Viewing by month: April 2009

Home energy audits on the horizon

I’ve mentioned green issues before, and the fact is that as people become more aware of our impact on the environment, the impact of this on the real estate industry also increases. This is not only through our practices as businesspeople, but in what buyers demand of their property. This in turn impacts on sellers – if you’re not offering what the market wants, the chances of selling your house reduce dramatically!

When I last spoke about being green, I mentioned Bernard Salt's prediction that home efficiency audits were likely to become commonplace, much the way they are when it comes to white goods. From a recent article I read about international property, it seems that Canada is getting closer to this reality. Ontario is in the process of passing a couple of pieces of legislation that, if passed, will make home energy audits mandatory for any residential transaction. The bill would require all sellers to have a home energy rating report to provide to prospective owners or tenants for any new buildings starting 1 January, 2010. Full details are still being finalised, but home energy rating reports would cost the seller approximately $300 in new fees.

The response to this has been two sided. Many view the progress on making energy efficiency more of a priority in home ownership a positive thing. However, others feel that this just another unnecessary cost that will be added to the home purchase transaction, and are angered that the bill doesn’t apply to commercial sales. When you consider that commercial buildings are often less efficient than the personal home, it’s easy to see why. If reducing our impact on the environment is the driver of this legislation, the exclusion of commercial property from the proposed legislation is nonsensical.

  

While I’m all for the introduction of initiatives that minimize our impact on the environment, there’s another area for consideration. When home inspections designed to detect structural and safety issues are not mandatory, the introduction of imposed energy audits seems a little unreasonable – surely the safety of occupants should come first?

Interestingly, the Ontario Real Estate Association has publicly stated their opposition to the new legislation, and there seems to be a fear that values will decline if they rate poorly in auditing. In reality, there are very few highly-rated homes on the market presently and the introduction of energy audits will have more of an effect in several years time. As real estate agents, it is our responsibility to help people make informed decisions about their property purchase and new legislation such as this provides the industry with an additional tool to do so. It will be interesting to watch the story unfold, and to see how quickly Australia adopts a similar strategy.


0 comments | Posted by Administrator on 30/04/2009 at 8:11 AM | Categories:

Keys to real estate success

regularly say that many of the rules that apply to any aspect of life apply to the real estate game – I’ve touched on areas like communication, honesty and common sense in the past in this regard. Another aspect is training. Like anything, ongoing learning is an essential part of life and should be actively sought by those wishing to be successful. That said, teaching someone something can be one of the most rewarding, and simultaneously one of the most frustrating things anyone can do!

At CENTURY 21, we pride ourselves on our training programmes because it is our goal to make sure that everyone in our network is delivering the high standard of service that people have come to expect when they see the name CENTURY 21. Interestingly over my time, I’ve noticed that some agents – and I’m not necessarily talking about CENTURY 21 here – just get it, and some just don’t. The ones who don’t are those who are so set in their ways, no matter how much training they sit through, they’ll eventually fail or at least do much worse than those who are prepared to move with the times.

The real estate industry is a constantly evolving one – you can see that much from my posts last week regarding the state of the market and the ongoing rate cuts we’ve been experiencing. The trick is to work hard, but also to work smart, and it’s important as agents that we do that. It’s also incredibly important as a buyer or seller of property that you find an agent committed to that philosophy!

I’ve also blogged before about how much I love this industry – if I didn’t, I wouldn’t still be in it after so long, and that’s the first step to success. You need an agent who believes in their ability to succeed, and their worth. This is a key quality for someone who you are entrusting the sale of your home to – believe me! This passion and dedication should translate directly to planning and organisational abilities, their follow up and contact with customers, understanding of the market, and the power to - and Nike so aptly put it - just do it.  


0 comments | Posted by Charles Tarbey on 29/04/2009 at 9:18 AM | Categories:

Shrinking land size

In yesterday’s blog I mentioned the trend of top growth suburbs often falling within city areas. An effect of this is an increasingly tight supply of inner city land, and average land areas close to our nation’s capital cities are getting smaller and smaller. According to recent information supplied by RP Data, changing lifestyle preferences and affordability are also driving the change to smaller land areas.

 

These types of changes obviously have a direct impact on the real estate market, as more and more people choose to live in detached homes that require less maintenance this is what buyers start to demand. As a result, developers are producing smaller lot housing in an attempt to provide more affordable housing alternatives.



One of the most interesting trends to come from the recent HIA-RP Data Residential Land Report is how inherently small lots are found within the inner city capital city areas, particular Sydney. Of the 20 Local Government Area’s (LGA’s) across Australia with the smallest average lot sizes, Greater Sydney accounts for 13 entries and all of the 20 LGA’s listed are located within a 20 kilometre radius of the relevant CBD.



The City of Sydney LGA has the smallest average lot size for houses throughout the country at 135.9sqm. Coming in second on the list was the Melbourne LGA. The abundance of small lots within these inner city areas highlights the strong demand for housing in these two cities in particular. Interestingly, all of the LGA’s listed, except for Auburn in NSW, have a current median house price above the respective capital city median house value and all are considered to be long established inner city residential areas. The ongoing densification in these inner city areas is likely to shrink average lot sizes further as people become more willing to sacrifice space for location.

 

Also interesting to note is that Queensland, Northern Territory, ACT and Tasmania had no entries on the list of the 20 LGA’s with the smallest average lot size during 2008. As I always say, real estate is a highly personal business and personal preference will dictate whether or not the market will continue to demand inner city living as a priority, even if a sacrifice of space is required. That said, maybe moving further out for more room is the next trend we’ll see – I did recently cite that regional markets shouldn’t be overlooked and one thing many regional centres definitely offer is room to move!


1 comments | Posted by Charles Tarbey on 23/04/2009 at 8:49 AM | Categories:

Australia's Top Growth Suburbs

The other day I was citing the benefits of rural life, and that there are many regional markets that investors and home buyers should not overlook. That said, I don’t discourage anyone from considering city living as it certainly has its own appeal – it’s just a very different one to country life and both have their benefits, and suit different types of people.   When looking at the top growth suburbs around the country, the list for the last year was certainly dominated by suburbs within the capital city areas. This is despite the fact that across the board, property values fell in 2008 with only Darwin and Adelaide recording value increases in their markets. In fact, over 60% of suburbs with the strongest capital growth were situated within capital city areas according to information supplied by RP Data. More information is provided in the tables, but here’s my handy summary of what’s what! 

Across the country, units in Greenwich in Sydney recorded the strongest annual growth in median price at a fairly hefty 49.8%. Within NSW, only 3 suburbs located in Sydney appeared on the list, and many of the other strong performing suburbs were found in major regional areas. Conversely across Victoria, all of the top performing suburbs for houses were found within the capital, with only units in Irymple found located outside of Melbourne. Across the top performing suburbs, only houses in Portsea and Eaglemont have a median price greater than $1 million and only houses in St Andrews and St Andrews Beach have a median price greater than or equal to $500,000.

Interestingly, the list of top growth suburbs in Queensland was dominated by suburbs outside of Brisbane with just 4 of the 10 suburbs located in Greater Brisbane. All of the suburbs found outside of Brisbane were situated in major regional areas, and the list for this state only features two suburbs with a median price greater than $500,000. (Coolangatta and Tennyson) – this relates back to what I was saying yesterday about regional areas becoming a more and more popular residential choice for many Australians.

Similar to previous examples, SA top growth suburbs show a dominance of properties priced below $500,000 and 7 of the 10 suburbs were found within Greater Adelaide. Next door to SA is the one state bucking the trend of a dominance of affordable properties receiving strongest growth. All of the houses within WA detailed on the list, and two of the units, have a median price greater than $500,000 with 3 recording prices greater than $1 million. The similarities it does have with other states is that it is dominated by capital city suburbs on the list, with 7 of the 10 listed located in Perth.

It will be interesting to see how this list changes, and which suburbs continue to grow as the market stabilises and investors find their feet again.


2 comments | Posted by Charles Tarbey on 22/04/2009 at 12:00 PM | Categories:

State of the real estate market

After the Reserve Bank again recently cut the cash rate by 0.25%, the interest rate is now at its lowest since 1960. However much to the disgust of the public and in a move that also incurred the wrath of our Prime Minister, the big 4 banks decided not to pass the full cut on to the public. NAB refused to pass on any reduction at all and the other three passed on a cut of just 0.10%.

Whilst there has been a national backlash in regards to the banks not passing on rate cuts, those of us with mortgages, and anyone considering entering into one, must remember that nothing is certain. With such a large financial commitment, you always need to account for potential changes to interest rates and make sure your budgeting skills are up to scratch - good budgeting at the time of property purchase can help overcome most fluctuations in interest rates. Despite the banks not passing on the full cut, the ongoing rate reductions are still good news. When combined with petrol prices also being lower than at last year’s peak, the average home owner is enjoying having significantly more disposable income than they did during mid 2008.

Market expectations as at market close on the 7th April 2009 show an expectation that the cash rate will bottom at 2.37 percent in October this year. Just how much of the further anticipated 0.6% cut gets passed on is anyone’s guess however, if this week’s action (or lack thereof) by the banks is any indication, it appears unlikely the full benefit would be passed on. It also seems apparent that gone are the times where we see big cuts by the RBA, it appears they will now be taking a more measured approach to any further rate cuts.

Consumer sentiment figures released this week by Westpac-Melbourne Institute show that during April, sentiment increased by 8.3% to 92.7 points. Although the index remains below 100 points suggesting pessimists still outweigh optimists it is a further positive sign that the market is showing an improvement in health. With news of share price increases, property value increases and an improving Australian dollar over recent weeks it is unsurprising to see a lift in confidence. Looming increases in unemployment are likely to see pessimism in the market outweigh optimism however, it is encouraging to see sentiment improving from its recent low.


0 comments | Posted by Charles Tarbey on 21/04/2009 at 9:03 AM | Categories:

Don't ignore regional markets

Often when people talk property, particularly in relation to growth and decline, the focus tends to be on capital cities. And whilst capital cities around the world do tend to house the largest numbers of people, there’s no denying that within our great southern land, there are many regional centres also worthy of note when it comes to analysing real estate.

  

Many Australians love the country life, and until very recently mining towns everywhere were experiencing property and population booms. I personally know many people who have made the move to the country don’t want to return to the city once they’ve experience rural life. But not only that, some regional markets are performing incredibly well when looked at from a real estate perspective.

  

According to recent data from RP Data, the largest municipalities outside of each state’s capital cities is home to almost 2 million people, and with such large population bases, the residential markets in these areas are expansive, and growing. Often you’ll find even greater diversity in the housing stock of these regions than in the bigger cities and often these regions border a capital city boundary, making them viewed as an increasingly affordable alternative to capital city living.

  

In NSW, the largest region outside Sydney is the Hunter area - home to around 590,000 people. Major regional centres Newcastle, Lake Macquarie and Port Stephens are all located within the Hunter region, as are some of the most prestigious Australian wine regions, making it a great tourist destination as well as a great place to live. Median house values in the area are currently sitting at $310,000, which is about $245,000 lower than the Sydney metro median value – you can see the attraction (and I mean other than the wine!)

 

Within Victoria, the second largest region is the Barwon Statistical Division which has a population of about 260,000. Located immediately West of Melbourne, this area includes Greater Geelong, Surf Coast and Colac-Otway. House values in the region have been very resilient, falling by just 0.2% over the last 12 months to record a current median value of $294,000.

 

In Queensland, the Gold Coast is the largest region outside of Brisbane. Despite being most famous for its beaches and tourism, over the last few decades the Gold Coast has established the largest office precinct outside of Brisbane and houses a significant working population. Around 500,000 residents call the Gold Coast home and the region is one of the fastest growing in the nation. At the end of 2008 Gold Coast house values were about $92,000 higher than Brisbane house values – definitely a regional market people want to get into!

 

In South Australia the largest region outside Adelaide is Outer Adelaide housing around 125,000 people. The region wraps around the Adelaide metro area and includes the Fleurieu Peninsula, Mount Barker which is fast becoming a satellite city of Adelaide. Similarly to the Hunter in NSW, this area houses the wine regions of Barossa and parts of the Adelaide Hills – what more reason do you really need to make the move? House values in the region have not experienced as great an increase as the Adelaide metro, but have still increased over the last twelve months.

 

When looking at the west coast, the South West of WA is the second largest region in the state after Perth. It’s an expansive region which borders the Perth metro area to the south and extends from Mandurah south to Manjimup, including the coastal areas of Bunbury and Busselton and the wine regions around Margaret River – are you detecting a theme here like I am? House values have trended in line with the Perth metro market, with values recording very strong growth between 2003 and the end of 2006 but falling over the 2008 calendar year.

 Like I said, regional living is a lifestyle embraced by many, and I have to admit that the thought of living within a wine region is certainly a tempting one! I can see why so many people make the move…

0 comments | Posted by Charles Tarbey on 20/04/2009 at 8:43 AM | Categories:

Smart Buyers Inspect

Seeing as I keep saying what a good time to buy it is, I thought some practical advice about inspecting a home before leaping into a sale may also be worthwhile. I know as well as the next person that falling in love with a home can result in a crashing desire to do whatever it takes to make it yours, and in today’s market where many a buyer is anticipating getting a great bargain, it can be easy to jump the gun.

  

Savvy home buyers already know that hiring a professional inspector to go over the property thoroughly is of paramount importance. These people also know how important it is to actually be present for the inspection, and that’s because you’ll often find that some of the best information you can glean from home inspectors comes when they are chatting about their findings while walking around the home. You will want to read the inspector's written report carefully, but you should also keep in mind what was said during the inspection.

 

I find that property inspections are often like vehicle inspections, and the potential buyer has hired professional inspectors because they want to if anything’s wrong, but then often they're surprised when the inspector actually finds something seriously amiss. Another scenario that can crop up with a property inspection is that sometimes a home inspector won't find anything specifically wrong with a home, but they may have a hunch that a problem might exist or be more extensive than it appears. If you find yourself in these circumstances, find out why the inspector can't determine the extent of the problem and what the risks are if you don't get another inspection. The last thing you want is to overlook these types of suspicions only to be faced with a $50,000 problem further down the track.

 

If you do discover problems with your dream home, you need to ask yourself how much you're prepared to spend to fix it and if the house worth the purchase price plus what you’re going to have to spend. However, regardless of the outcome, the one thing you shouldn't do if a home inspector finds something wrong during the inspection is panic. Sadly, even newly built homes aren’t perfect and by not panicking, you'll be able to think clearly about what you want to do, and how you plan to negotiate a solution to the problem.

 Happy inspecting!  
0 comments | Posted by Charles Tarbey on 17/04/2009 at 8:39 AM | Categories:

Rents on the rise - still

Although many property reports are either full of doom and gloom, or would have you believe that things have been on the up since the day the bottom fell out of the market, somewhere between the two lies the truth. There is no denying that since the global financial crisis became a reality late last year, median property value across the country have, for the most part, been falling. When trusted property analysts and figures from the likes of RP Data show this to be true, those who dispute it are looking either uneducated or untrustworthy.

  

CENTURY 21 prides itself on providing clear, expert advice and currently the advice isn’t to sit on your hands when it comes to buying property. In fact, figures show that rents are continuing to increase, and as I mentioned yesterday, that makes this the perfect market to be buying in.

  

Across the country, weekly rental rates for both houses and units are proving a very strong aspect of the market. Continuing the 2008 trend across all mainland capital cities, all property types across recorded growth in weekly rental rates. Last year, rents increase on average $41 per week for houses and $35 per week for units.

  

According to RP Data figures, Darwin was the standout performer in terms of rental growth during 2008 where weekly rents for houses increased an incredible 18% and unit rents climbed by 19%. Interestingly in 2009 so far, Darwin’s recorded property values also had the greatest increase and maintains the country’s best rental yields at 6.25% for houses and 6.44% for units.



Sydney follows just behind Darwin with median house rents increasing by 18% over the year and unit rents up 14%. Melbourne is next with rental rates for houses increasing 17% in 2008, and unit rentals 14% higher. Adelaide’s increases were smaller, and rents on houses increased only 5% during 2008 and unit by 4%. Canberra’s figures were similar - rental for houses increased by 4% and units by 6%.

  

Adelaide however was the only other capital city to record positive value growth during 2008 and as the growth looks like it might slow during 2009, it is anticipated that rental growth will increase for Adelaide during the year.

  As I have said before, it’s actually a great time to be buying!
0 comments | Posted by Charles Tarbey on 16/04/2009 at 8:58 AM | Categories:

International property

Flicking through any paper in the morning, it quickly becomes apparent how much of an interest Australians have in regards to all things international. The number of travel features in any given paper in particular, and the number of websites dedicated to Aussies broadening their horizons is astounding. As a nation, we are very big on staying a part of the international loop.

  

Being part of an international franchise I think about international property on a regular basis, probably more so than a lot of others. I’ve blogged about holiday homes before, and how in Europe for example the international holiday home market is much bigger business than it is here. Although the majority of us may not consider buying property overseas, I do think the type of housing you see internationally is very interesting. Location definitely seems to impact on style of housing and often you can pick a property’s location just by its architecture.

  

There are of course certain trends that transcend international boundaries, such as sprawling mansions by the beach, and high density living throughout inner cities across the globe. But then there are those stereotypical properties that we can instantly pick as being from certain countries. Think the London terrace house - although this trend has translated and the likes of Potts Point in my home town of Sydney boasts many beautiful terraces reminiscent of London, if you see a photo of a London terrace, its hard to imagine it being from anywhere else. The loft apartment conjures up images of New York for many, and white veneer and archways remind many of Italy. Driving from suburb to suburb you can certainly see international influences in many Australian properties and it just goes to show that whilst finding the perfect home is indeed a very personal thing, there are definitely distinct styles that nations tend to adopt en masse.

  

I personally prefer the property trend of the French to include expansive wine cellars in their homes, but until that becomes possible I’ll settle for our Aussie tradition of having a shed out the back. Perfect for those times when you just need to get away and that holiday home in Maui still isn’t in reach!

  Until next time, happy house hunting!     
0 comments | Posted by Charles Tarbey on 15/04/2009 at 9:55 AM | Categories:

Holiday homes

As I made my way to the office this morning, I noticed how quiet the streets still are after the holidays. And that got me thinking about holiday homes. Mostly about how much I’d love to have one somewhere like the Hunter Valley, but also about the types of holiday homes that people invest in, how often they’re used, if the reality is as great as the thought (I find it hard to imagine it wouldn’t be) etc.

  

For the most part, Australians aren’t all that big on the holiday home. Whereas many British residents invest in holiday homes located in the likes of Spain and Greece, we’re in a country blessed with massive amounts of sunshine and capital cities that have great access to beaches and bodies of water. We already live in the type of places that offer exactly what the Brits are looking for in a holiday home location, which goes a long way towards explaining why the concept isn’t as widespread here. But for those people who do want a home away from home, the likes of Palm Beach in Northern Sydney are popular choices. People tend to look for a place that’s not so far away that you can’t escape just for a weekend, but that’s far enough from home that you do actually feel like you’ve managed to get away from it all.

  

Holiday homes can also offer great rental yields if you’re prepared to rent them privately, or through an organisation that specializes in managing holiday rental properties, but in this regard good promotion is the key. Another popular investment opportunity is buying into a hotel or resort complex where the owner is provided allocated time within their room or bungalow, but without the headache of traditional property management.

  If you do have a favourite spot that you return to time and time again, I can definitely see the attraction in removing the hassle of trying to find somewhere to stay. I wonder if there are any rooms for sale at my local pub…
0 comments | Posted by Charles Tarbey on 14/04/2009 at 9:05 AM | Categories: