Five of the major regions throughout Queensland are experiencing steady improvements in median house values.

The Sunshine State is establishing its growth potential according to data released by the Real Estate Institute of Queensland (REIQ).

“This report supports the REIQ’s long-held view that those areas of Queensland that have been doing well are continuing to do well,” according to Antonia Mercorella, CEO of the REIQ.

Brisbane is the fastest-selling area in the state with average days on market at 57 – a drop of eight days compared to a year ago.

Brisbane median house values have also risen 1.6 per cent over the March quarter, which along with Toowoomba reflects the state’s the highest quarterly increase.

The capital city’s proportion of profit-making sales increased three per cent in the year to reflect 96 per cent.

Toowoomba holds the state’s record, however, with 98 per cent of all houses sold recording a profit for the vendor.

Mercorella says Queensland is in the grip of steady, sustainable growth, although some regionals are in a recovery phase.

“Those areas that are struggling to recover from the resources downturn are still trying to stabilize,” she says.

“But what we don’t have is the start of another boom and bust cycle, which as we all know by now, doesn’t really benefit anyone in the long-term.”

Five of the major regions throughout Queensland are experiencing steady improvements in median house values.

Brisbane, the Gold and Sunshine coasts, Toowoomba and Cairns, all showed rising annual median house values of approximately 1.5 to 1.9 per cent on average each quarter over the past year.

Gladstone’s median house values rose by 0.8 per cent, which is the city’s first positive move in five quarters.

The rate of decline in Mackay’s median values appears to be slowing with a drop of one per cent to its annual median value in the March quarter.

In addition, Townsville’s median house values rose 0.7 per cent, and its proportion of profit-making sales has remained stable at 74 per cent since August last year.

SEE ALSO RENTAL MARKET EXCERPT FW: http://wp.me/p2zAfd-2l8

Why banks reject finance

May 27, 2015

The rate cuts Australia’s currently experiencing are having a huge effect on what people are able to borrow. It’s especially good for first homebuyers and investors who may be able to buy properties now that they couldn’t afford six months ago with higher interest rates.

BY RYAN CRAWFORD

However, just because you can borrow more doesn’t necessarily mean the bank will approve your loan application.

There are many reasons your loan may be refused. A lender may turn down a loan application even if the financial side of the loan stacks up.

Here are the main reasons I see loans being refused and my tips on improving your chances of being accepted:

* You have credit report defaults or a low credit score
Missed or late bills and repayments will show on your credit file and these can adversely affect your chances of getting a home loan. Ensure your bills are paid on time and resolve past disputes quickly. You can also check your credit file using services such as Veda Advantage.

* The lender may believe you won’t be able to afford repayments based on your financials
Lenders examine your income, living expenses, and other financial commitments to evaluate how much they think you can afford to borrow. Work out how much you think you can afford and create a budget to see how much of your income is available to meet home loan repayments. There are some great tools and calculators online to assist with this.

* You don’t have adequate savings in your bank accounts
You might have your deposit covered as well as enough income to meet your monthly repayments, but the lender might still say no based on your savings history. Demonstrate to the lender that you’re capable of managing your finances and meeting commitments with a savings plan.

* You don’t have an adequate deposit or equity
Lenders have minimum deposit requirements and depending on the property and application you may be required to have more. Ask your lender what size deposit they’re looking for before you apply for the loan. This will help with your savings and identify the type and cost of property you can afford.

* The property itself, for various reasons, is deemed too high-risk
Property criteria can affect your application, such as the area the property is located (for example, some banks won’t lend in certain regional areas) or small building size apartments. Check with your lender that the property you’re interested in is acceptable for a loan.

The bottom line is, when applying for a loan you need to have all your financial information up to date. Apply once you’re prepared and be clear about your investment goals and projections for the next three to five years. Show the lender that you’ve given a lot of thought to purchasing your next investment property and how you intend to manage it.

Name(required)

Email(required)

Website

Comment(required)

Submit

Δ

New property investors paying too much – Money magazine

It’s a case of “buyer beware” for investors thinking of getting into the Sydney, Melbourne or Brisbane residential markets. With Sydney prices overvalued by 25%, according to one leading expert, and further rises expected in Sydney, Melbourne and Brisbane this year, new investors in these markets could be in danger of paying over the odds.

They are likely to also get low rental returns, making them dependent on ever-rising values to earn decent long-term returns on their assets.

Capital city house and apartment values have been rising at more than three times the pace of weekly rents, says Tim Lawless, head of research for CoreLogic RP Data. “The byproduct of such strong capital gains and relatively weak rental growth is that rental yields are being forced lower and lower.” Across the capital city markets gross rental yields have fallen from an average of 4.3% to 3.7% in the year to February 2015, Lawless says.

House price rises of between 7% and 15% this year for the three eastern state capitals are on the cards, according to respected property analyst Louis Christopher, who heads SQM Research. He says that while there is no national housing boom now, if his forecasts are correct east coast capitals will show very robust price growth. The Sydney market is about 25% overvalued. When it reached about 35% in 1989 there was a price correction, Christopher says.

Weaker jobs growth, low wage rises and an economy lacking in confidence are unlikely to spark higher rentals.

Investors entering the market now, especially in Sydney and to a lesser degree Melbourne and Brisbane, need to be very confident that the good times will continue to roll. They are banking on no interest rate rises, no changes to the negative gearing or capital gains tax rules and no inclusion of the family home in the asset test for the age pension, all of which have the potential to send prices down.

Interest rates will rise at some stage, although most economists are predicting at least one more cut before that happens. Christopher says a 0.25% rate increase would stop any housing market boom. “But when are we going to get a rate rise?”

Politicians of all persuasions fear the repercussions of changing the tax rules for property investors but there is a growing band of experts advocating changes, partly to lessen the burden these tax breaks place on strained government coffers and also to help first-home buyers get into the market.

“Negative gearing survives because of persistent myths that it improves housing availability and reduces rents,” says John Daley, head of the Grattan Institute, in an article in The Sydney Morning Herald. “It survives because 1.2 million taxpayers – most voters – use it to minimise their tax. But negative gearing is expensive, inefficient, inequitable, and it reduces home ownership. For governments under severe budgetary pressure it should be near the top of the reform list.”

Whenever possible changes to negative gearing are raised, the real estate lobby points to 1985, when it was abolished for a short period, claiming it harmed tenants because rents rose sharply and the supply of rental accommodation fell. But Bank of America Merrill Lynch chief economist Saul Eslake disputes this, saying rents rose only in Sydney and Perth. And these rises were sparked by tight supply with vacancy rates less than 2%, not the abolition of negative gearing.

If negative gearing is modified or abolished and investors dump their properties, it’s likely many will be bought by first-home owners, so while there will be a drop in the supply of rental property there will also be a fall in demand, Eslake says.

Pam Walkley, founding editor of Money and former property editor with The Australian Financial Review, has hands-on experience of buying, building, renovating, subdividing and selling property.

New property investors paying too much – Money magazine.

Too many property investors are missing out on important cash flow by neglecting depreciation

Many property investors are missing out on beneficial depreciation tax claims. The annoying thing is how often this happens, when it really doesn’t need to happen at all!

Tax depreciation is often an overlooked method of obtaining tax deductions on investment properties. It is a big help in enabling investors to minimise their tax liability and improve their cash flow. Sadly though, we often see situations where depreciation either isn’t maximised to its fullest potential, or worse yet, overlooked entirely.

The Australian Taxation Office (ATO) recognises that the value of capital assets reduces over time as they approach the end of their effective life. These assets can be written off as a tax deduction ie. ‘depreciation’.

What depreciation should I be considering?
If you own an investment property (new or old, large or small), two areas of depreciation are available:

1. plant and equipment
2. capital works on the building

Different items within a rental property have different rates of depreciation based on the effective life of the item. These items are identified by certified quantity surveyors, who inspect the property assets and then calculate its depreciation through their expertise and knowledge of which items are depreciable and how savings can be achieved.

To claim maximum tax benefits on an investment property the ATO encourages property investors to obtain a fully compliant tax depreciation report prepared by a certified quantity surveyor. You or your accountant will use this report when preparing your income tax return.

Further, some property investors may not realise that they don’t have to wait all year to benefit from the depreciation deductions available to them. Instead, they can improve their cash flow throughout the year simply by nominating to use a Pay As You Go (PAYG) withholding variation.

A PAYG withholding variation allows individuals to vary the amount of tax withheld by their employer in each pay to anticipate their tax liabilities. This means that they can take advantage of the deductions available to them regularly, rather than waiting until the end of a financial year for their tax refund. You should speak to your accountant about this.

When to obtain a property depreciation report

Ideally, a depreciation report should be obtained soon after the purchase of an investment property. This enables a quantity surveyor to separate the items included in the purchase price, from the expenses that will be incurred by the new owner in the future. This detailed analysis ensures the maximum investment property depreciation allowances can be claimed.

A depreciation report is critical documentary evidence required by the ATO to support any tax deductions for components of an investment property that are decreasing in value. All investment properties are eligible to have their assets depreciated where, generally speaking, construction costs are incurred after 18 July 1985 and structural improvements are incurred after 27 February 1992. This applies even if the previous owner paid for the construction. In the event that the original construction cost data is no longer available, the ATO stipulates that a quantity surveyor must assess this figure.

Where to start – immediate tax depreciation write-offs and the low value pool

Obtaining independent, professional property advice ensures investment property owners stay up to date with the intricacies of tax legislation and can make well-informed decisions that enhance cash flow. For instance, waiting until just before the close of the financial year to buy an asset for an investment property may entitle you to claim the full cost on your tax return for that year. For example, plant and equipment assets valued at $300 or less are generally able to be written off at 100 per cent in the financial year of acquisition.

Moreover, under the Low Value Pool Regulations, certain items can be depreciated more quickly. Items that enter the pool are depreciated at a set rate or 18.75 per cent in the first year but in subsequent years, the percentage rate of depreciation jumps up to 37.5 per cent on the diminishing total.

What can effective property depreciation save you?

In typical situations – say a commercial property investment of around $1,000,000 – using a quantity surveyor and well-prepared depreciation report can result in clear benefits. Potential tax deductions under a well-planned depreciation schedule could total in excess of $27,000 in the first year of claim and over $100,000 for a 10-year period following the purchase of the property. For an individual taxpayer on the top marginal tax rate of 49.5 per cent (2014/2015 individual tax rate), the tax saving would be $13,365 on a $27,000 tax claim.

Of course, depreciation is only one component of owning an investment property and the associated tax deductions. Other deductions could include:

• fees to property management agencies (SEE WHAT WE CHARGE VRS WHAT OTHERS CHARGE http://wp.me/p1qS3N-7YJ
• repairs and maintenance to the property and its fixtures (IMPORTANT INFORMATION TO NOTE:-

AT A GLANCE

• Property Management & the Sales of Properties with tenants in place
• Individual solutions to fit our client’s needs
• Body corporate management
• Competitive Commission Rates (CONTACT US FOR DETAILS)
• LET FEE FOR REFERRALS, We are a business built on 20 years of Referrals.
• NO Lease Renewal & Comparable Market Analysis’ Fees/Charges
• PHOTOS TAKEN ON ENTRY, tenants are shown about safety switches and water mains etc.  We meet all tenants on site.

                Hands on approach to all Property Investment Management Matters
• interest payments on mortgages over the property
• council and water rates
• property insurances  * smoke alarm compliance *Terri Scheer Landlords Insurance

The total deductions can be considerable and go a very long way to improving your tax bill at the end of the financial year and throughout your years of investment in the property.

Clearly, there’s a real advantage in obtaining a depreciation report on your investment property. Our recommendation is to make sure you have a good depreciation strategy, but consult your accountant and other advisers before you finalise this!

0409 995 578 (Linda)
http://www.ljgrealestate.com.au/index.php?lan=ch Chinese website
https://www.facebook.com/ljgrealestate

LJ Gilland Real Estate: Property depreciation: Article by Mike Mortlock @MCGQS @GillandDebello @ljgrealestate

ljgrealestate

Too many property investors are missing out on important cash flow by neglecting depreciation. 

Blogger: Mike Mortlock, MCG Quantity Surveyors

Many property investors are missing out on beneficial depreciation tax claims. The annoying thing is how often this happens, when it really doesn’t need to happen at all!

Tax depreciation is often an overlooked method of obtaining tax deductions on investment properties. It is a big help in enabling investors to minimise their tax liability and improve their cash flow. Sadly though, we often see situations where depreciation either isn’t maximised to its fullest potential, or worse yet, overlooked entirely.

The Australian Taxation Office (ATO) recognises that the value of capital assets reduces over time as they approach the end of their effective life. These assets can be written off as a tax deduction ie. ‘depreciation’.

What depreciation should I be considering?
If you own an investment property (new or…

View original post 830 more words

Mirvac To Develop $850m Eagle Farm Residential Project

Leading property group Mirvac has been selected as Brisbane Racing Club’s preferred partner for the development of its $850 million Eagle Farm Residential Precinct.

Mirvac were chosen from a shortlist of three contenders to partner with the Club on this quality project.

The Eagle Farm Residential Precinct will be built alongside the Eagle Farm Racecourse and as one of Brisbane’s most exciting lifestyle developments to date, the tender drew attention from local, interstate and offshore developers. The 10-year project forms part of the Eagle Farm Master Plan and will see the delivery of over 1,000 trackside apartments alongside an exciting food, beverage and retail destination.

Located in Ascot, just 6 kilometres from the Brisbane CBD, the 54,000 square metre site offers a premium, large-scale development opportunity in a thriving part of the city’s north east. A range of retail, commercial, hospitality and entertainment facilities are planned for the adjacent land.

Mirvac’s Group Executive Residential John Carfi said the business was thrilled to have been selected as the Brisbane Racing Club’s development partner at such an iconic Brisbane location.

“This location provides Mirvac with an excellent opportunity to deliver quality residential apartments in the heart of Brisbane’s popular racing precinct,” he said.

“Mirvac will draw on its expertise and strong track record of delivering major residential and mixed-use developments and we look forward to working closely with the Brisbane Racing Club on the next phase of this exciting project.”

BRC’s Chairman Neville Bell said Mirvac had been chosen after a vigorous selection process based on its experience in large-scale, mixed-use development projects.

“The redevelopment of the Eagle Farm Racing Precinct is an exciting step for us as part of our 10 year Master Plan,” he said.

“Mirvac’s extensive experience in similar projects aligns with our objectives for the future of the club.

“We are delighted to have a major developer of Mirvac’s calibre onboard as we work through this significant redevelopment.”

The announcement for Mirvac follows successful sales results at its Waterfront, Newstead development which has delivered more than $150 million in sales.

THE MASTER PLAN

Situated six kilometres to the Brisbane CBD, the 5.431 hectare site is approved for residential apartment towers up to 15 storeys.

The site, known as Precinct 5B of the Eagle Farm Master Plan area, provides a rare opportunity to partner with the Brisbane Racing Club to develop its large residential development site.

Brisbane Racing Club’s General Manager – Property & Asset Management, Mr Jeff Kahler said the Club was seeking a joint venture partner for what will be one of Brisbane’s most exciting developments.

“Brisbane Racing Club has obtained planning approval for the master planned development of Eagle Farm and Doomben Racecourses and is seeking a joint venture partner for this iconic Brisbane residential opportunity which will appeal to large developers who want to be involved in a premium, large scale development,” said Mr Kahler.

Knight Frank’s Director of Commercial Sales, Mr Morrison said that the master planned development of the non-core land of Eagle Farm and Doomben Racecourses is a rare opportunity for a local or offshore developer.

“This approval is one the largest and most exciting lifestyle projects in Brisbane’s history and one we’re extremely confident will be well received by the developer community,” continued Mr Morrison.

“The Eagle Farm Residential Precinct is located alongside the Eagle Farm Racecourse and is designated as a high density residential area. This site is capable of sustaining in excess of 1,000 apartments and is situated immediately next to a proposed mixed-use development which may include a range of uses comprising retail, commercial, hospitality and entertainment facilities.

“The site is located in a popular lifestyle precinct, well serviced by public transport with rail, bus and Citycat all close by and easily accessible from all parts of Brisbane and beyond via Inner City Bypass,” added Mr Morrison.

Knight Frank’s Managing Director of Commercial Sales, Mr Paul Henley said that Brisbane residential site sales have gone through considerable growth the past 12 months.

“The Brisbane Apartment market has entered a new property cycle. Sales rates have now remained above long term averages for a full 12 month period. Sale prices have stabilised and stock transacting is a good mix of investment and owner occupier product which signals a suitable diversity of purchasers in the marketplace, as the development of Eagle Farm Residential Precinct is likely to offer.

“In addition to traditional markets Melbourne and Sydney, we have sensed a considerable shift in favour of Brisbane also in our recent visits to Malaysia and Singapore as a preferred Australian location for investment This positive sentiment in favour of Brisbane is in our opinion going to grow in the short to medium term,” added Mr Henley.

0409 995 578 (Linda)
http://www.ljgrealestate.com.au/index.php?lan=ch Chinese website
https://www.facebook.com/ljgrealestate

The CoreLogic RP Data Home Value Index showed capital prices up 0.8 per cent last month to post a 2.5 per cent quarterly and 7.9 per cent annual rise.

Home price growth continues, but not because of supply shortage, say analysts

By business reporter Michael Janda

PHOTO: A Fitch report has found that Australian housing supply has kept up with population growth. (AAP: David Crosling)

MAP: Australia

A widely-watched index shows home price inflation continued into April, with Sydney continuing to drive the national average higher.

The CoreLogic RP Data Home Value Index showed capital prices up 0.8 per cent last month to post a 2.5 per cent quarterly and 7.9 per cent annual rise.

Outside the capitals, prices remained fairly stable, with a 0.4 per cent fall last month and a 1.5 per cent gain over the past year that was only slightly ahead of consumer price inflation.

Amongst the capitals, the largest market of Sydney was driving all the gains, with a 1 per cent rise last month, 5.4 per cent quarterly jump and 14.5 per cent annual increase.

Get ABC in your inbox

Subscribe to get ABC News email updates, including reports and analysis on how the federal Budget will affect you, as well as alerts on major breaking news.

Sydney residential real estate prices were now up an average 65.4 per cent since the global financial crisis (GFC) of late 2008 and early 2009.

Melbourne continued to be a distant second, with a 0.8 per cent monthly gain and 6.9 per cent annual rise.

Melbourne prices were up 52.3 per cent since the GFC.

All other capital city markets were subdued over the past year, with Perth flat-lining and Darwin property losing value, even though Adelaide and Hobart posted strong monthly rises in April.

http://cf.datawrapper.de/Tybhu/1/

EMBED: CoreLogic RP Data home value index April 2015

A glimmer of good news for aspiring buyers in Sydney and Melbourne was that unit values have failed to keep pace with house prices.

Sydney units were up 9.7 per cent over the past 12 months, versus a 15.5 per cent rise in house prices.

Melbourne apartments had very modest price growth of 1.9 per cent versus 7.6 per cent for houses.

Without a doubt I think we will see the regulators looking to curb some of that investor demand.

Tim Lawless, CoreLogic RP Data research director

Media player: “Space” to play, “M” to mute, “left” and “right” to seek.

   00:00           

 00:00        

AUDIO: CoreLogic research director Tim Lawless on Australian home prices (ABC News)

CoreLogic RP Data head of research Tim Lawless said that trend was applying in most of the capitals, due to a relatively strong increase in unit supply compared to new houses.

“That additional supply we are seeing, particularly in Melbourne where apartment supply is substantial, is starting to put a cap on the rate of capital gains we are seeing,” he told ABC News Online.

Mr Lawless said it continued to be investors that were driving gains in property prices, despite regulator moves to slow lending to that sector.

“Historically, we’ve never seen investors outweighing owner-occupiers based on new mortgage originations, and that’s the case at the moment in Sydney,” he observed.

“Investors account for about 60 per cent of new mortgage origination, so very high and without a doubt I think we will see the regulators looking to curb some of that investor demand through the macroprudential levers via APRA [the Australian Prudential Regulation Authority].”

Supply matching demand: Fitch

Ratings agency Fitch weighed into the debate over whether Australia really has a shortage of housing supply.

Its interest in the topic was related to the ratings it gave for mortgage-backed securities, which could be hurt if an oversupply resulted in home price falls similar to Ireland and Spain.

Fitch’s conclusion was that the Australian housing market did not appear to be undersupplied, contrary to what housing industry groups and many independent analysts have argued.

If house prices were to fall, definitely we would not expect to experience a similar situation as it happened in Ireland or Spain.

James Zanesi, Fitch Ratings director

Media player: “Space” to play, “M” to mute, “left” and “right” to seek.

   00:00           

 00:00        

AUDIO: Fitch analyst James Zanesi says home building has kept pace with population growth (ABC News)

However, neither was Australia’s housing market oversupplied, like Ireland and Spain were ahead of the global financial crisis.

“Data indicates that housing supply alone is unlikely to be the root cause of the recent house price boom in Australia, neither is it likely to be the cause of future price correction,” the Fitch analysis found.

This was a conclusion similar to that reached in two ABC analyses of Bureau of Statistics data, one in 2014 and one earlier this year.

Fitch has issued a warning, similar to one made recently by Goldman Sachs analysts, that Australia was building more homes, especially apartments, at the same time as population growth appeared to be slowing.

“Changes in population growth rates or in construction volumes that significantly alter the ratio of new housing to new citizens would be a warning of potential looming oversupply,” the ratings agency noted in its report.

“The current rate of supply of 0.4 houses per new citizen suggests 2.5 people per house, which is in line with the Australian census figure of an average of 2.7 persons per dwelling.

“Given the importance of overseas migration, a significant slowdown in immigration to Australia, could be a catalyst for reduced demand and lower housing prices.”

However, one of the report’s authors, James Zanesi, said that Australia’s supply situation was more akin to Britain, making a 40 or 50 per cent home price crash highly unlikely.

“If house prices were to fall, definitely we would not expect to experience a similar situation as it happened in Ireland or Spain,” he said.

He said an oversupply situation, such as in Ireland or Spain, would likely take years to develop in Australia.

“It was like four to six years, so definitely not months, it usually takes years to develop such oversupply, and normally its driven by an expectation that overseas migration will increase over time,” Mr Zanesi added.

PHOTO: Housing supply analysis by Fitch Ratings (Fitch Ratings)

Foreign buyer surge adds to demand … and supply

Any shortage in demand from new immigrants appears to be currently being offset by demand from overseas investors.

Foreign Investment Review Board (FIRB) figures released yesterday show the number of foreign investor approvals for purchasing Australian real estate jumped 94 per cent last financial year to 23,428.

Moreover, the big increase in foreign investment took place in the sub-$1 million segment (from 10,458 to 19,696) indicating the surge in demand is for residential properties rather than big commercial developments.

The data from FIRB was virtually a year old upon being released … and it’s probable that foreign investment’s increased further from that point.

Tim Lawless, CoreLogic RP Data research director

The FIRB figures show an almost 50 per cent increase in the value of foreign real estate investment to $74.6 billion for 2013-14.

There was a greater than 50 per cent rise in the number of approvals for existing residential dwellings to 7,915 with a total value of $7.17 billion, or an average purchase price of $906,000.

While purchases of newly built dwellings, a category that non-resident investors can legally buy into, more than doubled from 4,449 to 11,338 and totalled $7.72 billion, an average purchase price of $681,000.

Thos average purchase prices put the typical foreign investment well into the price range of many first home buyers, especially in the expensive markets of Sydney and Melbourne where the vast bulk of foreign investment took place.

China was the biggest source of foreign real estate investment in 2013-14 at $12.4 billion, more than double the next biggest source, the USA, while Singapore was third at $4.3 billion.

“We’re still seeing foreign buyers as a relatively large proportion of the market,” observed Tim Lawless, who added that this trend is only likely to have strengthened in the current financial year.

“The data from FIRB was virtually a year old upon being released … and it’s probable that foreign investment’s increased further from that point.”

Last year, a House of Representatives committee found that FIRB’s data collection was also likely to be deficient, as it relied almost entirely on the honesty of foreign buyers to declare their purchase with minimal penalties for failing to do so, meaning the real scale of overseas real estate investment is unknown.

Topics: housing-industry, economic-trends, money-and-monetary-policy, australia