlook still
afforded the board some scope to provide additional support to demand,”
the minutes say.
Economists have tipped further rate cuts throughout
2013, with the ANZ going as far as tipping reductions of up to one per cent.
The next meeting of the board will take
place in February.
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Signs of improvement for NSW, ACT and WA property markets
Posted on Thursday, December 13 2012 at 11:26 AM
Residential property markets in New South Wales, the Australian Capital Territory and Western Australia are demonstrating strong signs of improvement with mortgagee in possession valuations on the decrease, according to Herron Todd White (HTW).
HTW’s in-house valuation records demonstrate a
decrease in demand for mortgagee in possession (MIP) valuations across three
states/territories this year, while the rest of the nation is still just a
little behind.
Queensland has seen an increase of only two per cent
in MIP valuations, demonstrating it has held relatively steady, while the
Northern Territory and South Australia saw the largest national increases in
MIP valuations (75 per cent and 72 per cent respectively).
While still a
significant increase, Victoria saw a slightly smaller rise (43 per cent) in MIP
valuations compared to the NT and SA, and Tasmania saw a 24 per cent rise in
MIP valuations.
HTW’s Paul Gates says that nationally,
over the past three years, an increase has occurred in the percentage of
valuations required to support a purchase of the valued property “with only
NSW, ACT and SA against the trend”.
Valuations aren’t always required on
property purchases, particularly when a buyer has a solid cash or equity
position, so what this could indicate is that traditionally cashed-up property
buyers have shied away this year.
Gates says compared to the national
increase in valuations for property purchases in 2012, a reduction in refinance
and ‘upstamp valuations’ (when borrowers pay a higher stamp duty to increase
borrowings with the same lender, say, for a renovation) has been observed, due
to what has probably been “a general reluctance by homeowners to increase their
borrowing levels” on an already purchased property.
WBP Property Group’s Victorian residential valuations
manager Brendan Smith says it’s been an interesting year for property
valuations, with 2013 looking much rosier as sales transactions pick up the
pace and provide valuers with more transactions for comparison purposes.
Unlike HTW, WBP Property Group anecdotally reports a
pick up in refinance valuations in 2012, due to what Smith says is the result
of property owners looking for better finance deals at a time when saving some
dollars has become particularly important.
Smith says a rise in mortgagee in possession
valuations have also been noticeable across most of the nation this year, but
that could also have something to do with the total volume of valuations having
increased over 2012 for a handful of larger valuation companies due to
consolidation and mergers happening in the valuations sector.
He adds that some lenders have consolidated their
valuation supplier list, preferring to deal with mostly larger valuation
companies to minimise their risk exposure.
At a more micro level, in the auction state of
Victoria, demand for renovation finance valuations has seen a slide, “though
pre-sale valuations have seen a surge from potential buyers, to ensure they’re
going to auction with more certainty of the price they’re willing to bid on”,
Smith says.
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Homebuyer confidence rises; 2013 outlook is promising
Posted on Friday, December 14 2012 at 1:43 PM
The number of Australians who believe it’s a good time to buy a home surged 11.5 per cent over the December quarter, reaching highs not seen in three years.
CommSec chief economist Craig James says the
Westpac/Melbourne Institute’s latest index shows more people are keen to park
their money in bricks and mortar.
“Real estate was regarded as the second
wisest place to put new savings, with that reading just below seven-year
highs,” James says.
Housing finance commitments slid slightly
by 0.2 per cent in October, new data shows, but total home lending for the year
is up four per cent.
Loans for land blocks rose by 17.5 per cent
over 2012, which is the strongest pace of growth in three years.
“All the pointers suggest there are better
times ahead for the housing market, representing good news for builders,
tradespeople, material suppliers and a raft of retailers.”
On the wider economy, James says there’s
good momentum moving into the New Year.
In particular, forecasts for the resources
sector show Australia is set to “reap extraordinary earnings” over the coming
year. James says the outlook is far brighter than the “doom and gloom school
would have you believe”.
Export volumes are predicted to increase substantially
and the reason for a forecast drop in export values is due to the drop in
commodities prices.
While general consumer sentiment fell by
0.2 points to 100 on the index, loans to buy new or used cars hit a record 1.23
billion in October.
James says the drop is disappointing at
first glance but digging deeper shows “sharp divisions across the country” are
to blame.
“In short, conditions are very mixed and
how you feel depends on where you live and your housing status,” he says.
He believes the data suggests the Reserve
Bank may opt to stay on the interest rate sidelines in the early part of 2013,
preferring to see how the economy responds to rate cuts.
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Property owners set to benefit from proposed King Island wind farm
Posted on Wednesday, December 05 2012 at 4:18 PM
Property owners with a turbine lease to sign would be most likely to benefit if the $2 billion wind farm on King Island goes ahead, according to buyers’ agent Rob Zubin of My Property Hunter.
Last week the Tasmanian Government announced the
potential for the construction of a 200-turbine wind farm covering 12 to 15 per
cent of the western side of small King Island, in the path of the Roaring 40s
(strong westerly winds).
Typically known for its high-quality cheese
production, King Island would see 500 jobs during the two-year construction
phase of the wind turbine project and 10 to 20 permanent jobs.
A minimum of 240,000 homes would be powered from the
wind energy generated and $220 million is estimated to flow into the Tasmanian
economy, Tasmanian Premier Lara Giddings says.
Spinoff construction jobs would also likely be
created to upgrade roads and port infrastructure, providing a catalyst for
growth of new industries, Giddings adds.
Housing construction would be added to that list due
to strong rental demand, Rubin says, despite the construction phase likely to
be a short two-year timeframe from 2017 to 2019.
Those most likely to reap the benefits
are the existing landholders on the western side of the island who sign a
long-term lease with the energy companies. Perhaps that’s where the most
profitable deals will be if this project moves ahead, rural and commercial
valuer Chris Ryan of Opteon Property in Portland, Victoria, says.
Ryan’s regional base of
Portland is a town that, in recent years, saw wind turbine construction start
and finish in about two years.
He says property price rises
weren’t evident, only falls of up to 40 per cent on agricultural land in
particular since 2008, but that’s because the dairy industry has been going
through a major downturn simultaneously so it has been hard to gauge what the
wind farm’s impact really was on the town.
“I’m sure it has had a beneficial effect,
though it’s the large landholders who’ve leased their land to energy farms for
the wind turbines who have cashed in the most. I’ve heard it’s a good little
source of cash at around $7000 per turbine…” Ryan says.
The wind turbines don’t seem to have
devalued agricultural properties in the short term, he adds, probably because
of the long-term land lease that comes with the sale of a farm, something
that’s considered a perk.
He adds that the wind turbine leases
might actually boost the value of an agricultural property.
Residential blocks are another story, Ryan
adds. “A valuer down in the Gippsland area has reported that if located within
a short distance of a residential property, impacting the visual scenery,
residential prices have been noted to experience decreases of 10 to 15 per
cent.”
Community forums are currently under way and a
decision to proceed to the full feasibility stage will be known by April next
year.
Rubin says the main impacts the
development would have is improving economic confidence in Tasmania and on King
Island, particularly after the island community recently lost its abattoir and
has struggled with escalating shipping costs as a result of the closure and
reduced economy of scale.
“It would be a fantastic economic
injection for the island and because it’s such a small property market something
of this scale would create a mini boom in housing demand,” Rubin says.
Despite the “mini boom” a project of this
scale would have on the King Island market, Rubin puts it “on par with
investing in a high-risk mining town”.
Even the government has stated its
construction phase would only be around two years, he adds.
“In the short term houses will be built
and rents will increase – then it will fall back to normal prices once the
project is over.
“I wouldn’t consider it a balanced
market,” Rubin says. “When most of our clients are looking for balance of
growth and return supported by economic diversity, well, King Island just
doesn’t fit that mould.
“There’s really not a great deal of
economic diversity on King Island…there may be a sharp incline for a short
period but long term it doesn’t have that economic diversity most investors
would look for, though some high-risk investors might find the short-term
growth appealing.”
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Australia’s property sector should get set to woo China
Posted on Friday, December 07 2012 at 3:03 PM
Can you hear that? It’s a wave of Chinese investors about to inundate the Australian real estate sector with billions of dollars.
Chinese insurance companies have just made
public their long-awaited updated regulations surrounding investment in
overseas assets.
The changes allow the country’s insurers to
significantly expand their offshore holdings, and Australia is set to benefit.
Under the new rules, Chinese insurers can
invest up to 15 per cent of their total assets in overseas investments. It’s
been estimated that such companies had the equivalent of more than $900 billion
(Australian dollars) in assets.
Sian Sinclair, head of real estate and
construction for Grant Thornton Australia, believes the opportunity should be
carefully nurtured.
There’ll be tough competition, with the
relaxed regulations opening investment to 45 world markets in a range of asset
classes.
“The key will be actively marketing to
these investor groups as we’re competing with strong markets including the UK, US and
so on,” Sinclair explains. “They’re already vying for Chinese investment
dollars. We’re working closely with our China firm to identify opportunities.”
The form of direct investments allowed in real estate
remains restricted to mature commercial and office property with stable income
located in ‘core areas’.
According to Sinclair, Australia can expect to see
increased interest from China investors in established commercial sites in our
larger capital cities.
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Unit and townhouse sales bonanza in Queensland
Unit and townhouse sales bonanza in Queensland
Posted on Friday, December 07 2012 at 1:03 PM
Sales of units and townhouses in Queensland soared by 40 per cent in the September quarter, according to analysis by the Real Estate Institute of Queensland (REIQ).
Activity in this segment of the market is
now up 14 per cent on the same period last year, REIQ chief executive Anton
Kardash says.
According to a report released by the group
today, there was significant activity at the cheaper end of the scale.
“More than 800 preliminary sales were
recorded for properties priced under $250,000, which is a very affordable price for many
buyers,” he says.
“The greatest numbers of sales were in the $250,000 to
$350,000 price bracket, which recorded about 1250 preliminary sales over the
quarter – also an increase on last year.”
There was a noticeable shift in demand for cheap
units and townhouses in Cairns and the Gold Coast over the September quarter,
with both regions enjoying significant jumps in transaction volumes for
properties under $250,000.
In Brisbane, the unit and townhouse median
price increased 0.6 per cent to $405,000.
“Brisbane’s median unit price edged up 0.3
per cent over the year, which is a welcome result and one we hadn’t witnessed
for a year or two now,” Kardash says.
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Borrowers don’t pay more when banks hold back on rate cuts
Posted on Thursday, December 06 2012 at 2:55 PM
The Australian Bankers’ Association (ABA) has leapt to the defence of lenders who don’t pass on official rate cuts in full, claiming it makes no difference.
Steven Münchenberg, the group’s chief executive, says comments by the Reserve
Bank of Australia (RBA) confirm borrowers don’t pay more when banks hold back
on rate cuts.
“Once more, the RBA has made this point clear.
Mortgage rates today are broadly where they would be, regardless of whether
banks pass on rate cuts in full or not.”
He points to comments made Wednesday by the RBA’s Deputy
Governor Philip Lowe, who says banks’ funding costs have risen relative to the
cash rate.
“As we’ve noted many times, the Board of the RBA has
taken account of this in its monthly policy decisions,” Lowe told a business
conference.
“As a result, the cash rate today is around one and a
half percentage points lower than it otherwise would have been. The fact that
the Bank has offset the effect of higher funding costs on lending rates means
that the normal level of the cash rate is lower than it otherwise would have
been.”
Münchenberg believes it’s
“fallacious” to conclude that borrowers pay more when lenders don’t pass on
cuts in full.
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