Viewing by month: August 2013

Housing affordability continues to rise

Housing affordability within Australia has continued to rise according to the Housing Industry Association (HIA), with the HIA-CBA Housing Affordability Index recording a 4.4 per cent increase over the June 2013 quarter. 

HIA chief economist, Dr Harley Dale, said “a synchronised increase across the capital cities and non-metro areas drove the further improvement in the June 2013 quarter,” taking housing affordability 16.7 per cent higher than in mid-2012.

“These are certainly encouraging results for those entering the market at this time in the cycle,” said Dr Dale, adding that “the considerable reduction in interest rates is more than offsetting recent dwelling price increases.”

However, Dr Dale noted that “current improvements in housing affordability do not represent structural shifts in Australia’s affordability; rather, they represent the dominant impact of cyclical changes in lending rates which will of course be prone to reversal at some point.”

“Genuine, structural improvements to affordability are contingent on a stock of housing supply that grows commensurately with the population and its housing needs,” he explained. 

“Policy reform, led by the Federal Government, needs to be implemented to drive a sustained improvement to residential construction so as to genuinely address the housing affordability challenge in Australia.”

In the June 2013 quarter, the HIA-CBA Housing Affordability Index increased in all seven capital cities reported. The strongest quarterly increase occurred for Brisbane, which saw a rise of 10.4 per cent, followed by Hobart (10.0 per cent), Adelaide (7.7 per cent), Canberra and Perth (4.1 per cent), Sydney (3.3 per cent), and Melbourne (2.2 per cent). 

Outside of the capital cities, affordability improved in all six non-metro regions reported. The strongest quarterly increase was seen in regional Queensland, with a rise of 9.6 per cent, followed by the non-metro areas of Tasmania (8.1 per cent), South Australia (7.7 per cent), Victoria (5.3 per cent), Western Australia (4.5 per cent), and New South Wales (2.9 per cent).

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


0 comments | Posted by Charles Tarbey on 30/08/2013 at 12:00 AM | Categories:

Tips for maximising the value of a real estate agent

 

It is important for vendors to be strategic when selecting and building their relationships with real estate agents. But not every vendor knows the best approach to take. In light of this, we have decided to share the following story by CENTURY 21 Australasia’s Chairman and Owner, Charles Tarbey, which is currently appearing in the August edition of CENTURY 21’s Property Investor. In this article, Charles shares some helpful tips and tricks for getting the most out of a real estate agent.

HOW TO GET THE MOST OUT OF A REAL ESTATE AGENT

When you are thinking about selling a property, securing the best real estate agent is a vital consideration – agent choice is often the key difference between a great or mediocre result. So how can you ensure that you not only pick the right agent, but also get the most out of their services?

 

Here are my top tips for selecting, and maximising the value of, a real estate agent.

 

DON’T GO WITH THE CHEAPEST AGENT

 

It is critical that you don’t make finding the cheapest agent, or the agent that offers you the least amount of advertising, your first priority. Why? Because if an agent can’t negotiate an effective fee for service with you, it’s unlikely they’ll be able to negotiate an effective sale price for your property.

 

FIND A PERFORMANCE-BASED AGENT

 

There is a tendency to believe that agents with many ‘For Sale’ signs are the most effective and capable of selling property. However, in this particular context, when perception meets reality, reality often comes off second best. The reason for this is that ‘For Sale’ signs are predominantly an indicator of an agent’s activity, not their results – an agent may have a large amount of listings, but they might not actually be selling anything.

 

Try to keep in mind that a ‘For Sale’ sign is initially a sign of success, but after four weeks, it becomes a sign of an agent’s failure to get the job done.   

 

I would recommend searching for agents that have the most ‘Sold’ signs in your area, as these agents will most likely be performance-based as opposed to activity-based.

 

Once you’ve identified an agent with a large number of ‘Sold’ signs, you may want to consider knocking on the front doors of some their sold properties to ask the owner-occupiers how the selling process went. Doing so will allow you to gain some first-hand insights into the agent’s previous performance, which may help you to decide whether or not the agent is right for you.

 

FIND AN AGENT THAT TREATS YOU LIKE THEIR ONLY CLIENT

 

It is reasonable to expect that your agent will meet with you on a weekly basis to give updates on all developments relating to your property’s sale – not just in person, but in writing as well. 

 

Remember – if it’s not in writing it didn’t happen, so make sure that your agent commits up-front to giving you regular written updates. If your agent is prepared to document updates, it will not only show that they are serious about the transaction, it will also give you a tangible reference point to make them accountable should they fail to deliver on their undertakings.

 

As an extension of this point, I would advise to look for an agent that speaks to you only about your property, and not about how busy they are with everybody else’s. It is relatively safe to assume that if an agent doesn’t give your property adequate attention in your presence, they’ll struggle to do so when you’re not around – so aim to find an agent that treats you like their only client.

 

BUILD AN OPEN AND HONEST RELATIONSHIP WITH YOUR AGENT

 

Building an open and honest relationship with your agent is one of the best things you can do in terms of ensuring that the agent’s advice is aligned with your best interests.

 

Real estate practitioners are generally very sociable people who want to achieve the best possible outcomes for their clients. The best agents, however, are the ones that give honest and open advice – even when their clients don’t necessarily want to hear it.

 

Of course, as a vendor, you want to achieve the best sale price for your property with the minimum outlay possible. However, the worst thing you can do is make your agent feel uncomfortable about managing your price expectations or giving you bad news.

 

Your agent needs to feel at liberty to give you honest and accurate information on buyer feedback, market conditions and the like so that you can make a fully informed decision about when to sell, and at what price.

 

BE FLEXIBLE WITH YOUR MARKETING

 

There are usually two reasons as to why a property doesn’t sell – either the vendor’s price expectations are too high or the marketing of the property is poor. If you agree to and sign off on a marketing strategy with your selling agent, it is important to hold the agent to delivering that strategy in full.

 

In saying that, it is also important to be flexible with your marketing and to adjust your strategy if need be.

 

In order to know when flexibility is required, you will need to be able to properly assess whether or not your existing strategy is working. As such, you should aim to meet with your agent during the first one to two weeks of open for inspections to discuss buyer feedback and interest in the property.

 

If buyer feedback is poor and interest is low, the agent may recommend that you increase your marketing budget. Though this may not be what you originally agreed upon, I would suggest being open to increasing your marketing spend if your original strategy has proven ineffective. Doing so will likely increase your chances of not only selling, but achieving a strong sale price.

 

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 clear and expert advice.


1 comments | Posted by Charles Tarbey on 23/08/2013 at 12:00 AM | Categories:

Data suggests a strengthening property market

 

CENTURY 21 believes that recent increases in home loan approvals and dwelling price growth could suggest ongoing strengthening of Australia’s residential property market.

 

“Over the past month, a number of leading indicators have pointed to improving market conditions, which are encouraging signs leading into spring,” said Chairman and Owner of CENTURY 21 Australasia, Charles Tarbey.

 

“The Australian Bureau of Statistics recently released housing finance figures showing that the number of home loans approved in May lifted by a seasonally adjusted 2.7 per cent.

 

 

“In additional, RP Data-Rismark’s Home Value Index recorded a 1.6 per cent increase in July 2013, taking the cumulative recovery in capital city dwelling values to 6.5 per cent since May 2012.”

 

The Genworth Homebuyer Confidence Index, which measures homeowner sentiment among mortgage holders, surged 7.2 per cent over the July quarter to reach its highest level on record.

 

“These statistics, in combination, suggest that confidence levels may be rising which, in turn, could translate to increased buying and borrowing activity in coming months,” continued Charles Tarbey.

 

“With the Reserve Bank reducing the official cash rate by another 25 basis points in August, there is a chance that many more buyers will step off the sidelines leading into spring,” concluded Charles Tarbey.

 

CENTURY 21 encourages prospective buyers that are looking to purchase real estate to ensure they have obtained the appropriate professional property and finance advice before doing so. 

 

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 clear and expert advice.


0 comments | Posted by Charles Tarbey on 22/08/2013 at 12:00 AM | Categories:

Survey finds that most renters are happy with their landlords

A recent survey by domain.com.au has found that 73 per cent of renters have a good relationship with their landlord, suggesting that many investors are doing a good job of keeping their tenants happy. 

The real estate portal surveyed 1,241 renters across Australia over July 2013 and found that almost three quarters of respondents were happy with their landlord. 

Respondents also reported that their landlords address problems with the property and fix issues in a timely and efficient way, and most had their rent increased by no more than $5 per week. 

However, 22 per cent were paying more than 50 dollars extra per week than when they moved in.

Despite these figures, the survey found that 60 per cent of respondents thought their rental increases had been, on the whole, fair – and 65 per cent believed they were paying a fair market rate.

Domain.com.au’s spokesperson, Stuart Benson, said ““We hear stories all the time about nightmare rental properties with broken fixtures that the landlord is unwilling to fix, and greedy landlords unfairly jacking up the rent in a competitive market, however this does not seem to the common experience.” 

“It is nice to see that on the whole tenants are quite satisfied with their landlords, and as more and more people are choosing to rent for longer in order to save money for a house deposit or for lifestyle reasons, maintaining a good relationship between landlord and tenant is important,” concluded Mr Benson.

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 clear and expert advice. 


0 comments | Posted by Charles Tarbey on 13/08/2013 at 12:00 AM | Categories:

Rate cut should encourage pre-spring activity

CENTURY 21, the largest real estate sales organisation in the Asia Pacific region, believes that the Reserve Bank’s decision to reduce interest rates to 2.50 per cent should help to further improve conditions for property buyers and mortgage holders leading into the traditionally busy spring selling season. 

“For the second time in 2013, the Reserve Bank has elected to cut the cash rate by 25 basis points to bring the official benchmark to a 53- year low of 2.50 per cent,” said Chairman and Owner of CENTURY 21 Australasia, Charles Tarbey. 

“This decision will likely be a shot in the arm for the property market leading into the spring selling season.”

As part of its decision, the Reserve Bank reasoned that it was appropriate to reduce the cash rate in light of inflation moderating over recent months and economic activity.

The Reserve Bank’s decision follows the recent release of RP Data-Rismark’s Hedonic Home Value Index results, which showed that median home values in Australia’s capital cities rose 1.6 per cent in July 2013, taking the cumulative recovery in residential home values to 6.5 per cent since the market bottomed out in May 2012.

Additionally, the Genworth Homebuyer Index jumped from a record-low of 93.4 points in March 2013 to 100.1 points at the end of July 2013, the highest level the Index has recorded since it was first calculated in 2007.

“Spring has traditionally marked a season of renewed enthusiasm within real estate, and with interest rates at historic lows for the time being, some market spectators may be expecting an increase in buying activity over the coming months,” continued Charles Tarbey. 

“The seasons of real estate have, however, become much less pronounced in recent times, and the impact of this latest cut will likely depend heavily on consumer sentiment in the lead up to and throughout spring,” concluded Charles Tarbey.

CENTURY 21 encourages prospective buyers that are looking to purchase real estate to ensure they have obtained the appropriate professional property and finance advice before doing so.  

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 clear and expert advice.


0 comments | Posted by Charles Tarbey on 12/08/2013 at 12:00 AM | Categories:

Homebuyer confidence reaches highest level since 2007

New figures from Lenders Mortgage Insurance provider, Genworth, suggest that homebuyer confidence has rebounded significantly in Australia over the past quarter on the back of improved consumer expectations regarding mortgage stress.

The Genworth Homebuyer Confidence Index, which measures homeowner sentiment from a sample group of 2124 mortgage holders, jumped from a record-low of 93.4 in March 2013 to 100.1 at the end of July 2013. 

The 7.2 per cent increase saw the Index reach its highest level since it was first calculated in 2007. 

Genworth Chief Commercial Officer, Bridget Sakr, said “the spike in consumer confidence recorded since March was driven by a 37 per cent decrease in the proportion of surveyed borrowers who expected to experience mortgage stress over the next 12 months. 

“It appears that consumers are becoming more confident about making repayments, with the Index showing that 29 per cent of homeowners expected interest rates to decrease over the next 12 months – compared to 12 per cent who held this expectation in March.”

Participants were surveyed on the proportion of monthly income used to service debts, the maximum loan-to-valuation ratio borrowers are comfortable borrowing, their repayment history over the last 12 months, their repayment expectations for the next twelve months, and whether they believe that now is a good time to buy a home. 

The Index showed that 17 per cent of borrowers who expected to experience mortgage stress in the coming 12 months cited concerns about the cost of living as the main driver.

In March 2013, homeowners’ concerns about servicing their mortgage over the coming year were heightened for recent first homebuyers, with the recent first homebuyer component of the Index plummeting to a record low of 85.9. However, the July Index showed a rebound in confidence to a record level of 99.9.

The Index suggested that for those looking to enter the property market, housing affordability and saving for a deposit remain the biggest barriers to homeownership.

“Research showed that 80 per cent of non-property owners considered it unrealistic to save a 20 per cent deposit. Also, 34 per cent of prospective first homebuyers believed that affordability may be an impediment to achieving their goal,” continued Ms Sakr.

“The latest Genworth Homebuyer Confidence Index suggests that homeowners realise that current market conditions – particularly historically low interest rates – make buying property and servicing a mortgage a more attractive proposition than it’s been for a number of years. 

“However, affordability remains a challenge for those yet to enter the market, with 70 per cent of non-property owners believing the dream of homeownership to be unrealistic,” Ms Sakr concluded.

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 clear and expert advice.


0 comments | Posted by Charles Tarbey on 07/08/2013 at 12:00 AM | Categories:

Capital city home values rise 1.6 per cent in July

New figures from RP Data and Rismark International show that capital city dwelling values rose 1.6 per cent in July, taking the cumulative recovery in residential home values to 6.5 per cent since the market bottomed out in May 2012.

The July results took the change in capital city home values to +2.3 per cent over the three months ending July 2013, and +4.9 per cent over the past twelve months.

According to RP Data research director, Tim Lawless, despite the strong headline result, the market remains somewhat of a mixed bag.

"The housing market is being buoyed by very positive conditions in Sydney, Perth and to a lesser extent Melbourne, with residential values in these cities now 3.7 per cent, 4.4 per cent and 2.4 per cent respectively higher over the past three months alone. At the other end of the scale you have cities like Adelaide, Brisbane and more recently Darwin where conditions are more sedate with dwelling values slipping lower over the past quarter,” Mr Lawless said.

"By including rental yields in our assessment of the housing market, some clarity is provided as to why investors are becoming so active.

"The RP Data-Rismark Accumulation Index, which factors in both capital gains and gross rental yields, is up 9.4 per cent over the past year. As noted by RBA Governor Glenn Stevens earlier this week, with an easing in monetary policy one of the expected and intended effects will be that people start to shift their portfolios away from the less risky assets such as cash and in the direction of holding equities and physical assets such as property.”

The Accumulation Index showed that the most significant total gross returns were recorded in Perth (+13.3 per cent) and Sydney (+11.2 per cent) over the 12 months ending July 2013. 

Rismark CEO, Ben Skilbeck, said that lending commitments data had also highlighted an increase in investor activity.

"While overall outstanding credit to housing only grew 4.4 per cent over the year to May 2013, the dollar value of lending commitments to investors in the month were 24 per cent higher than in May 2012. For owner-occupiers, the May 2013 lending commitments year-on-year increase was 11 per cent," he explained.

RP Data noted that vendor metrics had also continued to strengthen over July, with a typical capital city dwelling selling in 45 days, compared with 59 days a year prior. 

"With the housing market once again showing solid capital gains and rents also rising, the issue of housing affordability is likely to begin attracting more attention,” said Mr Lawless. 

"The recent housing market correction which bottomed in May 2012, where values were down 7.4 per cent from peak to trough across the combined capital cities, together with mortgage rates moving to historically low levels, delivered substantial affordability improvements for Australian housing. 

“However, with Sydney, Perth and Canberra values now back at record high levels and some other capital cities not far off their previous peaks, there are likely to be a growing number of households who find it challenging to enter the housing market." 

Mr Skilbeck added, "While the highly anticipated interest rate cuts in August will further act to improve housing affordability, if these cuts do eventuate they will likely spur further house price appreciation making the deposit requirements for first home buyers more challenging."

The RP Data-Rismark results also showed that the more expensive upper quartile of the market had continued to underperform the other broader priced segments of the housing market.

According to Mr Skilbeck, the mid-market achieved 1.4 times the growth of the upper quartile over the 12 months ending July 2013.

"While the mid-market has largely recovered its peak to trough declines, the upper market still needs to add about four per cent before it can claim the same," concluded Mr Skilbeck.

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 clear and expert advice. 


1 comments | Posted by Charles Tarbey on 06/08/2013 at 12:00 AM | Categories: