Viewing by month: August 2012

Ways to save money on your electricity bills

 

 

In a recent speech before the Energy Institute of Australia, Australia’s Prime Minister, Julia Gillard, noted that the average Australian household has experienced a 48 per cent rise in electricity bills in the last four years.

 

In the face of such dramatic price rises, some home occupiers may be looking for strategies to mitigate their electricity costs. To this end, I’d like to share the following tips:

 

1. Be conscious of stand-by modes

 

According to a December 2011 report by the Australian, State and Territory, and New Zealand Governments, entitled ‘Third Survey of Residential Power Consumption of Australian Homes – 2010’, while newer products are by and large using less standby power, many individual products continue to use more power in low power modes than is required to perform the desired function.  

 

As such, home occupiers may want to consider avoiding the use of stand-by power options on appliances and home entertainment and office equipment, including televisions, game consoles and computers. 

 

2. Cut down on electricity and hot water usage

 

Cutting down on electricity and water consumption can often take a degree of conscious effort – however, if done effectively, such effort can potentially lead to considerably reduced household electricity costs.

 

There are a number of simple steps that can be taken to try and reduce electricity and hot water consumption including, but not limited to: turning lights off during the day and when no one is in a room; occasionally hand washing and drying dishes and clothes; unplugging seldom-used appliances and chargers; limiting showers to shorter time periods; setting computers to ‘sleep’ or ‘hibernate’ modes; and increasing clothing and covering as opposed to turning on heaters and the like.

 

3. Consider a power monitor

 

Another potential way to address electricity costs is to identify home appliances and systems that are not operating in energy efficient manners.  One possible way of doing such is to install a power monitoring system – something that would likely incur a home owner an up-front expense, but could potentially save them a great deal of money in the long-term. 

 

There are a number of benefits often associated with power monitoring systems, the main of which being the increased understanding that home occupiers can potentially gain through having access to qualified data on their energy use. 

 

Through appraising the data generated by a power monitor, a home occupier can ascertain how and where electricity is being used, which may help them to identify prospects for improving efficiency and reducing electricity consumption. 

 

In summary

 

Dealing with consistently rising electricity prices is evidently an issue that many Australians are facing. However, through making some minor adjustments to mindsets, habits and behaviours there are certainly prospects for mitigating potential increases to household electricity costs.

 

 


3 comments | Posted by Charles Tarbey on 29/08/2012 at 12:00 AM | Categories:

The tax benefits in renovating your home

 

An increasing number of property owners are deciding to invest in renovations to increase the value of their property. However, many Australians are still unaware of the tax benefits that can be associated with such projects.

In light of this, I’ve decided to share with you the following article provided by BMT Tax Depreciation, which appeared in the August 2012 edition of CENTURY 21’s Property Investor.

Australian spending on renovations hit $31 billion last year.

The current economic climate has made Australians hesitant to take on additional debt. Rather than purchasing a new home, people are investing in renovation projects on their current properties.  TV shows such as 'The Block' and 'The Renovators' have become popular and are providing inspiration and ideas for home owners to improve their properties.

Property owners are often unaware of the tax deductions available to them. It is possible for Australians to claim thousands back after renovating a property which generates income. Renovations can be expensive, so it makes financial sense to take full advantage of the tax deductions available during the first five years of property ownership. As a building gets older, items wear out - they depreciate. The Australian Taxation Office allows property owners to claim this depreciation as a deduction. Depreciation can be obtained by any property owner who obtains income from their property.

Property depreciation is commonly missed because it is a non-cash deduction; owners do not have to spend money to claim it. To ensure property owners are making the most of the tax deductions available, they should consider a pre-renovation depreciation report. Old assets within a property can be worth thousands of dollars. When these old assets (like carpet and hot water systems) are replaced, the owners may be entitled to claim them as a tax deduction. A Quantity Surveyor, who is qualified to calculate values and construction costs, can ensure that owners are not throwing dollars away.

Essentially, if an item is removed or replaced as a result of a renovation, the current value of the item can be written-off as a tax deduction in the year that the expense is incurred. A Quantity Surveyor will complete a report prior to a renovation or refurbishment to identify the value of all assets within the property. A second report is then prepared after completion of the renovation, identifying the value of all new assets within the property. The removed assets can be written-off immediately.

How to maximise depreciation deductions

During renovations, when it comes to deciding which new item to install in an investment property, the depreciation potential of the new item should be considered. For example, when spending $2000 on new flooring, owners may consider the depreciation potential of different options. Depreciation deductions are also available for the structure of qualified buildings. Any construction (such as a new roof, walls or ceiling) carried out after July 18, 1985 (residential property) and July 20, 1982 (non-residential property) is eligible for the capital works allowance (Division 43). A Quantity Surveyor who specialises in tax depreciation will always take into consideration renovations carried out by previous owners as this becomes an additional tax benefit for the current owner.

Always consult a depreciation expert about an investment property's depreciation entitlements. Taking full advantage of the available tax benefits on an investment property can improve a property owner's cash flow each financial year. BMT Tax Depreciation offer obligation free advice about a property's depreciation potential pre and post renovation. Simply call 1300 728 726 to discuss any property scenario.

For more information on BMT Tax Depreciation’s Australia-wide service, please call 1300 728 726 or visit www.bmtqs.com.au.

 


3 comments | Posted by Charles Tarbey on 27/08/2012 at 12:00 AM | Categories:

How to make the most out of a home valuation

Before a home owner or investor is able to purchase, refinance, or access the equity in their property, a loan provider will require a valuation to take place in order to determine the security value of a property.

A number of factors are taken into account when determining a property’s value including, but not limited to: the location of a property, the structural integrity of the building, the ease of access to amenities and planning restrictions. However, there are a number of simple steps that a property owner can take to ensure that their property’s value is maximised, including:

·         Make sure that the property is clean and tidy: It may seem obvious, but allowing a valuer to assess the integrity of a space without being distracted by clutter is important to ensuring that the valuer ascribes the property a fair and reasonably accurate value;

·         Repair any damage to the property before the valuation: There is no point providing a valuer with a list of things you plan to do, as the valuation analyses the current value of a property;

·         If possible, have a floor plan on-hand in order to give the valuer a clear perspective of the property’s special dimensions;

·         Be polite, and don’t try to “sell” your home: A valuer will likely have predefined tasks and consistent processes that they undertake in order to determine how much a property is worth. Through being welcoming, hospitable and well mannered you can work towards ensuring that they are in a positive and comfortable state of mind to assess your property’s value, which is conducive to a better outcome on your behalf.

For more information on residential property prices in your area, please contact your local CENTURY 21 Real Estate agents.


1 comments | Posted by Charles Tarbey on 22/08/2012 at 12:00 AM | Categories:

Interest rate update

At its monthly meeting in Sydney, the Reserve Bank of Australia (RBA) elected to hold the official cash rate at 3.5 per cent. This decision was welcomed by CENTURY 21 and we expect that it will help to continue to stabilise Australia’s residential property market.

Speaking on the RBA’s second consecutive monthly rate-hold, Chairman of CENTURY 21 Australasia, Charles Tarbey, said: “For the second month running we have seen the Reserve Bank hold the official cash rate at 3.5 per cent – a decision that should give property owners a degree of certainty and stability, as well as encourage buyers to re-enter the market.”

In its official statement following the announcement, the Reserve Bank cited on-trend GDP growth, on-target inflation and low domestic unemployment as some of the key factors behind the decision.

The Reserve Bank’s decision followed the release of RP Data-Rismark’s Hedonic Home Value Index, which showed that median home values across Australia’s capital cities increased by 0.6 per cent in July, off the back of a one per cent rise in June.

Similarly, The Australian Bureau of Statistics reported a 0.5 per cent increase in capital city house prices over the June quarter as well as a one per cent rise in retail turnover during June.

“The latest housing and retail growth statistics further indicate that the RBA’s decisions in recent months have helped to improve consumer confidence and activity within various key markets,” continued Charles Tarbey.        

“In particular, we have seen capital city home values stabilise in many markets – a factor that when combined with relatively low interest rates, should be positive for the property market,” concluded Charles Tarbey.

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. Additionally, if you would like to speak to a mortgage professional about the impact of this rate-hold on your mortgage, or to find out more about suitable loan packages for your circumstances, please contact CENTURY 21 Home Loans.


2 comments | Posted by Charles Tarbey on 15/08/2012 at 3:15 PM | Categories:

Capital city housing values update

Australian capital city dwelling prices rose 0.6 per cent in July, following a 1.0 per cent increase during June, according to RP Data-Rismark's Hedonic Home Value Index.

The July figures mean that dwelling values are down only 0.6 per cent from the start of the year, a rebound from figures released on May 30 which showed housing prices 2.2 per cent below the calendar year starting level.

According to RP Data’s Research Director, Tim Lawless, the figures may suggest increased activity in the housing market due to advantageous financing opportunities.

“The July result, when viewed together with the positive June results, suggests housing markets may be starting to respond to lower mortgage rates, which according to the Reserve Bank of Australia's (RBA) latest Board meeting minutes are around 50 basis points below their 15-year average," Mr Lawless said.

The increases in dwelling values across capital cities were linked mainly to the Sydney and Melbourne markets: Sydney’s house prices increased by 1.2 per cent, while Melbourne recorded a gain of 1.4 per cent.

RP Data-Rismark’s data also showed that the value of units within capital cities rose by 0.7 per cent, while rental prices increased by 3.3 per cent over the first seven months of 2012.

June quarter statistics released by the Australian Bureau of Statistics revealed that Darwin had the largest increase in house prices from March to June, by means of a 5.4 per cent rise. This was followed by Sydney (1.4 %), Perth (0.6%), Adelaide (0.5%) and Brisbane (0.1%).

The only capital cities to see value decreases over the June quarter were Melbourne (-0.4%), Hobart (-0.4%) and Canberra (-1.3%).


0 comments | Posted by Charles Tarbey on 15/08/2012 at 3:15 PM | Categories:

Population growth and the housing market

According to the Australian Bureau of Statistics (ABS), Australia’s estimated resident population is 22.3 million as of June 2011, a rise of 15 per cent since June 30, 2011.

 

In the short term, population growth was above the long-term average for 2011, increasing by 302,565, which is 22.5 per cent higher than the long-term average increase of 246,973.

 

The Australian Bureau of Statistics’ data suggests that the increase in population growth could be partly due to a recent swell of long term overseas arrivals and net permanent residents. The ABS recently reported that in April 2012 alone, 274,000 residents arrived in Australia – an increase of 35.4 per cent from the same time in 2011.

 

For property investors, Australia’s growing population could potentially offer some profitable opportunities; rent yields are expected to increase in metropolitan areas and some investors may consider looking towards new developments to capitalise on long term demand.

 

The population figures released by the ABS reinforce a fundamental issue that will likely continue to underpin the residential property market throughout the medium-term – that is, there is an ongoing need for housing in Australia, which is good news for buyers and sellers alike.

 

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


1 comments | Posted by Charles Tarbey on 10/08/2012 at 11:21 AM | Categories:

A way to maximise your existing property space

Whether you are building a new home or have some extra space on your existing plot, constructing some additional rooms to act as a separate dwelling – a granny flat, can potentially be a great way to maximise the benefits associated with your property.

 

When a property investor is starting out, it can sometimes be beneficial for them to first undertake a lower-risk project. A small-scale development like a granny flat is an example of such; they are not only relatively cheap but can often offer immediate cash flow, which can help to ensure that the investment remains financially sustainable.

 

In the current market, there is considerable demand for granny flats, particularly in metropolitan areas and their surrounding suburbs. With rents looking set to continually rise, residing in a granny flat could very well become an increasingly attractive option for young individuals or couples.

 

For property owners with a family or looking to have a family, a separate dwelling could provide a means through which to set their children up for an independent lifestyle. In today’s property market, young people are finding it increasingly difficult to move out of home due to the financial independence that is required to make such feasible. A granny flat could potentially be an option that enables children to move out of home (or at least away from it), but at a fraction of the usual cost.

 

Adding a granny flat to your home or investment property could potentially act as a low-risk investment, or provide a measure of residential security and independence for your family members – perhaps the greatest benefit of this type of dwelling is that it has the capacity to deliver both. However, before undertaking any type of investment you should always ensure that the property is going to be financially feasible for you.

 

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


2 comments | Posted by Charles Tarbey on 10/08/2012 at 11:21 AM | Categories:

Looking to co-purchase? Consider a co-ownership agreement

Real estate is one of the largest asset classes in the world today, yet many individuals do not have the financial capacity to purchase a property on their own. For these individuals, co-buying with family and/or friends may be a good option.

Co-ownership can offer many benefits, the most obvious being the lower financial contribution required from each purchaser involved. However, before entering into such arrangements, it is important to consider the possibility of conflict arising between you and your prospective co-owner at some point during the future.

Before co-buying you will need to consider the legal structure for your purchase – that is, whether you will own the property as joint tenants or tenants in common.

A joint tenant structure is usually entered into by married couples, as each investor owns the property in equal share under an ‘all or nothing’ arrangement, which means that if one tenant dies the rights to the property vest in the remaining tenant(s).

For purchasers looking to buy for pure investment purposes, a tenants in common structure is usually undertaken. This means that although each purchaser has a share in the investment, each is also entitled to sell their share at any time without consultation – something which can potentially spell trouble for the remaining tenant(s).

This is why investors should consider co-ownership agreements; these can take into account all possible eventualities and enable each owner to implement contingency measures prior to the property purchase. For example, if one owner suddenly wished to sell their share, a co-ownership agreement could ensure that the remaining owner(s) had first right of refusal to buy it.

At the end of the day, it is important to make sure that your real estate investment is secure, and for those considering co-purchasing, a co-ownership agreement could be an important step to ensuring such.

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


0 comments | Posted by Charles Tarbey on 01/08/2012 at 8:44 AM | Categories:

Housing demand may support property market as mining slows

With a Deloitte Access Economics report recently forecasting the mining boom to slow in as little as two years, there is a high chance that investors will be keeping an even closer eye on future developments within Australia’s property market.  

One particular think tank, BIS Shrapnel, believes that investment in the residential property sector will make up for the projected shortfall in mining activity.

“Mining investment will soon stop growing. It should remain high but it will stop growing. In its place we see an upswing in residential property investment from later this year”, said
Senior Economist Tim Hampton.

According to BIS Shrapnel’s ‘Long Term Forecasts 2012-2027’ report, Australia’s forecasted dwelling shortage will drive future demand for residential and property developments, underpinning the market’s medium term growth.

BIS Shrapnel predicted that continual demand for housing will be sustained by consistent population growth and increasing immigration.

Mr Hampton also described the knock-on effect that investment in the property market could have on other sectors of the economy, citing accountants, lawyers and property managers as examples.

For more information on residential property investment in your area, please contact your local CENTURY 21 Agent. 


0 comments | Posted by Charles Tarbey on 01/08/2012 at 8:38 AM | Categories: