Viewing by month: April 2011

Rental market in queensland's resource - rich areas doing well

As a result of the devastating floods that occurred in January, Queensland did not have the best start to 2011.  The natural disaster hit most sectors of the Queensland economy, including mining, agriculture, housing, retail, tourism and the ports/rail operators, among others. 

We’ve now reached April and it is fantastic to see that the economic recovery process has started.  From my perspective in the real estate industry, I am particularly happy to see that the rental market in some areas of the state continues to be strong, which shows that residential accommodation in Queensland is still in demand.   

According to information from the Real Estate Institute of Queensland, demand for rental homes in resource-rich regions of Queensland is continuing to drive up rental yields in some mining areas. For example, the mining suburbs of Dysart, Blackwater and Moranbah in Central Queensland saw gross yields of between 14.5 and 8.9 per cent over the December quarter 2010, as a result of demand remaining stronger than supply.  

 Additionally, the REIQ reports that figures from the Australian Bureau of Statistics indicate investor numbers in Queensland have increased in February 2011 from January 2011.  Although these numbers are still at historic lows, it is pleasing to see some improvement. 

The Chairman of REIQ, Pamela Bennett, acknowledges that the natural disasters in Queensland at the beginning of the year no doubt had an impact on buyer confidence, however she points out that February saw an increase in the number of dwellings financed across all buyer segments – further good news for the Queensland residential property market. 

Pamela hopes that this increased activity will continue, given the general subdued nature of property prices across Queensland, along with the fact that interest rates are looking to remain steady at 4.75 per cent for sometime into the year at least. 

I am also hopeful that the Queensland residential market continues to pick up, as do all the sectors affected by the floods.  If we can take the robust demand for housing in Queensland’s mining areas as any indication, we can be encouraged that the Queensland real estate and resource sectors look to be starting the road to recovery.  


0 comments | Posted by Charles Tarbey on 27/04/2011 at 9:06 AM | Categories:

Getting back to basics - simple things to consider when buying a property

Over the years that I’ve been writing this blog, I have tried to make the issues and topics covered as diverse and interesting as possible, so as to be informative to all members of the property market – whether residential buyers, prospective purchasers or investors. 

As I was reading the Daily Telegraph a couple of weeks ago, I came across an article that contained a very simple checklist for buying a property.   It occurred to me that in my pursuit to cover a variety of property related topics, it has been awhile since I have looked at the very basic fundamental aspects that are important to consider when making a real estate purchase.

I thought that Nhada Larkin’s article in the Daily Telegraph – ‘Homing in on property facts’ (28 March 2011) provided a great summary of what actions to take before buying a property.  Essentially, the article reminds buyers that a real estate purchase is one of the few times in life that you won’t be able to get an exchange or refund if your purchase doesn’t end up being what you wanted – so it is important to get it right. 

The article quotes the President of the Real Estate Institute of Australia, David Airey, who says that the way to avoid making a mistake when purchasing a property is to do the necessary research and investigations, including pre-purchase inspections and building inspections. 

Conducting this research before buying is essential because, as the article points out, even if you find a fault with a property after your purchase has gone through, the sale cannot be cancelled unless it is found to be a fraudulent transaction.  The only way a buyer may be able to address the situation could be through a common law action, which would likely involve a costly (and possibly lengthy) legal process.
 
The article also points out that it is not only older houses that may have major problems which could prove to be costly later on.  New properties can also have faults resulting from poor construction and appliances not working. 

An important point for buyers to note, David Airey says that real estate agents have a duty of full disclosure to buyers, which means they must inform buyers of any information (that they know of) which may have an effect on the purchasers’ decision to buy the property.  He therefore instructs buyers to ask agents directly if anything exists which may affect the property, or if it has any faults. 

The article mentions other important questions that buyers should ask when looking to purchase a property.  These include the reasons for the owners’ decision to sell, the length of time the property has been on the market for, and the age of the property. 

As the article puts it – buying a property is a significant and expensive decision to make.  Conducting the necessary research and asking the appropriate questions are essential steps to ensure your purchase is a good one. Consider the results of your inspections carefully, and avoid buying properties that come back with significant faults – even if you love a property, try to remember that there will always be further purchase opportunities. 

If you have any questions about the buying process please feel free to drop into any one of the hundreds of CENTURY 21 offices located around Australia. 


0 comments | Posted by Charles Tarbey on 27/04/2011 at 9:05 AM | Categories:

Things to consider when purchasing an apartment

There is no doubt that apartment living can be a very attractive housing option for many people.  But before purchasing an apartment, it is important to understand how the ownership of an apartment differs from that of a house, and the responsibilities that you may inherit upon buying into an apartment complex. 

Ownership
In the majority of cases the ownership of an apartment or unit comes under strata title – which refers to the individual ownership of a single unit within a multi-unit complex.  In owning your apartment you also become a joint owner of the common property with the other owners in your apartment complex. 

Depending on your strata scheme, areas such as your external walls, floor and roof may be considered common property, and thus do not below to you.  This means you may not be able to renovate or alter them. 

Levies
Owners of apartments are obligated to pay rates for the upkeep of the common building of which they are a part owner.  Apartment complexes may have two separate funds running concurrently to which the owners must contribute.  Typically an Administrative Fund is used for day-to-day operational expenses, while a Sinking Fund is in place for long term expenditure.  The Owners Corporation of a building will estimate how much is needed for each year to cover all costs, and this figure is then split between all owners, becoming a fee known as a ‘levy’. 

Before buying into an apartment building it is important to consider the state of the building to ascertain whether or not extensive renovations or repairs may need to be undertaken in the near future.  If this is the case, and the funds have not already been raised, you as the owner may be asked to contribute to pay a Special Levy to cover the costs.  This information can usually be found in the Minutes of meetings held by the owners of the building, and should be identified if you have a Strata search carried out. 

Try not to fall into the trap of selecting a building purely because its levies are low.  This could be a risky tactic, particularly if the building will be in need of repairs shortly after your purchase.  While your general levies may stay the same, a Special Levy established to cover the costs of the work could be far more than you budgeted for. 

Pets
Some apartment buildings allow animals while others don’t.  If you wish to live with a pet it is important to check this before making your purchase. 

In your search for a suitable apartment you will find that many buildings vary, from the way they are maintained to the levies charged.  Be sure to have the appropriate studies and reports completed so that you can ensure there are no surprises later on into your ownership.   

For any questions regarding apartment ownership, or to see any purchase opportunities available in your area, please do not hesitate to pop into your local CENTURY 21 office. 


1 comments | Posted by Charles Tarbey on 19/04/2011 at 11:39 AM | Categories:

Plan a cost effective renovation

Whether it’s a weekend retiling a courtyard, or a full-scale home renovation, I think most people are attracted to the idea of a building project that is as cost effective as possible – which could mean managing it yourself.  And for the majority of people that I’ve spoken to over the years who have made changes to a property, building projects usually end up costing a fair amount more than what was originally budgeted for. 

It would seem that Archicentre, the building advisory service of the Australian Institute of Architects, sees this a lot and says that even with a thrifty approach, a lack of appropriate management can see the gains of a project quickly lost once the project begins. 

According to Archicentre, the following elements are key to the success of any project:
• Knowing exactly what the job requires
• Having a realistic projection for the completion
• Finding trustworthy workers to see the project through

So why do cost-blowouts often occur during building projects? Ian Agnew, the ACT & NSW State Manager of Archicentre says that they are quite common due to the complexity of managing the renovation or construction process which requires an understanding of plans, materials, subcontractors, insurance and on-site safety. 

He says that one of the biggest mistakes owner builders make is failing to understand the cost of fittings and finishings (which often make up 50 per cent of the total cost of a project) and only budgeting and getting quotes for the structural aspects of the job.  This may leave people financially exposed and unprepared as more funds could be needed to complete the project as it progresses. 

Ian also says that projects that are not planned properly can lead to confusion between the owner builder and the various subcontractors over issues such as pricing and material specification.  If this occurs, you run the risk of the project stalling and sometimes even face legal complications. 

But there is hope for those who are embarking on building projects and wish to keep costs under control.  Archicentre has seen that the owner builder who works through their design carefully, has it accurately costed and uses independent quality inspections and reports at milestones (such as foundation, framing, lock up and handover) usually has a satisfactory outcome.

And the more money you save by planning efficiently for your building/renovation project, the more you will be able to put towards finer touches, such as fittings, fixtures and appliances, which can often add extra value to your home when it comes time to sell. 


0 comments | Posted by Charles Tarbey on 19/04/2011 at 11:38 AM | Categories:

RBA leaves rates on hold for the fourth consecutive metting

There was good news for the residential property market again last week as the Reserve Bank of Australia decided in its monthly meeting to leave the official cash rate on hold at 4.75 per cent.  This means that all mortgage holders can rest assured that interest repayments will remain the same for another month at least. 

In his statement that accompanied the decision, RBA Governor Glenn Stevens referenced various factors that had influenced the Board’s thought processes.  He said that:

• Although the global economy is continuing its expansion leading some countries to tighten their monetary policy settings, overall global financial conditions remain accommodative. 
• In the household sector there continues to be caution in spending and borrowing and a higher rate of saving out of current income.
• The Bank expects inflation over the year ahead to continue to be consistent with the 2 – 3 per cent target.  

On the back of these and the general macroeconomic outlook, the result of the meeting was that the Board judged its current mildly restrictive stance of monetary policy to remain appropriate for the time being.  

So what can the residential housing market take from this decision? Although predictably ambiguous, Governor Stevens’ statement gives little indication that the RBA has plans to move interest rates in the short term, thus it could appear that home owners will have reprieve from an increase to their mortgage rates for some time to come. 

Essentially, I think that this fourth consecutive rate hold will provide some short term stability for the housing market nationally, which to be frank is much needed.  Of late, the market has received some negative publicity and it seems as though people have been viewing purchase decisions with some caution since the decision in November to increase rates. 

With the significant levels of stock that are on the market at the moment and reduced transaction rates, the certainty that this rate hold brings could very well be the incentive that many prospective purchasers need to return to the market. 

It goes without saying however that prudent buyers and investors will still need to consider the very real possibility of future rate rises and how these will impact the viability of their property purchase.  As the year progresses, the RBA will continue to monitor the factors as described above and will act accordingly.  It could be that the outlook for inflation changes or that consumer spending picks up – if the RBA’s view that its current mildly restrictive stance is no longer appropriate and needs to tighten, rates could go up affecting mortgage repayments and budgets. 

But for the time being, we can all rest knowing that another month has passed with no rate change and that rates remain at attractive levels.  This makes now as good a time as any for prospective buyers to look at entering or returning to the property market. 

Remember that CENTURY 21 has thousands of real estate agents situated across Australia ready to help you with your property needs.  Please feel free to pop into any of our offices for a chat. 


0 comments | Posted by Charles Tarbey on 08/04/2011 at 11:26 AM | Categories: State of the Market -

A good time for buyers in the housing market

The residential property market can sometimes be a confusing space to navigate, especially with the media attention it often generates and receives.  The views of property commentators, as well as the constant flow of data released, often appear to be conflicting, with the media conveying sometimes contradictory signals to buy, sell, or hold. 

I consider myself fortunate to be in the position I am, as I have access to our internal company data as well as the experience and opinions of the thousands of real estate agents in the Century 21 network, who are spread right across the entire country.  Having contact with such sources allows me to keep a firm grip on what’s happening in the market, in both capital cities and rural areas. 

At the moment, with the conditions that we’re seeing across the national market, it is my feeling that those who are ready to buy are positioned quite nicely.  According to internal CENTURY 21 data, which is a reflection of all CENTURY 21 offices across Australia, residential sales volumes are down of late – we have seen a decrease of 30 per cent from where they were around this time last year. 

And with transactions down, there are still significant levels of stock on the market; our figures indicate that there are approximately 67 per cent more properties for sale across the national CENTURY 21 network than there were at around the same time last year. 

Add to these figures the findings of the recently released RPData-Rismark Home Value Index, which saw a national decline of 1.3 per cent in capital city home values over the quarter to February 2011. 

So what does all of this mean for buyers? The fact that property transaction volumes are down could suggest that the market is currently wary and approaching purchase decisions with some trepidation.  If this is the case, then we are looking at a period where demand is low, which ironically can help to create favourable conditions for buyers.  The levels of competition that would otherwise need to be contended with are lower, which allows for some breathing space when it comes to making a decision, as well as giving you room to negotiate on price. 

And with the Reserve Bank of Australia deciding last week to keep interest rates on hold for the next month at least, buyers who require financing have another window of opportunity to obtain mortgages with favourable interest rates. 

It would appear therefore, that the property market in its current state may hold some good opportunities for those who are in a position to make a purchase.  I would suggest that these people make the most of this period and devote some time to researching and comparing the various properties and financing opportunities that are available.

Remember that our CENTURY 21 real estate agents all over the country are happy to answer any questions you may have about the properties that are available for purchase and general market conditions in your specific area. 


0 comments | Posted by Charles Tarbey on 08/04/2011 at 11:25 AM | Categories: Finance - Investors - First Home Buyers - State of the Market -

Should you buy a house or an apartment?

It seems to be a very common question when it comes to buying real estate, particularly for first and second-time buyers – will it be better decision to purchase a house or an apartment?

As a starting point, the factors that go into making this decision are mostly personal preferences.  These include whether the property is an investment or to be your residence, the location that you’d like to live in, how many people will be living in the property, what types of maintenance you are prepared to carry out personally, and so on and so forth. 

Investment vs. Primary Residence
Many investors find apartments to be easier purchases for a number of reasons.  Apartments do not necessarily require the larger amount of external maintenance (e.g. gardens, pools) and attention that an individual house will need, and the building’s strata manager/committee will usually take care of most building and remedial work that is required.  However, having this advantage comes at the cost of strata levies to the investor, which may have an adverse effect on the rental income that the property delivers. 

Investors should also consider the length of time they plan to hold on to a property for and the capital gains desired from the investment.  Using historical pricing as a guide, we have seen that both houses and apartments experience value gains; over a short to medium-term period, houses and apartments appear to show similar price gains, however over the longer term houses may see larger growth in value. 

For investors, rental potential and income are other factors that require consideration.  Many real estate agents believe houses to hold appeal for a larger market of renters, including families with children and pets, who may steer clear of apartment living.  Houses also often allow a higher rent to be charged. 

Having said this, however, price is obviously a factor that will be of pertinence to many buyers, whether purchasing as an investment or home.  While some apartments can be more expensive than houses (e.g. penthouses with water views in costly suburbs), in general terms, houses are usually the more expensive purchase, especially if you are comparing properties in the same area.  Apartments therefore may be a more friendly purchase option, especially for first-time buyers.      

Location & Space
High density housing is commonly found in city areas and suburbs that are only a short distance from the CBD.  Thus, if you desire an inner-city lifestyle, an apartment may be the best property option.  However, if you wish to live further away from the city and have enough room to accommodate several people including children and pets, you may find the extra space (both internally and externally) that a house usually provides may be more appropriate for your situation. 

In the end, the choice between an apartment and a house very much comes down to your personal circumstances.  By thinking about your needs and thoroughly researching the property market at the time you wish to buy, you should be able to reach a decision that is suitable for your situation.

If you would like advice regarding your situation and the decision to buy a house or an apartment, please feel free to visit one of the many CENTURY 21 offices around Australia.         


1 comments | Posted by Charles Tarbey on 04/04/2011 at 9:25 AM | Categories: Buying - Investors - First Home Buyers -

How to Be a Green Renter

There is a lot of talk at the moment about how home owners can make their homes more environmentally sustainable, with governments and companies offering financial incentives for various green initiatives (such as the installation of solar panels and water heaters) that people are encouraged to take advantage of. 

But what about the renters who are environmentally conscious but cannot action such projects because they do not own the property they live in? With growing numbers of potential first home buyers who are choosing to put off making a property purchase and continue to rent, this is an issue that may grow in importance. 

In my search to provide an answer for the renters in our community, I came across a website called Green Renters which, according to the site, is a not-for-profit providing sustainable living advice specifically for those living in rental property.  The organisation runs workshops, hosts events and runs projects aimed at educating Australian renters on how they can be more environmentally friendly.    

Helpfully the website segments the home into rooms, providing green tips, product reviews and relevant pieces of news that relate to each area of a property.  These pieces of advice always keep the focus on the site’s rental audience, however can of course be implemented by home owners as well.The lounge room for instance has news about the Tricklestar – a master-slave simple powerboard designed to ensure that your television does not draw power when it is turned off, or even when it is on standby.  Meanwhile, over in the kitchen the site provides advice as to how people can make the best choices when shopping for food at the supermarket. 

Green Renters definitely has practical recommendations that renters can easily put into place to limit the environmental impact of their day to day activities.  But things can get a little bit tricker for those renters who wish to implement larger-scale projects such as solar panel installations.  Such ventures can be expensive and ultimately the owner of the property will have give their approval and bear the cost – unless you are willing to pay for the installation yourself and shoulder the loss when you move on. 

Such arrangements can be difficult to organise, but could be worth it if you know you are to be a long term tenant of a property.  One idea is to sit down with your property manager and explain the situation, even presenting a business case exhibiting the financial benefits of the project (seen through the property’s reduced operating costs), as well as the reduced environmental impact, that can be passed on to the owner.

There is no doubt that as a renter it can be difficult to maintain environmental vigilance when you have limited control over the property in which you reside.  However there are definitely practical, everyday actions that can be taken.  For larger green projects it may be a worthwhile exercise to approach the owner/manager of your property to suggest initiatives that could be applicable and cost effective for both of you.   


0 comments | Posted by Charles Tarbey on 04/04/2011 at 9:24 AM | Categories: State of the Market -