Viewing by month: July 2012

Building approval rise in May

The Australian Bureau of Statistics (ABS) recently reported  that approvals for new dwellings rose by 27.3 per cent in May, in seasonally adjusted terms, following a  7.6 per cent drop in June.

 

As councils across the nations gave the go-ahead for new building projects, the number of dwelling approvals rose to 13,591, up from 10,676 units in April.

 

According to the ABS, a major reason for the rise was a 58.7 per cent jump in ‘private sector dwellings excluding houses’, which includes multi-storey units and town-houses.

 

The ABS also cited private sector projects in New South Wales, Victoria, and the Australian Capital Territory as key drivers behind the statistical incline.

 

A state-by-state breakdown saw Victoria lead the pack with a 31.8 per cent increase, followed by New South Wales (25.1%), Western Australia (24.8%), South Australia (16.2%) and Queensland (10.3%). 

 

The results were also positive in the Northern Territory, where approvals rose by 21.5 per cent, and the Australian Capital Territory, where approvals jumped by 27.5 per cent.

 

The only state that saw a decrease in approvals was Tasmania (-12.1%).

 

For more information about the real estate market in your area, please contact your local CENTURY 21 office. 


0 comments | Posted by Charles Tarbey on 24/07/2012 at 11:27 AM | Categories:

Emotional investing is dangerous

Unlike other forms of investment, real estate is unique in that prospective purchasers are more susceptible to becoming emotionally invested in the asset itself.  

 

In many instances an investor will connect or disconnect with a property as soon as they walk through the front door: the spatial dimensions, the views from the window, the colour scheme and various other features that can potentially cloud their judgment of whether the property is a smart investment prospect. For investors starting out in the field, ‘emotional investing’ can be particularly dangerous.

 

When a property is being purchased for pure investment purposes there are several factors one should consider, such as:

 

·         The price of the property, which should typically be at or below market value;

·         Whether the  property has good prospects for strong capital growth or high rental returns;

·         Whether the property is tenant friendly; i.e. in close proximity to amenities such shopping centres, schools and public transport;

·         Whether the potential income from the property is going to be sufficient to meet your needs, commitments and lifestyle.

 

One of the most exciting aspects of real estate is the unique character that all potential property investments have. However, investing with emphasis on emotion is a dangerous practice that should  be consciously avoided.

 

Such can be achieved through keeping financial and strategic considerations at the top of your priority list - an approach that should set you in the right direction to making a smart, and potentially lucrative, property investment.

 

For more information about property investment options in your area, please contact your local CENTURY 21 office.


0 comments | Posted by Charles Tarbey on 24/07/2012 at 11:26 AM | Categories:

How to find the right financing solution

With the Reserve Bank electing to hold the official cash rate over July and RP Data-Rismark reporting that national housing values jumped one per cent in June, some investors may be looking to enter or re-enter the residential property market. For most of these individuals, this will require the borrowing of finance from a lender – something which, for some, may be an uncertain and confusing process.

 

In light of such, I have decided to share with you the following piece provided by Harry Bozin from CENTURY 21 Home Loans:

 

Top tips for finding the right financing solution

 

By Harry Bozin, CENTURY 21 Home Loans

 

Investing in real estate is one of the most important financial decisions anyone can make and for the majority of Australians, obtaining finance from a lender is a necessary part of the acquisition process.

 

Whether you're a highly experienced investor or not, getting the financing of your investment right from the outset is important because property investments are enduring commitments that not only need to be financially viable at the time of purchase, but in the long term as well.

 

In light of this, I have decided to share some of my top tips for securing appropriate property financing solutions.

 

1. Consider your long term objectives

 

It is important to consider your long term objectives when seeking suitable finance. By this I don't only mean your property purchase objectives, but your plans for family, career and lifestyle as well. I emphasise these factors because each and every one of them will impact on your long term capacity to repay debt.

 

The answers to these questions will ultimately put you on a path towards determining the right financing option for your long term needs.

 

2. Do your homework on financing options

 

The considerations associated with financing the purchase of a property go much further than simply getting the lowest interest rate possible. It can therefore often be beneficial to examine the different financing options that are available in the market.

 

As you explore options, you'll invariably come across two main types: fixed and variable rate loans.

 

Both have respective levels of risk and potential reward. While a fixed rate will give you security and certainty, it could also incur substantial costs if you needed to break the loan early. Conversely, a variable rate would increase your flexibility and could possibly help you save money, but your repayments are at the behest of any interest rate fluctuations.

 

Alternatively, if you are purchasing a property solely for investment purposes you may wish to consider interest only loans, which make the interest on your loan fully tax deductable. With a principal and interest loan, only the interest component is deductible, so it is always wise to check with your accountant regarding your own personal circumstances.

 

You may also look to tap into the equity in your existing property investment/s to secure a line of credit loan. If your home is currently worth $600,000, and you have $200,000 remaining to pay off on your mortgage, you have $400,000 worth of equity - a proportion of which you may be able to use to purchase other investments, depending on your personal credit circumstances.

 

Other financing options may include, but are not limited to, split loans, "no frills" loans, professional loan packages and self managed superannuation funding.

 

At the end of the day your financing solution should be based on your financial position, the features you require, the predicted duration of your investment and also current and projected market conditions. These factors - however, can be both both complicated and changeable, which means that it is often useful to seek professional advice from a mortgage broker, who can crystalise your options and help you identify a financing solution that it most suitable for your long term requirements.

 

3. Assess your costs

 

With any real estate purchase, there is a range of associated costs above and beyond the price of the property itself which, if unaccounted for, can stagger your plans and/or impact the viability of your investment. These costs should be factored into any decision regarding financing options, as they will help you to ascertain how much money you actually have to work with, and how much finance you will need to borrow.

 

One of the biggest initial outlays will be your deposit, which is usually five per cent of the purchase price. However, if you are borrowing 80 per cent or more of the purchase price you will be required to pay mortgage insurance, which is an additional fee.

 

In addition, you should allow funds for the loan application fee, valuation fees, taxes, stamp duty, legal costs, building and pest inspection expenses, and insurances.

 

 

4. Be resilient

 

One of the most disillusioning prospects an investor faces is rejection of their finance application. However, an answer of "no" doesn't mean you'll never get money again; it just means that in a particular instance your circumstances didn't meet the policy of the lender.

 

Given such, if your finance application is rejected, it is always a smart move to find out why. The reason could be that your credit file contains inaccurate information about your financial status, or that your existing debt levels are perceived to be too high. Knowing this information could put you in a position to rectify the default, pay off some debs and successfully reapply in the future.

 

Examining these aspects of finance is always a great place to start for anyone looking to build their portfolio. However, no matter what experience level you're at, the advice and guidance of an experienced mortgage broker can be invaluable in helping you to find the best financing solution for your needs.

 

For more information on finance options please feel free to contact me on (04) 1186-5959 or email harry.bozin@century21homeloans.com.au


0 comments | Posted by Charles Tarbey on 17/07/2012 at 11:51 AM | Categories:

Rental listings increase annually

According to RP Data’s latest Property Pulse report the total number of rental property listings across Australian capital cities increased 6.8 per cent over the year ending July 8.

 

The ACT saw the biggest percentage increase in new listings, almost doubling from 236 to 466.

 

Out of all the capitals Melbourne had the most newly listed rental properties with 12,807, up from 9437 the year before. The total number of properties listed for rent in Victoria was 29,173.

 

Victoria was followed by New South Wales, which had 12,129 new listings, up from 9,547 the year before. The total number of properties on the rental market in NSW was 23,254.

 

Conversely, the number of rental properties in Western Australia fell annually, dropping from 8,291 to 6,961.

 

The Northern Territory was the only state where rental stock had decreased. There were 428 new listings, down from 446 the year before. The total number of rental properties was 693.

 

For information about the residential property market in your area, please contact your local CENTURY 21 agent.


0 comments | Posted by Charles Tarbey on 17/07/2012 at 11:50 AM | Categories:

Reserve Banks holds rates in July

 

At its monthly meeting in Sydney, the Reserve Bank of Australia (RBA) elected to hold the official cash rate at 3.5 per cent. CENTURY 21 expects the decision to have a relatively stabilising impact on the residential property market in a time marked by economic transition and uncertainty. 

 

Following the decision, Chairman of CENTURY 21 Australasia, Charles Tarbey, said: “In a decision that should provide some stability for property owners, the Reserve Bank has put the official cash rate on hold - a move that we expect will bring some certainty to the domestic market.”

 

The decision follows back-to-back rate cuts in May and June, which resulted in the big four banks considerably lowering their interest rates. Such reductions functioned, in combination with changes to homebuyer concessions, to stimulate market activity in many areas and push national home values upwards over of the month of June.

 

Figures from RP Data-Rismark showed that capital city home values rose one per cent over June,

 

In his statement following the meeting, RBA Governor Glenn Stevens cited strong GDP growth, on-target inflation and improved domestic labour market conditions as key factors behind the decision.

 

“As a result of the sequence of earlier decisions, there has been a material easing in monetary policy over the past six months. The Board judged that, with inflation expected to be consistent with the target and growth close to trend, but with a more subdued international outlook than was the case a few months ago, the stance of monetary policy remained appropriate,” said Mr Stevens.

 

Despite maintaining the official interest rate in July, many analysts have predicted the RBA to make at least one further rate cut during the remainder of the year.

 

For more information about the residential property market in your areas of interest, please feel free to stop by your local CENTURY 21 Real Estate office for expert, clear advice. 


0 comments | Posted by Charles Tarbey on 11/07/2012 at 10:11 AM | Categories:

Home values rise over June

 

Back-to back interest rate cuts have helped to restimulate Australia’s residential property market, with the RP-Data-Rismark Home Value Index recording an average one per cent increase in home values over the month of June – the biggest monthly jump the Index has seen in over two years.

 

The Index showed that six out of the nation’s eight capital cities experienced increases in housing values over the month, with the exceptions of Adelaide and Darwin, which saw falls of 1.1 per cent and 0.7 per cent, respectively.

 

Hobart was the best performer, posting a 2.7 per cent jump, followed by Canberra (+2%), Perth (+2%), Sydney (+1%), Melbourne (+1%), Brisbane and the Gold Coast (+1%).

According to RP Data’s Research Director, Tim Lawless, the healthy capital gain in June was not a surprising result, as the Index had shown consistent increases over the course of the month, foreshadowing a positive outcome.

 

Mr Lawless attributed the monthly upturn to consecutive RBA interest rate cuts in May and June, which had worked to spur demand in the property market.

 

Commenting on the RBA’s July rate hold, Chairman of Century 21 Australasia, Charles Tarbey, said:

“In a decision that should provide some stability for property owners, the Reserve Bank has put the official cash rate on hold - a move that we expect will bring some certainty to the domestic market.”

 

For information about the residential property market in your area, please contact your local CENTURY 21 agent.


0 comments | Posted by Charles Tarbey on 11/07/2012 at 10:11 AM | Categories:

Investor tips: finance pre-approval and market appraisals

As investors or prospective property buyers, it is important to be in a position to act quickly when attractive purchase opportunities arise. To this end, I’d like to share with you the following piece provided by CENTURY 21 Home Loans, which appeared in the May 2012 issue of CENTURY 21 Wentworth’s Property Investor. 

Forward planning essential for investors 

For many investors looking to build up their property portfolios, financing will likely be a key consideration and determinant of their investment success.  And just as planning ahead is important to ensure that your property selection is the most appropriate choice for your investment strategy, so too is it intelligent to consider your loan in advance - ensuring you are best placed to act quickly and decidedly when an attractive purchase opportunity arises.

Obtaining pre-approval for finance is one such way that investors can look to prepare themselves for a future property purchase.  Harry Bozin, Head of CENTURY 21 Home Loans, believes that for those investors considering further acquisitions, it is a certainly a good idea to see if a loan pre-approval can be secured well in advance of identifying a potential investment.

"With the lending criteria of banks constantly evolving, investors may find that they no longer actually qualify for a loan despite their own situation remaining unchanged," said Harry Bozin.

"A CENTURY 21 Mortgage Consultant will be able to let you know pretty quickly if pre-approval is possible, or more importantly if not, the reasons why.

"Armed with such knowledge, they can then go about working with their mortgage consultant to make any necessary and possible changes required by lenders to ensure that they are once again conforming with policies and able to gain pre-approval."

In addition to gaining financing pre-approval, having market appraisals regularly conducted on the property/properties in your portfolio is another valuable means of staying ahead of the game.

"Having an annual market appraisal will ensure you remain informed of the available equity in each of your properties, allowing you to tap into that unused equity," continued Harry Bozin.

"Having a solid knowledge of these values will allow you to gain a better understanding of your financial position and the subsequent amount you can afford to invest into your next acquisition," concluded Harry Bozin.

As property investors will know, it is often the case that unique and attractive purchase opportunities can present themselves out of the blue with quick and decisive action needed in order to secure them.  By planning ahead and remaining up to date with the values in your portfolio, investors can ensure that they are ready and able to take advantage of chance investments as they arise.

For more information regarding financing for your investment portfolio, please contact CENTURY 21 Home Loans.


1 comments | Posted by Charles Tarbey on 03/07/2012 at 9:06 AM | Categories:

The “Do’s” of renovating for sale

With the Australian property market as a whole having seen stagnant or depressed growth this year, some prospective vendors may be looking for cost efficient ways to increase the value and marketability of their properties. 

It is not uncommon for people to renovate, or ‘spruce up’, a property before selling it. However, the dilemma that many vendors come across is in knowing where to invest to add value and come out ahead in the sales prices that they achieve. 

Given such, I have decided to share a few useful tips to help you get the most out of the property renovation process:

1. Market research;

Before embarking on renovations, consider researching your property’s location and the demographic/s related to it. Try looking up local market statistics and perhaps seeking help from a local real estate agent to find out what kind of people would be interested in renting or buying your property, and then make renovations accordingly.

Another way to get an idea of what type of renovations might be most profitable is to examine the growth of different industries within the home sector; because when a certain industry shows substantial growth and is also predicted to continue growing, you generally know that that area is one that consumers value and will likely be willing to spend money on. 

2. Plan and stick to budget;

When renovating a property it is easy to get caught up in the process and overspend. Given such, it is always a good idea to establish from the outset not only how much you are able to spend, but also how much you will need to spend to enhance the value of the property. 

Once you’ve established a budget, you should then plan and prioritise renovations accordingly. If you can’t afford to renovate everything at once, prioritise your renovations based on the impacts that they will likely have on the property’s value. For example, if your kitchen is the major issue and needs a $20,000 renovation, save up until you can afford that renovation, as opposed to spending money on a bunch of smaller jobs that may have less overall impact.

3. Focus on kitchens and bathrooms;

Kitchen and bathroom renovations will usually cost the most money but will also likely add the greatest value to your property. This is because no matter how the rest of a property is used, these rooms are (in most cases) most consistently utilised by home occupants in their day-to-day lives.  

The latest trends in kitchens and bathroom designs include open plan and maximised storage space areas, large ceramic tiles or wood floors in neutral colours, marble or concrete countertops as well as stainless steel appliances. Large granite tiles have also become increasingly popular for making over floors, baths and showers.

4. Wash and repaint walls;

Applying a fresh coat of paint on the interior of your property probably won’t cost you a great deal of money and could considerably add resale value to it. You may want to consider doing the job yourself or hiring a contractor depending on your capabilities and the level of time, labour and effort you are willing to expend.

Also, remember to clean interiors before painting them as doing such will get rid of lingering unpleasant smells, particularly in areas that are susceptible to smell absorption such as bathrooms and kitchens.

While you should repaint walls, try not to go overboard with colour. When renovating for sale it is always important to allow prospective purchasers to visualise their own colour themes, paintings and furnishings in the space. Given such, it is a wise idea to stick to neutral shades such as whites, off-whites, beige and coffee colours.

 

 


5 comments | Posted by Charles Tarbey on 03/07/2012 at 9:05 AM | Categories: