Sydney’s best years are ahead

Posted on Friday, June 15 2012 at 2:56 PM

Have you ever dreamed of owning a pad close to the Harbour Bridge and Opera House?

Perhaps you’d
prefer something a little closer to one of the world’s most beautiful beaches,
at Bondi in the east? Or what about the more affordable west, where strong
yields will help you pay for the property? Wherever you decide to buy in
Sydney, good things are expected from Australia’s leading city.

Trend forecaster
for KPMG, Bernard Salt, says Sydney has a solid outlook.

“Put simply,
Sydney is a big global city with critical mass in key infrastructure as well as
corporate depth. Sydney’s best years lie ahead,” he says.

“Part of the
reason behind Sydney’s resurgence is resolution of state governance issues and
that simple fact that this city remains the Australian portal of the global
economy. Sydney has the most head offices and Australian offices of overseas
businesses.”

Salt adds Sydney
also attracts more people every year than Melbourne and has reduced interstate
migration since the global financial crisis (GFC).

“New lifestyles,
new ethnicities and new social behaviours are likely to drive demand for
well-positioned investment property, rather than lifestyle properties, in the
inner and even middle distance suburbs.”

WBP Property
Group NSW manager Chris Lackey agrees, adding the west seems to be doing better
than the north.

“Pittwater (in
the north) is a market that was hit hard by the GFC and has never really
recovered, representing a poor or risky investment. The inner-western market is
very resilient. To be holding its ground in the current market is a very
positive sign for strong capital growth potential.”

Another positive
for Sydney is the doubling of the First Home Owners Grant for new homes,
although it comes at the expense of established homes, Lackey says.

“This is good
news for first homebuyers who have previously found the new home segment
unaffordable in Sydney. It will also stimulate the housing and construction
sector, which forms such a critical part of the state’s economy.”

Article source: http://feedproxy.google.com/~r/API_Property_News/~3/GH0vFf1vpIo/sydneys-best-years-are-ahead

REIQ cries foul over Queensland finances audit

Posted on Friday, June 15 2012 at 5:15 PM

The release of an interim audit of Queensland’s finances has recommended a number of cost-saving measures that have drawn the ire of the Real Estate Institute of Queensland (REIQ).

Former Federal Treasurer Peter Costello has
spent two months examining the state’s books, and on Friday detailed a first
draft of his findings.

He warns state debt is set to climb to $100
billion by 2019 unless action is taken. Some possible measures include asset
sales and public service cuts, but it’s a number of “imposts on property
investors” that has the REIQ up in arms.

Some of the property related measures
include a $100 levy on all property owners, reducing or cutting the concession
on land tax, applying a premium transfer duty rate and hiking the landholder
acquisition duty rate.

The REIQ’s acting chief executive Antonia
Mercorella says property owners are “sick and tired of having to bail out the
government”.

Queensland Treasurer Tim Nicholls
immediately ruled out the $100-per-property levy, but said other
recommendations in the report will be considered.

Any further burdens on investors will see
them “pull up stumps” and leave the state, Mercorella warns.

“Property owners and investors specifically
seem to forever be targeted by all levels of government when they’re short of
cash. Whether it’s through higher council rates, one-off levies or higher rates
of stamp duty.”

Figures show investor activity in
Queensland has halved in the past five years. Slugging them with additional
costs will see a further retreat, she says.

“We’re starting to see the impact of this
reduced investor activity, with vacancy rates tightening and rents increasing
across the state.

“If more investors left the rental market,
this situation would undoubtedly worsen.”

The government will confirm which
recommendations it’ll adopt when it hands down the State Budget in September.

Article source: http://feedproxy.google.com/~r/API_Property_News/~3/i0oYr3aNCqc/reiq-cries-foul-over-queensland-finances-audit

NSW Budget more than doubles first homebuyer grant

Posted on Tuesday, June 12 2012 at 3:23 PM

From October 1, New South Wales’ first homebuyers will be given $15,000 to spend on a new home – more than double the current incentive – and non-first homebuyers will be given $5000 to secure a new home, according to the NSW Government Budget 2012-13 handed down today.

NSW Treasurer Mike Baird likes
to call the new incentives “the most generous first homebuyer scheme for buyers
of new homes in Australia”.

Under what has been labelled the
‘Building the state package’, the $15,000 first homebuyers’ grant for new homes
has been promised until 2014, when it will drop down a notch to $10,000.

Also in the package announced
today, the NSW Government has committed to continue stamp duty concessions for
first homebuyers of new properties priced up to $650,000.

The NSW Government said for a
new property priced at $550,000, first homebuyers would be given $35,240 in
benefits (a combination of stamp duty concession and first homebuyer grant),
$19,245 more than the existing scheme.

Housing construction will be
further boosted, with $481 million committed to infrastructure in new housing
areas.

Baird said the first $181
million of this new funding would facilitate the development of up to 76,000
new dwellings.

Also committed is $30 million to
the Local Infrastructure Renewal Scheme, on top of the $70 million already
committed, to build $1 billion of new local infrastructure.

Article source: http://feedproxy.google.com/~r/API_Property_News/~3/ZORadXGrrak/nsw-budget-more-than-doubles-first-homebuyer-grant

Mortgage sales at highest level in three years

Posted on Tuesday, June 05 2012 at 3:23 PM

Falling interest rates are bringing more property investors back to the market, according to mortgage broker Australian Finance Group (AFG).

The company
processed more home loans in May (more than $3 billion in one month) than in
any month since March 2009.

Western Australia
led the way, with home loans hitting an all time high of $683 million. This was
second only to New South Wales ($812 million), with Victoria ($641 million) and
Queensland ($627 million) trailing behind.

General manager
of sales and operations, Mark Hewitt, says rate cuts are helping but that’s
only part of the story.

“May is generally
a stronger month, after the public and school holidays in April,” he says.

“We’re probably
also seeing more borrowers turn to brokers to help them get the best deal in an
increasingly competitive and complex market.”

AFG adds the
higher amount of loans conflict with softening house price data and fixed rate
home loans remain near all time highs (19.7 per cent of loans), which confirms
continued borrower uncertainty.

“Reduced property
prices and interest rates are bringing more people back into the market, but
anecdotally, many potential borrowers are still worried by both offshore news
as well as conditions at home.”

Article source: http://feedproxy.google.com/~r/API_Property_News/~3/rZ4ZXXkKayo/mortgage-sales-at-highest-level-in-three-years

It’s getting easier to afford property

Posted on Thursday, June 07 2012 at 11:26 AM

It’s becoming easier to invest in property or pay down mortgages, according to the Real Estate Institute of Australia (REIA).

President Pamela
Bennett says the REIA/Deposit
Power Housing
Affordability Report shows housing affordability improved over the
March quarter.

“Housing
affordability has been improving for the past three quarters,” Bennett says.

“If other factors
continue to trend in the same direction, the interest rate cuts in May and
those announced in June should bring further good news for housing
affordability next quarter.”

The March quarter
report shows that nationally, the proportion of family income to meet loan
repayments decreased by 0.9 per cent, compared to the previous quarter, and now
sits at 32 per cent.

Rental
affordability has also stabilised, but the proportion of income required to
meet weekly rent repayments is still well above the longer-term average.

Article source: http://feedproxy.google.com/~r/API_Property_News/~3/6oa86wdprWI/its-getting-easier-to-afford-property

NT developers cash in on rising rents

Posted on Thursday, June 07 2012 at 9:53 AM

As the Darwin and Palmerston rental markets continue to tighten further, placing upward pressure on rents, many developers are shifting their new housing from a sales listing to a rental listing for a stronger return, according to LJ Hooker Darwin’s Robert Higgins.

In the RP
Data-Rismark May Home Value Index,
Darwin topped the gross rental yield list at an impressive six per cent for
houses and 5.9 per cent for units, firming up its number one ranking above all
Australian capitals for gross rental yields.

In the same
month, Darwin housing prices continued to underperform – the May index
demonstrates that house prices fell for the month by 2.4 per cent, the second
largest fall across capitals, following Melbourne.

What this
all indicates is that rental vacancy rates are tightening and rents are rising,
so the rental market appears the more desirable option for developers right
now, as they wait for the sales market to surge again. At least that’s Higgins’
rationale.

Buyers
agent Tod Peterson of Peterson’s Property Search said what these figures also
indicate is that developers are struggling to sell their new housing stock at
the moment because “that market is oversupplied”.

He doesn’t
doubt that the rental market is very tight though. “From a landlord’s
perspective it looks great but from a tenant’s perspective it doesn’t look
crash hot. Tenants will on average currently spend eight to 10 weeks to find
something decent that ticks all the boxes. Prices are also rising. On a two-bedroom
unit, last year a tenant may have paid $500 per week, this year it’s likely to
have risen to $570 per week.”

Peterson
bought a unit off the plan for a client last year for $500,000 and it now rents
for $590 per week.

Darwin and
Palmerston are in the grip of an accommodation crisis, driven by major projects
in and around the Darwin Harbor, said Higgins.

“Since late
last year we have already seen a significant rise in rents, particularly around
the low to middle rental brackets. Many developers have taken advantage of this
situation in different ways by retaining properties previously for sale and
renting them instead,” he said.

“In the
Darwin CBD one developer had significant stock in two recently completed
buildings still for sale, and has since taken these properties off the sales
market, now targeting serviced short-term rentals and executive leases.

“Another
developer in the Parap area who has taken his properties off the market is now
targeting bulk rental situations for companies that need new and secure
accommodation for their workers. This situation extends right out to Palmerston
where another developer has offered to those investors that have already
purchased in his complex to lease their units back with their authority – so
sub-lease the apartments out – giving the investors a guaranteed income, and
the developer an opportunity to capitalise on the current rental market.”

Higgins
said with bank lending for developers still tight it’s unlikely that many
larger residential developments will get off the ground over the coming couple
of years, even though the demand exists to service it. “What you will see is a
lot more small to medium size developments in the suburbs surrounding the CBD,
that is if the developers release them for sale to the public rather than keep
them as rental stock for themselves.”

The Darwin
market is “swings and roundabouts”, said Peterson. “Soon enough prices will
catch up again.”

Article source: http://feedproxy.google.com/~r/API_Property_News/~3/QGl9SVbgAtk/nt-developers-cash-in-on-rising-rents

More land needed in Port Hedland

Posted on Monday, June 04 2012 at 2:35 PM

The lack of affordable housing in the mining towns of Karratha and Port Hedland is killing the prospects of growth in northern Australia, according to John Shipp, director of the ANDEV/IPA North Australia project.

It comes after
Landcorp released just 40 allotments of Crown land in Port Hedland last year.

“Port Hedland is
facing a housing affordability crisis and Land Corp simply isn’t doing enough
to counter it,” Shipp says.

“Karratha and
Port Hedland have an estimated housing shortage of 1531 and 1402 dwellings
respectively and I think that’s a low-ball figure because it doesn’t factor in
latent demand.

“In a town where
housing is in such hot demand and local renters are being forced out of town,
far more Crown land should be released for development.”

As of September
2011, the average three-bedroom house in South Hedland sold for around $700,000
and weekly rent on the same dwelling had grown to $1700 per week. Shipp says
releasing more land would encourage more permanent settlement and less fly-in,
fly-out (FIFO) labour.

“FIFO only makes
sense because it’s cheaper to fly to Karratha than live there,” Shipp says.

“If you want to
encourage permanent settlement and discourage FIFO, start with land release.”

Article source: http://feedproxy.google.com/~r/API_Property_News/~3/2y33lgZ7WgM/more-land-needed-in-port-hedland

WA Budget indicates robust growth ahead

Posted on Thursday, May 31 2012 at 11:11 AM

In the 2012-13 Western Australian Government Budget paper handed down almost two weeks ago, a healthy 6.7 per cent growth in property prices has been estimated for the coming financial year, with sustained increases ahead.

The WA Budget
paper’s economic forecasts for 2012-13 reports the established house price index
to jump from -2.5 per cent annual growth in 2011-12 to a mighty 6.7 per cent
for 2012-13, higher than the consumer price index estimate of 3.5 per cent per
annum and the wage price index estimate of 4.5 per cent per annum.

The Budget
paper also indicates increasing transaction volumes toward a long-run trend.
The paper reports an estimated 17.6 per
cent growth for transfer duty in 2012-13.

Beyond 2012-13
transfer duty is estimated to be approximately 9.6 per cent per annum, though
the paper states these estimates are still lower than the duty raised in
2006-07 and 2007-08.

Rental growth
is looking good for WA landlords, with rental vacancy rates continuing to
tighten, decreasing to 2008 levels. The Budget reports Perth’s average weekly
rent has increased by eight per cent from last year to $400 per week this year.

More WA
landlords are likely to receive higher land valuations in 2013-14, a reflection
of the pick-up in the housing market in 2012-13; the Valuer General estimates
land tax to return to the long-term average of 10 per cent per annum.

When comparing
this 10 per cent increase in land tax growth to the 6.7 per cent increase for
the established house price index, what this means is a higher proportion of
investors compared to owner-occupiers will return to the market because
naturally only investors pay the land tax, said Gavin Hegney of Hegney Property Group.

When combining
all the Budget paper indicators including the strong labour market, the housing
picture it paints is a very bright one, said Hegney. “We’re clearly ahead of
the other states in the cycle. We have very strong business investment, a
strengthening labour market, a lowering unemployment rate and now we’re seeing
upper pressure on wages; all that flows through to house price growth.

“Stepping
back from the numbers though, people are gaining confidence again in Perth. It
looks like we’re in for some robust growth ahead,” Hegney said.

Article source: http://feedproxy.google.com/~r/API_Property_News/~3/YaFVm4RRLaA/wa-budget-indicates-robust-growth-ahead

Routine property inspections help keep rentals profitable

Posted on Thursday, May 31 2012 at 12:50 PM

Property inspections should be routinely undertaken throughout the lease to maintain a profitable and protected property, according to landlord specialist Terri Scheer Insurance.

“Firstly, it’s important to
ensure you’re familiar with legislation relating to conducting property
inspections in your state,” said Carolyn Majda of Terri Scheer Insurance.

The first inspection should be
undertaken when the tenant enters the property and should be completed by the
tenant and the landlord/property manager, said Majda. “Use the form to accurately record the condition of the premises,
documenting any wear and tear, cleanliness and the working order of fixtures
and any household items you have left for the tenant to use.”

Majda said the more detailed
the reports are, the better, “so take as many photos and videos of the property
as you can”.

“Your tenant should then be
given a copy of the report for them to review and sign accordingly if they
agree with its contents,” she said.

Handing a welcome pack to the
tenant before he or she moves in, containing the lease agreement, a copy of the
entry condition report that has been completed by the landlord/property manager
and information about follow-up inspections throughout the tenancy is a good
way to set tenants off on the right foot, said Majda.

Following the initial
inspection, a routine inspection should be done every three to four months,
Majda said. “Ongoing inspections can make it easy for landlords to quickly identify
if and when any damage to the property has occurred and if there are any
maintenance issues that may need attention.”

Tenants must be given seven to
14 days notice before the inspection; landlords/property managers must also
advise the tenant that he or she isn’t required to be present for the
inspection, however if any maintenance is required to leave a list of specifics
at a convenient place in the house – often on the kitchen bench.

“Plan to conduct the inspection
in between the hours of 8am and 7pm, and take a copy of the tenancy agreement
with you so you can refer to it if any repair or maintenance issues arise,”
said Majda.

“When inspecting the property,
ensure the property is clean and that there aren’t excessive amounts of rubbish
stored within its perimeters.

“Take photos and video footage
of any malicious or accidental damage you notice at the property, as
comprehensive evidence may be required if you make an insurance claim.

“Injury or loss resulting from a
safety hazard that hasn’t been attended to may give rise to a costly legal
liability by the tenant, so check that all smoke alarms and security locks are
in working order and that gardens are safe to reduce the risk of harm.

“In some states, certain
appliances such as air conditioners and water saving devices are mandatory for
rental properties, so make sure you also monitor them during inspections so
they can be repaired before any penalties are imposed.

“The inspection should then be
documented in a report, and a copy should be given to a tenant.”

When the lease ends, there
should be one final check on tenant departure, Majda said. “If all the
conditions of the tenancy agreement have been met by the tenant and the
property was left in good order, the bond should then be returned to the tenant.

“Outgoing condition reports with
supporting photos and videos can be used as evidence if there are any
outstanding issues at the end of the lease and you decide to retain the full or
part of the bond.”

Article source: http://feedproxy.google.com/~r/API_Property_News/~3/RdULghZaaC0/routine-property-inspections-help-keep-rentals-profitable

Why two cars can be two too many

Posted on Monday, May 28 2012 at 3:29 PM

Most couples and families can’t handle the thought of living without two cars and instead coping with one or perhaps even worse – catching the slow bus or the noisy train.

But if you’re
trying to get ahead when it comes to property investing, you could be making a
huge mistake. Lots of people try and cut back on spending or make an effort to
save a deposit. Have you considered selling a car though?

Property
millionaire and creator of Somersoft, Jan Somers, says couples who sell one car
can probably borrow another $100,000. This is because when you apply for a
loan, the bank will look at all your expenses and a car costs about $7000 per
year, including petrol, registration and insurance.

However, if you
borrow $100,000 at an interest rate of seven per cent, the interest on that
loan would also be $7000 – the same as a car.

“You don’t need
to rely on a second car these days and it will depreciate by a few thousand
every year anyway,” Somers says.

“It doesn’t take
much to spend $7000 on a car and you don’t get anything for it.”

Somers adds many
people often buy a property further out of the city centre because it’s much
cheaper. But if you buy in the outer suburbs, there’s less public transport and
you’ll actually rely more on a second car. On the other hand, if you spend an
extra $100,000 on a property closer to the city, you could sell your car and
use public transport instead.

“If you buy
something closer to the city, you won’t need the second car. You should get
something closer in, where you won’t need that car, otherwise it creates a
false economy.

“Take the bus and
buy something with potential for capital growth, which will probably be close
to public transport. Years ago I would have said ‘buy anywhere’ but I now think
being close to public transport is more important.”

Article source: http://feedproxy.google.com/~r/API_Property_News/~3/bmVPtQUHskY/why-two-cars-can-be-two-too-many