Viewing by month: July 2011

NSW Government releases land in North West and South West Growth Centres

The New South Wales Premier Barry O’Farrell and Minister for Planning and Infrastructure Brad Hazzard recently announced that the NSW Government was moving to overturn the current housing shortage by accelerating the release of land in the North West and South West Growth Centres of NSW.

According to Barry O’Farrell the unlocked land will provide enough area on which to build 13,000 new homes. 

The North West site, Marsden Park, has the potential for approximately 10,000 dwellings, along with a town centre with 30,000 square metres of retail space and 50 hectares for public recreation. 

The South West will see land released in Catherine Field, a site which the Government says has the capacity for around 3,000 new dwellings and employment land. 

According to Mr Hazzard, the Government was able to accelerate the land release under the Precinct Acceleration Protocol, which allows Growth Centre precincts to be considered for rezoning earlier than scheduled, provided there is no additional cost to taxpayers and a commitment to forward delivery of infrastructure. 

When announcing the accelerated land release the Government also referenced the work that had begun on the South West and North West rail links, which, according to Barry O’Farrell, meant that potential residents could buy in these future suburbs with confidence that transport infrastructure would be delivered. 

Precinct planning by the Department of Planning and Infrastructure is set to commence soon so as to investigate land use options and infrastructure requirements.

From my position at CENTURY 21, the prospect of new homes being built is good news for the residential property market in NSW, and goes some way to address housing supply issues.  This of course is dependent on the dwellings being built and the eventuation of appropriate infrastructure.

I will be watching over coming months to see the progress made in the planning of these areas.


1 comments | Posted by Charles Tarbey on 26/07/2011 at 9:16 AM | Categories:

Ensure a smooth home loan process

I think we can safely assume that the home loan process is not one that many people go through all that often.  It can therefore sometimes present as somewhat confusing. 

As mortgages are an intrinsic part of buying property, and as a real estate company with a mortgage broking arm (CENTURY 21 Home Loans), my colleagues and I at CENTURY 21 Australia see a large number of people taking out housing finance and try to support our clients wherever possible. 

To this end, a recent story in the August 2011 edition of Your Investment Property magazine entitled ‘Top tips to avoid making embarrassing mortgage mistakes’, provides helpful advice to mortgage seekers. 

The magazine identifies several ‘rookie’ mortgage mistakes to steer clear of.  These include:
• Aiming for a mortgage that is too large;
• Signing up to mortgages with discounted honeymoon rates which can jump to much more expensive rates once the introductory period has finished;
• Not factoring the potential for interest rate increases into your budget;
• Taking advantage of ‘rock-bottom’ interest rates without considering the other features of the loan;
• Not doing enough research about available lenders and options.

Essentially, when obtaining housing finance one of the best ways to ensure that you secure the best deal for your personal situation is to conduct the necessary research about all options available to you and to have a good understanding about your requirements and what you can afford. 

Having this awareness should help you to avoid making the costly mistakes outlined in Your Investment Property magazine and to achieve a mortgage that allows you to purchase a property within your budget.    


3 comments | Posted by Charles Tarbey on 26/07/2011 at 9:15 AM | Categories:

Declining home values present opportunities to buyers

Conditions in the residential property market seem to be looking somewhat brighter for would-be buyers at present.  In addition to the Reserve Bank of Australia electing to keep interest rates on hold at 4.75 per cent for at least another month rather than moving to increase them, the latest RP Data-Rismark Home Value Index showed a decline in property prices over May.   

Combined, these factors could help to provide Australian property buyers with increasingly affordable purchase options.

The Index, which is based on more than 110,000 homes sales nationally in 2011, saw capital city values decline by 0.3 per cent (seasonally adjusted) over the month of May, resulting in five continuous months of retracting prices.  The brunt of the decline occurred in January when values fell by 1.2 per cent, which accounted for 45 per cent of the 2011 decrease.

Over the 12 months to May, the Index showed that capital city dwelling prices have dropped by 2.3 per cent (seasonally adjusted).  

As predicted by CENTURY 21, the Sydney market has seen modest growth in the 12 months to May 2011, with home values up by 1.0 per cent, according to the Index. 
 
The RP Data-Rismark Home Value Index also showed an improvement in gross apartment rental yields which rose to 5.0 per cent over May.  It found that the best yields could be seen in Darwin (5.7 per cent), Canberra (5.4 per cent), Brisbane (5.2 per cent) and Sydney (5.2 per cent).

According to Charles Tarbey, the Chairman and Owner of CENTURY 21 Australia, the decline in prices seen in the Index could be helpful to many Australian home buyers.

“After a number of years of tremendous growth in property values, the market appears to be showing a cyclical price correction, which could bode well for Australian buyers grappling with affordability concerns,” said Charles Tarbey. 

“Despite the caution from purchasers we are seeing in the marketplace, these conditions seem to provide both home buyers and investors with increasingly affordable purchase options,” continued Charles Tarbey. 

“With the added incentive of increasing rental yields, investing in this market could prove to be a very fortuitous purchase decision,” concluded Charles Tarbey. 

For advice regarding property prices and purchase options in your area, please feel free to drop into one of the many CENTURY 21 offices situated around Australia to talk to a CENTURY 21 real estate agent. 


1 comments | Posted by Charles Tarbey on 18/07/2011 at 4:00 PM | Categories:

Essential home fire safety tips for winter

The recent spate of house fires across Australia, some of which have been devastatingly fatal, has highlighted the increased fire risk that we face in winter. 

According to Fire and Rescue NSW, statistics show that 43 per cent of all fire fatalities occur in winter.  Not surprisingly it is in the colder parts of the year that our use of heaters, clothing dryers and other electrical appliances tends to rise as we attempt to combat the cold. 

It is therefore of the utmost importance to remain aware of the potential dangers that can be present when such appliances are used and to maintain fire safety practices so that we can be sure to avoid tragic, unnecessary outcomes, such as loss of life and significant property damage.

Fire and Rescue NSW provides an excellent winter fire safety checklist on their website that is a must-read for households at this time of the year. 

The following is a selection of tips and suggestions from Fire and Rescue NSW to help you make sure your home is fire safe:
• Have an adequate number of suitable smoke alarms installed throughout your home and test them regularly;
• Never leave cooking unattended;
• If you have a fireplace make sure the chimney is clean and always place a screen in front of it when in use;
• Test electric blankets before use and check for damage or frayed cords before placing on beds;
• Test an electric blanket by laying it flat on top of bed and then switching it on for five minutes before putting it on the bed for use;
• Keep curtains, tablecloths and bedding away from portable heaters;
• Keep wet clothing at least one metre from heaters or fireplaces and never leave unattended;
• When using a clothes dryer clean the lint filter each and every time you use it;
• Always extinguish candles or any other open flames before going to bed;
• Store matches or lighters in a secure place not accessible to young children;
• Use only authorised installers of fixed heating appliances;
• Oil, gas or wood heating units may require a yearly maintenance check;
• Install an electrical safety switch; and
• If possible, keep a fire extinguisher and blanket in the kitchen placed near the exit. 

Fires can be devastating events that in many cases are caused by avoidable circumstances. 

I implore you to protect your family and home from unnecessary death, injury and damage by taking simple steps to reduce the risks of a fire occurring, and in the case that it does occur, to ensure a quick and safe escape by the occupants of your home.  


3 comments | Posted by Charles Tarbey on 18/07/2011 at 4:00 PM | Categories:

Improve your property’s leasing potential by catering to prospective tenants

When purchasing a property for investment purposes, as opposed to living in it yourself, it is important to ensure that it is attractive to good quality potential tenants so as to maintain constant tenancy.  The property doesn’t necessarily have to have features that you like personally, rather ones that tenants deem to be necessary and attractive. 

Such essential elements are dependent on both the area in which the property is located as well as the types of tenants you are targeting.   For instance, in areas where tertiary institutions are prominent, rental properties that cater to student living (i.e. accommodate shared living and are affordable) should logically enjoy consistent residency.

So, what attributes should investors look for when purchasing a property?

Family suited properties in suburban areas
If investors wish to attract families as tenants, the following property features may prove to be attractive:
• Number of bedrooms – at least three reasonably sized bedrooms will allow families to accommodate several children
• Proximity to schools and workplace
• Safe location
• Public transportation close by
• Reasonably sized backyard
• Open spaces (e.g. parks) nearby
• Quality of accommodation

Student accommodation
When buying in areas with large student populations, consideration should be given to the following attributes:
• Number of bedrooms – students will often live together so multiple, well-sized bedrooms could prove to be attractive
• Proximity to education institutions
• Closeness to restaurants, shopping facilities, nightspots
• Affordability – many students will be living on a tight budget

Inner-city living
Smaller, inner-city apartments are often tenanted by young professionals who enjoy a newly acquired disposable income.  Such renters often look for:
• Close proximity to CBD/place of work
• Parking
• Security
• Closeness to restaurants, shopping facilities, nightspots.

As you can see, the return on your investment can very much be maximised if you buy a dwelling that is appropriate for the demographics of an area.  A property that appropriately caters to the types of people who wish to live in a specific area should enjoy a consistent level of high quality tenants which should hopefully minimise the time and funds you need to dedicate to the property’s management.   


0 comments | Posted by Charles Tarbey on 11/07/2011 at 9:04 AM | Categories:

Break continues for borrowers as rates kept on hold for July

It was good news for mortgage holders and home buyers last week as the Reserve Bank of Australia elected to keep interest rates on hold at 4.75 per cent for the seventh consecutive meeting – the longest period over which rates have been kept steady in four years.

The decision saw the Reserve Bank renege slightly on the growth expectations for the Australian economy that it has purported in previous months, with Governor Glenn Stevens noting in his post-announcement statement that “growth through 2011 is now unlikely to be as strong as earlier forecast” and that the resumption of coal production after the Queensland floods is proceeding at a slower rate than what was previously thought. 

The Bank also referred to inflation levels in its statement, which it expects to remain elevated in the near term, but close to target over the next 12 months with a gradual increase anticipated over time. 

As always, the RBA will continue to monitor inflation levels carefully, and the release of the June quarter consumer price index figures by the Australian Bureau of Statistics (on July 27) could be an important determining factor when the Board meets to set rates for August. 

In his response to this decision, CENTURY 21 Chairman and Owner, Charles Tarbey, said that it was “appropriate for current economic conditions, especially those we are seeing in relation to consumer spending and housing.”

“This decision provides a boost for the residential property market and will come as much-needed relief for many mortgage holders across Australia, a large number of whom are already facing pressures to keep up with their monthly repayments.”

He went on to caution borrowers to “prepare themselves for the possibility of a rate rise in August, as by then the Reserve Bank will have seen the latest inflation data which will serve as an important guide for its decision.”

So where does this leave homeowners? While spared at least another month of interest rates going up, the next few months will be telling as the RBA monitors economic growth and levels of inflation.  August could be the month for a rate rise if we see a significant increase in inflation figures, and borrowers should be prepared for this.

But in the meantime, homebuyers are able to enjoy another month of rates at 4.75 per cent, with mortgage repayments remaining at current levels.   


0 comments | Posted by Charles Tarbey on 11/07/2011 at 9:02 AM | Categories:

The Australian dream downsizing

The Australian residential property scene has been experiencing somewhat of a dilemma for a little while now – while property ownership continues to rate highly as one of the great Australian pursuits, housing supply and affordability constraints have been dampening that dream for many Australians and certainly making it more difficult to achieve. 

However, according to the findings of a recent study of Australian values by Ipsos Mackay entitled ‘Being Australian’, it appears that despite affordability constraints, Australians continue to highly prioritise home ownership, just in a smaller way. 

Combating their lack of affordability, many people are moving to downsize their property dreams with a large number choosing to purchase smaller dwellings such as apartments and townhouses. 

According to an article by Andrew West in the Sydney Morning Herald entitled ‘Australian dream now means flat or townhouse’(June 27, 2011), the study will have “implications for urban planning because it undermines the assumption that Australians want large houses on individual blocks on large estates.”

The SMH article shared the findings of the Ipsos Mackay Report which concluded that “the dream of owning your own home persists in 2011 and Australians continued to believe that, one way or another, the dream will be realised.”

West also ascertained that the study is in agreement with the findings of another recently released report, ‘The Housing We’d Choose’, from the Grattan Institute, which looks at the disparity between the housing options that exist in Sydney and Melbourne, and the housing choices and trade-offs that people would make if they could. 

The report tries to ascertain whether or not Australia is building the right types of property for our future needs and reaches the conclusion that “if new construction is to shape our cities in accordance with our housing preferences, it must be significantly different from the mix of housing we have accumulated over the past few decades.”

It will be interesting to see how the findings of both of these reports, along with the preferences of buyers becoming more pronounced, will affect the property market and the direction of development and government policy over coming years. 


1 comments | Posted by Charles Tarbey on 04/07/2011 at 10:32 AM | Categories:

Make sure you get the best power deal

In last week’s blog we considered the best cost cutting initiatives to save money on your heating bill in winter.  And while there are definitely some excellent methods of staying warm without having to have the heater on constantly, the fact remains that power prices are continuing to increase, which could definitely have an impact on your household budget no matter what measures you take to cut back on using power. 

Thus, while substantial savings can be made by implementing power reduction initiatives at home, there is also the potential to save on your bills by ensuring that you are on a suitable energy contract. 

An article in the Money supplement of the Sydney Morning Herald entitled ‘Bright savings for energy hikes’, by Lesley Parker (June 8, 2011), talks about what consumers should be looking for when comparing power contracts, particularly in terms of how companies charge for energy usage.

The article quotes Tim Wolfenden, the chief executive of www.makeitcheaper.com.au, who says that there are two key aspects for consumers to consider when comparing energy deals – the base rate and the discount offered.

For instance, a large discount may not be as generous if the base rate it comes off is high.  A smaller discount off a lower base rate may actually be more cost effective. 

Wolfenden also warns consumers to make sure they gain an understanding about any conditions that apply to discounting – for example, whether or not the discount is still valid if a bill is paid late, and to which portion of the bill (actual usage or fixed supply charges) the discount applies. 

The article also mentions termination fees which too can cause issues for consumers when switching energy retailers, in a similar fashion to that when changing mortgage provider.  Consumers must understand how much it is going to cost them to abort their current energy contract and change to another supplier, and to ensure that the process is in fact worth it – that is, that the reduced rate achieved on the new contract is not thwarted by the cancellation fees they must pay to their current supplier. 

As like any household service, energy contracts change and you may not realise that you could be getting a better deal (and paying less) either by renegotiating with your current retailer, or by switching to a new company.  In any case, it is usually a worthwhile exercise to research the energy options available to you at least yearly, to see if an alternative contract is available that saves you money.   And in the current environment of rising energy costs, this exercise has never been more valuable. 


1 comments | Posted by Charles Tarbey on 04/07/2011 at 10:32 AM | Categories: