Monthly Archives: April 2015

Urban Land Supply Report & CommSec SOST 30-4-2015

Urban Land Supply Report. The release of new residential housing lots is currently undergoing an historic boom across most of Australia’s largest cities, according to the findings of a new report on urban land supply recently released by the Urban Development Institute of Australia (UDIA). The 2015 UDIA State of the Land Report has found that the number of new greenfield residential lots released for sale nationally in 2014 increased by a massive 31 per cent relative to 2013. Departing from previous years’ reports, the 2015 UDIA State of the Land has been undertaken in partnership with Charter Keck Cramer and Research4, utilising data from the National Land Survey Program (NLSP), which adds additional consistency and depth to the report. “The NLSP data highlights that Melbourne and South East Queensland led the way in new residential land supply being made available to purchasers in 2014, with new lots released increasing by 61 per cent in Melbourne, and 55 per cent across South East Queensland,” said Charter Keck Cramer Director, Robert Papaleo. “Sydney also experienced a strong 29 per cent increase in new lots released, although Adelaide experienced a small decrease in greenfield releases.” UDIA National President Cameron Shephard said that whilst the lift in new lots released was great news for new home buyers and the development industry, it was not an excuse for governments to be complacent about new housing supply. “The increased activity identified in the 2015 State of the Land Report is great for the Australian economy, housing affordability, and jobs in the construction industry, but in many ways it has masked a number of underlying problems with Australia’s housing market,” he said. “Nationally, Australia still suffers from a marked undersupply of new housing stock, caused by inadequate investment in urban infrastructure, slow planning and approvals systems, and high taxes and charges on new housing supply. “Even now, we’re still not building enough new homes to meet underlying demand.” “Whilst low interest rates and strong market conditions have helped to create the current uplift in new lots released, these conditions won’t last forever.” “What’s really needed is for governments to take action to remove the underlying structural barriers to new housing supply,” he concluded.
Australia’s Economy and the Property Market. The quarterly CommSec State of States report assesses key indicators to establish the performance of the states and territories. Let’s take a look at how the states and territories are currently shaping up across a range of factors. Economic growth: The Northern Territory is continuing to lead Australia’s economic activity, sitting at just under 45 per cent above its ‘normal’ decade average. This region also has the fastest annual growth rate in the nation, up 3.2 per cent. The next strongest state for economic growth is Western Australia, sitting at 26 per cent above the decade average, followed by the ACT which is up by 15.2 per cent. Both Tasmania and South Australia are seeing modest rates of less than 1 per cent above decade averages. In terms of retail spending, New South Wales has seen the strongest growth being up by 6.3 per cent, followed by Victoria which is up 4.1 per cent and Tasmania with an increase of 2.4 per cent. Construction: Construction work is sitting higher than decade averages in six of the states and territories. The Northern Territory was up almost 171 per cent, followed by Western Australia (33.4 per cent), Queensland (10.7 per cent) and New South Wales (10 per cent). Tasmania is now sitting at 4.7 per cent below the decade averages and the ACT are just scraping by at 0.2 per cent. Population: Annual growth has eased in all states apart from the Northern Territory. Western Australia is looking the strongest with an annual growth rate of 2.12 per cent, however this is trending at 20.3 per cent below decade-average levels. Victoria came in second with a growth of 1.77 per cent, followed by New South Wales at 1.43 per cent. Tasmania has seen the strongest growth rate in 2.5 years at 0.64 per cent. Unemployment: The latest unemployment rates are above their decade averages across all states and territories. Northern Territory has retained its position as the nation’s strongest job market with an unemployment rate of 4.3 per cent, followed by ACT at 4.4 per cent and Western Australia on 5.7 per cent. Tasmania’s unemployment figures appear to be on the improve with the jobless rate falling to a 39 month low of 6.5 per cent. Housing finance: Victoria has taken over the top spot in Australia for housing finance with commitments at 11.5 per cent above the long-term average. Next were New South Wales on 10.4 per cent and Western Australia at 5.5 per cent. Northern Territory remains the weakest market for housing finance with commitments 23 per cent below its decade average. The next weakest was South Australia down 13.7 per cent and Tasmania at 10.8 per cent below its decade average.

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Renovating could make you a lot of money, but there are potential dangers for the unwary.

Renovating could make you a lot of money, but there are potential dangers for the unwary.

These include:

1. Rushing in and buying something with only marginal profit

In a hot market, it can be difficult to find a project that stacks up, with so many competing buyers. However, you need to hold your nerve. There’s no point buying something that’s only going to make you a few thousand dollars or, even worse, lose you money.

2. Assuming that buying something cheap is automatically a good renovation project

Cheap houses are often that way for a reason. It might be because of the location of the property, or it could be something structural. It might be because it’s a one-bedroom house in a suburb where families are the prevailing demographic. There are always property bargains to be found, but make sure you’re buying a bargain and not a lemon.

3. Not understanding the area in which you want to renovate

Every suburb has streets that are more sought after and areas that are considered not so desirable. Understanding the subtleties of your target suburbs and the values of properties in the area will help you know when you’ve spotted a good opportunity to buy at a fairly significant discount.

4. Not researching/knowing your likely selling price

If you don’t know what the property is likely to be worth once the renovation is complete, you’re not going to know your profit figure and whether the project is viable. You should be researching the selling price of renovated properties in the area, or unrenovated properties, and making an educated estimate of what the property is likely to achieve once renovated.

5. Overcapitalising with expensive fixtures and fittings

If you’re looking to flip a basic apartment or mid-range family home, you don’t need to spend big money on renovating the property. You want it to look nice and present well, but that doesn’t mean buying top of the range. There are fixtures and fittings that you can buy that look great but are considerably cheaper than the top-end European types. It’s about getting bang for your buck. Every dollar saved puts more profit in your pocket.

6. Not planning and costing your renovation before you start work

While important in any renovation project, this is particularly critical with major structural changes where you’re using a builder to add rooms, move walls, put in new bathrooms or bedrooms, etc. It’s critical to do all the planning up front before any physical work is done so you’re not making any changes along the way. If you’re making variations midway through a structural renovation, the cost blowout is significant and can have a major impact on your profit. Look to have everything in place, even down to the tiles and taps you’re going to use, before any work commences.

7. Not knowing what the market wants in your area

You need to know what ‘product’ is in demand in that area and deliver that. If the market wants four bedrooms, two bathrooms, multiple living areas and outdoor entertaining, you need to create that product. While you might be able to put cheaper no-name-brand appliances in the kitchen in a basic unit, in a higher-end family home buyers will want to see the European brands.

8. Competition from new properties

If you’re renovating units or apartments, you need to be mindful of your competition. There is a great deal of new apartment stock coming onto the market in some cities, and your renovated property is competing with this. Therefore, you need to either have an end product that is at a cheaper price point or that has a location or attributes the new apartments don’t have.

9. Not factoring in the costs of getting in and out of a property

Buying and selling property has significant costs attached. The inexperienced can sometimes forget that and find that all their planned profits have been eaten up in stamp duty and agents’ fees. You need to allow roughly 5% of the property’s purchase price for buying costs. When you sell, most agents charge a commission that is about 2% of the value of the property, as well as marketing costs.

source Your Investment Property 27-4-2015 with warm regards,

AT A GLANCE •Property management, Rental services. • Individual solutions to fit our client's needs •High performance property sales, specializing in sales of properties with tenants in place. •	Body corporate management •	Competitive Commission Rates •	LET FEE FOR REFERRALS, We are a business built on Referrals. •	NO Lease Renewal & Comparable Market Analysis’ Fees/Charges •	PHOTOS TAKEN ON ENTRY •	Hands on approach to all Property Investment Management and & Sales Matters. •	Tenants are shown about safety switches and water mains etc at handover at the property.  We meet all tenants on site for handover.

AT A GLANCE
• Property management, Rental services.
• Individual solutions to fit our client’s needs
• High performance property sales, specializing in sales of properties with tenants in place.
• Body corporate management
• Competitive Commission Rates
• LET FEE FOR REFERRALS, We are a business built on Referrals.
• NO Lease Renewal & Comparable Market Analysis’ Fees/Charges
• PHOTOS TAKEN ON ENTRY
• Hands on approach to all Property Investment Management and & Sales Matters.
• Tenants are shown about safety switches and water mains etc at handover at the property. We meet all tenants on site for handover.

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ACT Excerpt From The 2015 April Market Report – Article by Your Investment Property 27-4-2015

Hand break slowly easing on housing market

Despite a dreary few years in the housing market over the past few years, Canberra could be ready to make a comeback. Alastair Lynn reports

In a state held under duress by activity in the public services, Canberra’s housing market is looking to negotiate its release. Significant fiscal consolidation, job shedding, cutbacks in services and concern over job security has impacted the local economy over the last three years. Fortunately in the early stages of 2015, there are signs indicating that this subdued market may be on the mend.

The latest CoreLogic RP Data Home Value Index shows Canberra’s housing and unit values increased by 0.9% and 3.68% respectively last month. While overall dwellings are down 0.34% on this time the previous year, experts are confident that the indicators for growth are present.

“Certainly early signs have shown improvements in activity in the Canberra market, says Andrew Wilson, senior economist at Domain Group.

“The prospects are becoming more positive that the volatility in house price growth, particularly buyer activity, will end and we’ll see a more consistent outcome from the market that I think will be driven by lower interest rates.”

Data released over the last three months has certainly presented a reason for optimism.

Domain Group’s house price report for the December quarter showed the median house price grew 1.4% while units saw a 1.1% increase.

Wilson says that strong auction numbers at the end of 2014 and numbers tracking higher this year indicate that buyer activity is increasing. “There are early signs that confidence is gradually returning to the Canberra market and starting to filter back into prices growth,” he says.

With the CoreLogic RP Data Home Value Index showing the median house price at $580,000 and $410,000 for units, property in Canberra is not cheap.

However, Wilson pointed to buyer activity being generated more prominently in the middle and upper price range suburbs.

“There’s some positive signs for the Canberra market, however, it will always be hostage to what happens in terms of spending in the public services, so we need to be mindful of that.”

It’s not all doom and gloom
While Canberra has felt some impacts from the federal government’s plans to cut the public service, it does not spell the demise of the capital’s workforce.

“As is typical, when time passes by during the first term of a federal government, it finds it more difficult to implement cuts than intended,” says Linda Phillips, economist for Propell.

With unemployment levels at 4.5%, this does show a rise of 0.8% from 2014. However, ACT still holds the second lowest unemployment rate in the country, second only to NT.

Phillips says that as the situation is returning to normal, some growth in 2015 should be expected.

“Canberra in general has better prospects for investment in the next year, though newer properties, or those with redevelopment potential, will do better than average.”

SUBURB TO WATCH
Harrison: Developing infrastructure drives growth

Cinemas, Olympic swimming pools and excellent sports fields are just some of the developing infrastructure in the up and coming suburb of Harrison. While some suburbs in Canberra have been struggling due to the federal government’s cuts to the public service, Harrison has been going from strength to strength with a 12-month growth of 8%.

Situated just 2km east of the Gungahlin Town Centre, everything a couple or family could need is easily accessible. Primary schools, shopping centres, parks, medical centres and restaurants are all within a stone’s throw of virtually anywhere in the suburb. With the Canberra CBD only 10km away, the drive into town via the Federal Highway takes as little as 14 minutes.

The Land Development Agency has put a lot of time and effort over the last several years to Harrison and the surrounding suburbs. This in turn is driving interest in the area. Gungahlin Town Centre is now one of Canberra’s fastest growing hubs. Along with amenities like clubs, department stores and libraries, significant effort has been put into transport. A network of cycle ways and pedestrian paths now criss-cross the suburb. Together with well serviced bus routes, Harrison is well connected with the city and neighbouring suburbs.

Harrison is also a lot less expensive than nearby Nicholls ($500,000) and Forde ($522,000). Closer proximity to shopping centres and the CBD makes the area more appealing to both young or established couples.
With interest rates at their lowest for more than 50 years, there are some great rates available.

Source Your Investment Property 27-4-2015

Our goal is simple: to provide the greatest possible net operating income, while continually enhancing the value of the asset. We believe in using proven and new strategies and continually looking for new ways to provide cost savings for the property and the owner Our vision To provide a flexible and all-encompassing management service for our customers' properties and assets. Our values Exceptional customer service.  Transparency, punctuality and reliability.

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We are Pleased to Support Queensland Police

We are Pleased to Support Queensland Police.

via We are Pleased to Support Queensland Police.

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Driving sustainable growth – Australian Institute of Company Directors

“Corporate governance is a critical part of growth, particularly in a family-owned business. You have to find a balance between the growth of bureaucratic procedures and the freedom to create and experiment,” he adds.

Driving sustainable growth – Australian Institute of Company Directors.

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Statesmen turns negative into positives

Do you know what we call negative gearing?

A socially acceptable way of saying “I’m losing money”.

Case in point: I got an email this week from a bloke asking me for advice.

He had what I call “property fever”, a strange affliction that comes from attending too many auctions, property seminars, or both.

He’d gone in full pelt: buying two investment properties, both negatively geared (in other words, he was able to write off his investment losses against his income).

The problem for this poor chap was that he had lots of losses but not a lot of income.

He was so negatively geared that he was positively screwed.

And that’s the problem with this policy: it encourages punters (aided and abetted by an industry of property spruikers, real estate agents and debt floggers) to buy money-draining, over-inflated property and lose money — while copping a high-five from the taxpayer.

Worse, young families can’t compete because these investors can afford to pay more for a property (the Australian taxpayer is effectively subsidising them).

Over the years, I’ve spoken to parliamentarians from both sides of the political divide, and they all agree, albeit privately, that negative gearing is a rort that distorts the property market and prevents young families from breaking into the property market.

However, they won’t do anything about it.

That’s because politicians from both sides suffer from a different kind of fever to my negatively  geared  friend.

Theirs is called “I want two flags on the bonnet of my chauffeured Holden Statesman” fever, and it’s so virulent that it takes over the rational policy-making part of their brains.

In short, the lesson here is simple: don’t get in between a statesman and a Statesman.

Scott Pape’s finance columns appear in the business section of the Herald Sun on Saturday and Sunday

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Queensland’s new real estate law came into effect on 1 December 2014, and with it some significant changes, what they mean to you as property investors.

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Queensland’s new real estate law came into effect on 1 December 2014, and with it some significant changes. Despina Priala explains what they are, and what they mean to you as property investors.

Queensland has embarked on a new era for property and contracts. On 1 December 2014 the new Property Occupations Act (POA) came into play, making some dramatic changes. These changes are expected to reform and streamline the way contracts are formed, and will simplifythe inevitable procedures that always  accompany the formation of contracts.

The changes also mark a new era for real estate agents with the removal of  the cap on commissions, and they’re no longer obliged to disclose to buyers their agreed commissions. It has been more than 10 years since the last reforms in Queensland.

The Property Occupations Act

Selling property generally

The main changes are:

1. PAMD Form 30C and the BCCM Form 14…

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