Viewing by month: November 2010

House Trends - How the great aussie dream is changing

The housing market, like any market, sees trends and preferences which change over time.  Obviously these trends can have quite an impact on the types of properties that people buy, as well as on how we as real estate agents market and sell our listings. 

I read quite an interesting article by Martin Kelly in The Australian newspaper last week entitled ‘How big is my castle?’.  The piece considered residential property across Australia and the preferences of home owners when it comes to buying, building and renovating property. 

Housing size
The most significant change is the size of housing.  Residential blocks of land appear to be shrinking across the board as does the size of houses themselves.  Interestingly however, the view of some is that lot sizes are decreasing more quickly than houses, resulting in larger block coverage and smaller backyards. 

The article also addressed the misconception that a greater number of apartments than homes are being built in Australia; according to the Housing Institute of Australia the ratio of new apartments and townhouses compared to detached houses has remained steady over the past ten years. 

Modern conveniences
Despite houses and blocks of land decreasing in size, it would appear that Australians still expect their homes to contain a variety of standard features which were once considered to be luxuries.  Such comforts may include en suite bathrooms in every bedroom, double garages, entertainment/media rooms and so on. 

Australians appear also to be paying a great deal of attention to their kitchens, with people choosing to install a variety of optional features and investing in expensive bench tops and finishes. 

The garden
According to the article, Australians are increasingly opting for outdoor living, choosing home designs that seamlessly integrate backyards with indoor living areas. 

This doesn’t however mean that gardens need to be large in size – the reduced amount of work that comes with having a smaller outdoor space is actually preferred.  The space must only be big enough to facilitate outdoor entertaining and should be nicely landscaped ensuring aesthetic appeal.  

There’s no doubt about it, homes have definitely seen tremendous change since when I first started out in the real estate business.  It will be very interesting to see how different trends grow and change over the next few years. 


0 comments | Posted by Charles Tarbey on 29/11/2010 at 2:25 PM | Categories: Around the house -

Take advantage of current property buying conditions

The Australian residential property market is an interesting place at the moment.   The release of a variety of different statistics in November has indicated that the Reserve Bank’s decision to increase interest rates this month (and the subsequent larger increases by the four major banks) may have translated to a behavioural change in the property market.  

From my position at CENTURY 21, I think that it can be reasonably assumed that buyers are eyeing the property market with caution at the moment.  Home buyer grants have been pulled back, mortgage payments will have increased with the interest rate rise and there is some uncertainty concerning how the RBA will act in December and throughout 2011.   

It is not surprising then, that activity in the national rental market has increased.  The RP Data-Rismark Home Value Index (released at the beginning of November) showed a national increase of 3.3 per cent in capital city house rents and 0.6 per cent in unit rents over the last quarter.  This increase in rental prices suggests that more people are choosing to rent, reducing the number of properties available and pushing prices upwards.

Another interesting piece of data concerns the national auction clearance rate which was recently reported by Australian Property Monitors to be at 52 per cent, quite a reduction from where we saw it at the beginning of the year.  It seems that while homes are still going to auction, bidders are not reaching the reserve price, resulting in the passing-in of nearly half of auctioned properties.   

So what do these figures mean for home buyers? In my view, such conditions could mean some prime buying opportunities if prospective purchasers approach the market in a smart way. 

With the increased activity and prices in the rental market, it may be a good time for property investors to take advantage of the potential for increased future income streams and consider investing in a rental property.  On the flip side, increases in weekly rents could be quite an incentive for those currently renting, but who are in a position to purchase property, to think seriously about entering the market, turning rental payments into mortgage repayments. 

In terms of reduced auction clearance rates, this may not mean that passed-in properties fail to sell at all; it is also possible that sales occur after the auction has been concluded.  If auctions prove to be unsuccessful, buyers could find themselves in situations with reduced competition and therefore potentially increased negotiating power.  Use this to your advantage and be ready, immediately post-auction, to discuss the property with the vendor – such negotiations very often result in an advantageous result for both buyers and sellers. 

Try not to let interest rate uncertainty and other factors deter you from purchasing property in the current market.  There are definitely many situations that could be advantageous and buyers need to be ready to act on them in an intelligent manner.    


1 comments | Posted by Charles Tarbey on 29/11/2010 at 2:18 PM | Categories: Buying -

Living with a tenant - how to be a flatmate and a landlord at the same time

From a landlord’s perspective, living in your own home while tenants occupy any spare rooms can be an effective means of property ownership.  Not only do you have regular sums coming in to help cover your mortgage repayments, you also have an extra set of eyes to keep watch on the property if you are out or away.     

Living with a friend or family member also has a certain appeal –a shared history means you probably already have a fair idea of what the tenant may be like to live with and a good level of trust will exist.

However, regardless of whether it is with a friend or someone you have only just met, living with a tenant does not come without issues.  From my own experiences and what people living in this situation have told me, there are common problems that can sometimes arise.  It is important to avoid these issues from the outset so as to ensure a harmonious living environment.   
 
The first is that a feeling of discontent can develop as the tenant may not feel as comfortable as they would if the landlord didn’t live in, even if you are a friend.  There is not that feeling of paying a regular sum of money to an anonymous party; rather the landlord is right there privy to their every move.  There may also be a feeling of imbalance as the notion of friends ‘renting together’ is absent -  the tenant may feel that they can’t make the same requests of their housemate as they would if renting with another person (e.g. rules around partners staying over, cleaning etc) because the housemate owns the property. 

The second issue which may come up is when the landlord experiences problems with the tenant, but does not wish to confront and create a tense environment with someone they must live with and see on a daily basis. 

To further complicate the issue, when living with a friend or family member, difficulty can sometimes arise when certain steps that are normal in a rental situation are ignored due to the landlord’s familiarity with the tenant.  A bond isn’t received for instance, or the proper legal paperwork is put to the side. 

Once the shared living situation commences, for the landlord it can also be difficult to treat a friend as you would a normal tenant if a dispute arises, for instance you are not happy with their treatment of the property or if they fall behind in rental payments.  It is often easier to exercise legal rights on an unknown than it is on a friend.

To protect against such problems arising, in any shared living situation where the landlord lives in, it can be helpful for the landlord to establish from the very beginning that the tenant should feel at home in the property and for a set of mutually agreed upon house rules to be put in place.  These might include policies on cleaning, cooking and how often guests (such as partners) are able to stay over.

It is also very important that all the legal avenues are taken so as to protect both parties.  Even when the parties have known each other for a long time, there is nothing like an outstanding expense or charge for damage to push the friendship to its limits.  Legal protection should hopefully ensure the friendship can withstand any disputes that arise. 

Living in your own property should be an enjoyable experience, especially if you find yourself able to share with a friend.  Ensure that your time spent living together is mutually beneficial and take time to ensure that all proper rental processes have been followed and satisfied.


0 comments | Posted by Charles Tarbey on 22/11/2010 at 2:14 PM | Categories: CENTURY 21 Solutions -

Doing the research when it comes to House Hunting

The process of buying a property can be as involved or as relaxed as you want to make it.  There are those who like to view multiple properties before settling on one, and others who walk in to the auction of a property they’ve never seen before and make the winning bid. 

Regardless of what type of buyer you are, there are a few pieces of research beyond your typical building inspection that over my time in the real estate industry I have found and seen to be quite helpful when comparing properties and ensuring a certain property is suited to your needs. 

Spend some time in the area before you decide to buy
A common attribute to be found on a property advertisement is the close (often walking distance) proximity of nearby shops, schools and public transportation.  It’s surprising how many people take this at face value and are then disappointed because the ‘local’ amenities are actually quite a fair hike away. 

If the property looks like one you’d be interested in buying, take an afternoon to park nearby and walk around the suburb identifying exactly how far away certain spots are located, and the time it takes you to get to them. 

Ask about the property itself
If the property is older with clear additions to the original structure it is important that you find out when renovations were undertaken.  This should help to give you some idea as to how long you may have before further works will be needed. 

It can also help to know how energy efficient the property is.  This includes whether it has energy efficient appliances and installations such as solar panels or a solar water heater.  If it comes down to a choice between two houses, the knowledge that a certain property could have reduced energy bills may be a deciding factor.

Take care when buying off the plan
Just as older properties could be in need of work, new, off-the-plan properties are not always perfect.  It is often worth doing some research into the developer or builder of a new property, taking into consideration how past projects have stood the test of time and whether the developer has delivered on time.  By doing such research you may be saving yourself further angst down the line if something goes wrong from the developers end.   

By considering a property of interest beyond your conventional (and still very important) professional property inspections, you may be able to determine its appropriateness to your needs, or have further means of differentiating it from other properties also under consideration.  In any case, researching a property and its surrounding area is very important to ensure that you are happy with your new purchase.  


1 comments | Posted by Charles Tarbey on 22/11/2010 at 2:13 PM | Categories: Buying -

Getting the most out of your garage space

An interesting irony exists in Australia’s residential property sector.  Many home buyers are hesitant to purchase a property without a garage or some form of parking space, however it is not unusual for those who already own a residence with a garage to have crammed in so many possessions in need of storage that it no longer functions effectively as a space to park a car. 

For those in this predicament, what can be done? Over the years I have come to realise that with some clever storage techniques, a garage can work pretty well as a space to both park a car and to store household goods.

The first step to getting the most out of your garage space is to conduct a large-scale cleanout.  This will help you to identify what things can be tossed and will set you up to store certain items more effectively.  I blogged last week about how to conduct a successful garage sale; put these skills to use and sell off the items long buried in the depths of your garage that are no longer needed.   

Before you simply return the remaining items back to their original positions, stand back and take a good long look at your garage space.  I always find it quite amazing how much bigger areas turn out to be once everything is removed.  Considering your empty garage should give you some perspective around how you can best use the space.

Remember, storage does not have to be at ground level only.  In fact, if you are using your garage to store your car and it only just fits in, an effective means of storage could be to utilise the wall space and even ceiling space above your vehicle.

Equipment such as bikes and kayaks can be attached to the ceiling of your garage simply by installing ceiling hooks or other appropriate storage implements.  Your local hardware store should have all the necessary tools.

The walls of your garage are also prime space for attaching storage solutions such as shelving, cabinets or even heavy duty netting (in which you can store sporting goods etc, shoes etc).   

It goes without saying that care should be taken when fitting storage implements onto the walls and ceiling of your garage.  It not done properly, either the storage implement or the item being stored (or both), could become dislodged, causing damage to the stored item, your car, or even a person standing nearby. 

It is amazing how much can be kept in a garage when it is cleaned and organised efficiently.  A few innovative solutions will improve the ease with which you can drive into your garage, locate stored items and ensure the safety of your possessions.  


0 comments | Posted by Charles Tarbey on 15/11/2010 at 11:39 AM | Categories: Around the house -

RBA lifts interest rates

For the past five months, the first Tuesday of every month has seen us here at Century 21 breathe a sigh of relief as the Reserve Bank of Australia delivered their decision to keep interest rates on hold.  We assumed that the inevitable – a change in rates – would come at some stage, however each month brought the good news that reprieve had been granted for a little while longer.   

But apparently this wasn’t to last with November bringing the (somewhat unexpected) news that the RBA had decided to lift the official cash rate by 25 basis points to 4.75 per cent after five consecutive months of keeping it on hold at 4.5 per cent. 

In his explanatory statement, Glenn Stevens, Governor of the RBA, cited the reasons for the bank’s decision.  He explained that as Australia is currently experiencing historically high terms of trade the economy is now subject to a large expansionary shock and has relatively modest amounts of spare capacity.  He also noted that there is a risk of inflation rising over the medium term. 

The board’s decision therefore was that the “balance of risks had shifted to the point where an early, modest tightening of monetary policy was prudent.”

For ordinary Australians with mortgages, the rate rise of 25 basis points will see around $50 added to the monthly repayments on an average $300,000 home loan.  However we’ve already seen two (at time of writing) of Australia’s big banks, the Commonwealth Bank and ANZ, raise the rates on their standard variable home loans by significantly more than the RBA. 

This rate rise therefore has the potential to make things difficult for many Australian families leading into Christmas and perhaps next year as well, as the possibility for further rate increases remains. 

So what can mortgage holders do to lessen the blow? I for one am a firm believer in the effectiveness of forward thinking and practical household budget management. 

It could be an incredibly worthwhile exercise to sit down and plan out your month to month expenses as well in advance as is possible.  By factoring in any expenses that you know are coming, such as water and electricity bills and home loan repayments, you will be able to reduce the likelihood of overspending and be in a better position to incorporate the additional mortgage repayments less painfully into your budget. 

Mortgage holders should be aware that future rate rises (and therefore increased mortgage repayments) are definite possibilities.  However the simple act of planning can go a long way to lessen the financial impact on your family.  


0 comments | Posted by Charles Tarbey on 15/11/2010 at 11:37 AM | Categories: Finance - State of the Market -

Home security in the summer months

The summer months are almost upon us – can you believe how quickly this year has passed? I don’t know about you, but I’m definitely looking forward to relaxing a bit before CENTURY 21 hits the ground running in 2011. 

It’s been my experience that the long, hot days of summer generally see people doing a couple of things.  Firstly, people take advantage of the weather and spend much more time outdoors when at home, whether it be entertaining, gardening or playing in the backyard with their children.  It is also common for doors and windows to be left open at all times of the day a lot more frequently.   Secondly, people often go on holidays, spending up to several weeks at a time away from home. 

It is for these reasons that summer tends to be a particularly attractive time for house break-ins.  Burglars are faced with many unoccupied homes, along with a fair amount of properties which are easily accessible. 

Having said this, there are definitely steps you can take to protect your property.

For the times when you are at home, remember to lock all of your windows and doors before leaving for the day and at night time when sleeping.  If you prefer to sleep with an open window to improve airflow, ensure that your window has a locking mechanism that allows it to be fixed at a certain height when open. 

It may be worthwhile to have all your locks checked – their effectiveness may be impeded if too old or faulty.  

Outdoor lighting is worth considering as a means for home protection.  Burglars are usually drawn to darker areas because this reduces their chances of being seen and caught.  Lighting in your outside areas will help to illuminate the access points to your property, reducing its attractiveness to a burglar. 

If going on holidays, take the time to advise a trusted neighbour of your absence.  They may be able to keep an eye on your property and take action if there is any unlawful activity.  It is also a good idea to have a neighbour collect your mail, avoiding a build-up in your letterbox. 

Timers on lights can be helpful in protecting your property.  The turning on of lights will help to create the illusion that you are at home, potentially deterring any burglars. 

Home security during summer does not have to be a difficult exercise.  In the end, vigilance and common sense will help to ensure that a burglar does not target your home.    


2 comments | Posted by Charles Tarbey on 09/11/2010 at 12:27 PM | Categories: Around the house -

Conducting a successful garage sale

Garage sales can be helpful in the property sale and moving process as preparing a property for sale inevitably requires a large clear out and tidy-up.  You may be looking to dispose of your tired, disused possessions before starting afresh at your new residence, or you could be downsizing and just can’t fit everything in - your possessions aren’t ready to be thrown away, they just need a new home. 

And garage sales don’t just have to be for those selling a property; they can also come in useful after a good old-fashioned spring clean.  

Whatever the situation, it is often the case that trash to one person is treasure to another.  Hence the beauty of a garage sale – you can pass along your no-longer needed possessions to a new home and potentially turn a small profit in the process. 

So what are some steps you can take to ensure the success of your garage sale?

The first task is to select what items you will be selling on the day and then prepare them for sale.  Some pieces may look a little worn at first glance; however with a bit of a polish, mend or touch-up, they could be revitalised and catch the eye of a buyer.  Remember that clean items, including clothes, will usually be more appealing to buyers than dirty ones. 

When advertising your garage sale, try to spread the word far and wide amongst your family and friends.  You may even like to join forces with another person who also wishes to sell some things.  This should increase the number of people who attend and get a good result for both parties.  

The next step is to determine how to present your wares.  The aim of this exercise is to make it easy for people to see what you have for sale.  Arranging similar items together is often a good approach – e.g. keep all your books in the one distinct area and your clothing items in another.   

When it comes to the pricing of your goods, try to ensure that you leave some room for bargaining; it is inevitable that some of your visitors may attempt to haggle you down on price.  A good practice could be to price each good ever so slightly higher than what you would like to receive for it.  This way, when you receive a lower offer you may be able to negotiate to your preferred price. 

Towards the end of the day, you could consider reducing the price of items that have not yet sold to increase your chances of moving stock. 

Remember, a ‘garage sale’ doesn’t necessarily have to be held in your garage or driveway.  You could present your goods at a local market or fete and achieve similar results.  This method may even be advantageous as it doesn’t require you to invite potential strangers along to your home and it removes much of the need for advertising. 


0 comments | Posted by Charles Tarbey on 09/11/2010 at 12:25 PM | Categories: Around the house -

Selling at the same time as your neighbours

After working hard to prepare your home for sale, it can be a little bit daunting to find out that a neighbour is selling their property at the same time. 

What does this mean for you? Upon making the realisation, many people immediately assume that they now must compete with their neighbour for buyers, or that their pricing must reflect (or even undercut) that of the other property. 

In my opinion, vendors do not have to have these worries if they find themselves with neighbours selling concurrently. 

In most streets, there are no two houses that are carbon copies of each other, and it is rare that buyers are looking for exactly the same property attributes.  Sure, many people may have similar basic ideas about what they’re looking for, but there are those little things that sway people one way or another. 

You may find that buyers come into your property and instantly feel at home, whereas this feeling was not replicated for them in your neighbour’s house.  Alternatively it could go the other way, and the other property could instinctively feel like a better fit. 

You would be facing the same situation regardless of whether or not your neighbour is selling; buyers will usually be considering more than one property – it doesn’t matter if it is located next door, around the corner or in an entirely different suburb. 

You may actually find that selling at the same time as a neighbour proves to be advantageous for you.  For some time-poor buyers, instead of having to choose which open inspection to attend, it may be easy to come to both, as the locations are so close to each other.  Or people who only came to see the neighbouring property may wind up popping in to see yours as well.  This could mean a greater pool of potential buyers for your property. 

In terms of your price, approach as you would with any other sale.  Follow your real estate agent’s advice and try to keep your expectations in line with market conditions.  There should usually be no reason to undercut your neighbour’s price to secure a sale. 

In any case, I would be hesitant to say that sellers should be worried if they find themselves selling alongside a neighbour.  We are experiencing a significant housing shortage in the real estate market at the moment so it’s fairly safe to assume that your property will sell, so long as it is priced fairly. 


1 comments | Posted by Charles Tarbey on 01/11/2010 at 3:26 PM | Categories: Selling -

Housing expectations for Australia in 2020

The future is a funny thing.  In my experience, we often spend a great deal of time talking about what our lives will be like in the years to come and then suddenly we’re living it.  It can be incredibly hard to imagine ‘the future’ and as such many of the ideas we have about what it might be like are simply extensions of our day to day lives in the present. 

Two researchers, Rebecca Huntley of Ipsos and Bernard Salt of KPMG, recently set out to determine what Australia might look like in the future, a horizon which they set at ten years, or the end of the 2010s. 

Their report, Future Focus, (which you can read at http://www.kpmg.com/AU/en/IssuesAndInsights/ArticlesPublications/Documents/Future-Focus-Australia-2020-October-2010.pdf) is one of the first studies aimed at investigating the attitudes of Australians regarding the future direction of our country.  In quite an innovative approach, the study involved the development of two distinct scenarios of what Australia might be like in 2020 – both different but credible versions of the future. 

These scenarios were read out to consumer groups and business leaders, with the responses documented.  The report covers their thoughts regarding a wide variety of topics including population growth, immigration, infrastructure and foreign trade and markets.

Not surprisingly, given the industry in which I work, what I thought to be most interesting in the report were the attitudes toward housing in the future. 

Housing affordability was found to be a significant concern of consumers when considering the state of Australia in 2020.  Both consumer groups and business leaders were hesitant to believe that property prices would ever drop dramatically, with consumers worrying about the ability of future generations to afford housing. 

My response? It is almost a blessing to have an understanding of what our fears may be in ten years time regarding housing affordability as it means that we can actively try to improve the situation now and over the coming years. 

The fact that Australia is currently experiencing a housing shortage is no secret and this will continue to drive house prices.  There is a clear onus on governments over the next decade to create initiatives aimed at helping to ease pressures. 

But responsibility falls on home buyers as well.  Importance must be placed on forward planning and prospective purchasers, especially those in the first home-buyer bracket, may find it valuable to revise their spending/saving plan. 

Remember, the first property you purchase doesn’t necessarily have to be your dream home.  It may serve as a way of building equity or as a foot in the door to the property market. 

Although buying property may require further planning over the next decade as prices rise, I really do think that strategic (and forward) thinking is the way to ensure entry to the housing market. 


0 comments | Posted by Charles Tarbey on 01/11/2010 at 3:23 PM | Categories: State of the Market -