Viewing by month: September 2013

Property management: EBM says outsourcing is the way to go

 

For investors, one of the key decisions to make when renting out real estate is whether to self-manage their property or outsource the task to a professional. While hiring a property manager may cost an investor a little more money up-front, there is a good chance they will recoup the value – and more – over the long-term.

 

EBM Insurance recently outlined some key reasons for professional property management services and landlord Insurance in the September edition of CENTURY 21’s Property Investor. We’ve included the article below, and hope you find it an interesting and informative read.

 

Trashed properties highlight need for professional management

 

Recent incidents of tenants trashing rental homes highlight the challenges for landlords who choose to manage their own property investments.

 

A home in Laverton, Victoria, was found strewn with rubbish and furniture in the wake of an eviction. A sofa was thrown on the roof and a mattress wedged up a tree.

 

The landlord - who was too scared to be identified - told Channel Ten that he was shocked at the state of the house, which stank so much that he couldn't spend more than five minutes inside.

 

"It's devastating. I'm very scared. I don't want to go there alone," said the owner, who managed the property himself.

 

One of the evicted tenants, 'Nick', acknowledged that the sofa belonged to the tenants but denied putting it on the roof. In an interview with Radio 3AW, he admitted to not paying rent for a couple of months, but claimed the property had no smoke detectors and that the oven never worked.

 

EBM RentCover general manager, Sharon Fox-Slater, said it was not uncommon for rental homes to be trashed if a tenancy turned sour.

 

"People are complex and personal circumstances change. Tenants might fall in with the wrong crowd or react badly to pressure or trauma in their lives - taking their 'frustrations' out on the property," she said.

 

"Eviction is particularly fraught with emotion and unfortunately, some tenants choose to literally hit back at the landlord by damaging their property.

 

"When a house is damaged there's a direct cost in repairs and an indirect cost as there is no rent coming in while the place is being fixed. Landlord insurance covers both of these costs."

 

Ms Fox-Slater said professionally managed properties were less likely to be trashed - although there were no guarantees.

 

"A good property manager can check prospective tenants against databases of known trouble-makers, check references, perform regular inspections and make sure a bond is taken," she said.

 

"If things do turn sour, they usually have experience handling the eviction process."

 

The owner of another trashed investment property in Willowbank, Gordon Lee, told The Queensland Times he hadn't taken a bond and had a friend managing his property.

 

He returned to find decaying food in the fridge, bi-fold doors ripped out, trees and plants uprooted and walls punched in.

 

"It's stuffed me up financially," he said. "I've had to put the house up for auction and sell it at a loss."


1 comments | Posted by Charles Tarbey on 30/09/2013 at 12:00 AM | Categories:

Consumer sentiment on the rise

 

The Westpac Melbourne Institute Index of Consumer Sentiment increased by 4.7 per cent in September from 105.7 in August 2013 – the highest monthly gain the Index has recorded since December 2010.

 

An Index level of 100 indicates that the balance of confidence or optimism is weighted equally, while an Index of greater than 100 indicates that optimists outnumber pessimists.

 

Westpac's chief economist, Bill Evans, said “the components of the Index indicate that the improvement in confidence is dominated by rising optimism about prospects for the economy rather than how households feel about their own finances.”

 

“Looking across the five sub-indexes: those tracking views on ‘family finances vs a year ago’ and ‘family finances over the next 12 months’ fell by 1.9 per cent and increased by 1.6 per cent respectively whereas those tracking views on ‘economic conditions over the next 12 months’ and ‘economic conditions over the next five years’ increased by 8.7 per cent and 7.1 per cent respectively,” he explained.

 

The Index suggested that consumers are also feeling more confident about purchasing a home, with the sub-index tracking assessments of "whether now is [a] good time to buy a dwelling" jumping 6.5 per cent to reach its highest level since August 2009.

 

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 24/09/2013 at 12:00 AM | Categories:

Lending figures a positive sign for housing market

 

CENTURY 21 believes that the increase seen in mortgage lending over July 2013 could foreshadow further improvements within Australia’s residential property market.

 

“Housing finance data released by the Australian Bureau of Statistics (ABS) shows that the number of owner occupied housing commitments increased by a seasonally adjusted 2.4 per cent in July as compared with June 2013,” said Chairman and Owner of CENTURY 21 Australasia, Charles Tarbey.

 

“This upward movement is positive news for the residential property market and we believe that further improvements could be seen over the coming months as the impact of the August interest rate cut becomes more evident.”

 

The ABS’ figures showed that the number of loans for the purchase of new homes increased by a seasonally adjusted 5.9 per cent in July 2013, to be up 52.1 per cent on July 2012.

 

Recent statistics from RP Data also highlighted robust auction activity in several key markets around Australia, with Sydney and Melbourne recording auction clearance rates of 84.3 per cent and 73.6 per cent, respectively, over the weekend.

 

“While no one can predict with any degree of certainty how Australia’s residential property market will play out over the coming months, the latest housing finance, dwelling value growth and auction clearance rate statistics are certainly encouraging signs as we move further 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 23/09/2013 at 12:00 AM | Categories:

Australian cities some of the most liveable in the world

 

Looking to reside or invest in Australia? It might not be a bad idea to do so, with a recent report ranking four Australian cities as some of the most liveable in the world.

 

The Economist Intelligence Unit’s annual Liveability Report ranked Melbourne as the world’s most liveability city in 2013, with an overall score of 97.5 out of 100, while Adelaide, Sydney and Perth also made the list at numbers five, seven and nine, respectively. Notably, Melbourne was named the world’s most liveable city for the third year running.

 

The survey tracked 140 countries, and the results were generated by examining and rating six major criteria: stability, healthcare, culture and environment, education and infrastructure. Indicators were scored as acceptable, tolerable, uncomfortable, undesirable or intolerable, and were then weighted to produce a rating, whereby 100 represented ideal liveability and one represented intoreable liveability.

 

Melbourne, Adelaide, Sydney and Perth all received perfect scores of 100 in the education and healthcare categories, and scores of 95.9 or above in the overall liveability category.

 

According to the report, the top-scoring cities tended to “be mid-sized cities in wealthier countries with a relatively low population density,” which fostered “a range of recreational activities without leading to high crime levels or overburdened infrastructure.”

 

Commenting specifically on Australia, the report cited infrastructural improvements as being a key factor behind the nation’s liveability standards.

 

Other cities appearing high on the list included Vienna, Vancouver, Toronto, Calgary, Helsinki and Auckland.

 

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 17/09/2013 at 12:00 AM | Categories:

New home lending rises in July

Housing finance data released by the Australian Bureau of Statistics (ABS) shows that new home lending rose for a third consecutive month in July 2013, with the number of loans for the purchase of new homes increasing by 5.9 per cent.

 

The ABS reported that there were 8,396 loans to owner occupiers for the purchase and construction of new homes during July 2013 – the strongest monthly result since early 2010.

 

Housing Industry Association economist, Geordan Murray, said July had recorded a good result, “but the lack of strong upward momentum for the construction component over 2013 to date [was] disappointing.”

 

“The aggregate value of lending for housing increased by 4.5 per cent in the July 2013 quarter. There has been strengthening demand from both owner-occupiers and investors, which in itself is encouraging, but growth has been driven primarily by lending to those purchasing existing homes,” he explained.

 

“The value of lending to owner occupiers for construction and the purchase of new homes increased by 2.5 per cent, while lending to investors purchasing new homes increased by 3.3 per cent in the July quarter of 2013. Despite this, the total increase in lending for new homes only contributed 0.5 percentage points to the quarterly growth.”

 

In July 2013, the seasonally adjusted number of housing finance commitments (for both new and established owner-occupied housing) increased in New South Wales (+2.3 per cent), Victoria (+3.3 per cent), South Australia (+0.1 per cent), Western Australia (+1.8 per cent), Tasmania (+1.9 per cent), the Northern Territory (+3.6 per cent) and the Australian Capital Territory (+3.5 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 16/09/2013 at 12:00 AM | Categories:

Capital city home values edge higher over August

 

Dwelling values across Australia’s combined capital cities recorded a 0.5 per cent increase in August 2013 according to RP Data-Rismark’s Home Value Index, taking the cumulative gain in home values to 7.0 per cent since the market bottomed out in May last year.

 

The August result was a slowdown from previous months in which capital gains had been recorded at much higher rates. Nevertheless, the August result took the rolling three-month change in capital city dwelling values to 4.0 per cent – the highest rate of capital gain since the three months ending April 2010.

 

According to RP Data research director, Tim Lawless, the slower month-on-month result was a welcome sign after the strong growth conditions of previous months had fuelled renewed debates around the sustainability of Australian dwelling values.

 

“The half a per cent gain over the month of August is a much more sustainable rate of growth and will be a welcome turn of events for policy makers,” Mr Lawless said.

 

“While the recent surge in dwelling values has caused some renewed debate about an Australian housing bubble, it is important to remember that the average annual capital gain over the past decade has been just 4.3 per cent across the combined capital cities.

 

“In Sydney the annual rate of growth has seen a much lower decline of 2.4 per cent which is well below current inflation.”

 

RP Data noted that softer housing market conditions over August could be attributed to a lower rate of growth across the Sydney and Melbourne housing markets, where dwelling values rose by 0.6 per cent and 0.2 per cent respectively. Several cities recorded a fall in values over the month, with Hobart posting a 1.2 per cent decline, and Perth values slipping by 0.2 per cent.

 

Mr Lawless said the most significant turnaround in market conditions had occurred in Brisbane, where the monthly rate of growth jumped to 1.5 per cent.

 

“Brisbane’s housing market has been underperforming since the onset of the GFC with home values still almost 10 per cent lower than their previous peak which was back in November 2009,” he explained.

 

“The strong result for August was evident across both the detached housing and the unit markets and may potentially mark a positive turning point for Brisbane’s housing market.”

 

Looking at the performance across the broad-pricing segments of the market, the RP Data-Rismark Stratified Hedonic Index continued to show the broad-middle segment as the best performing, although the rate of capital gain had gathered some momentum at the more prestigious end of the market.

 

The broad mid-priced market recorded a capital gain of 5.2 per cent since the start of the year, while the most expensive quartile had seen values increase by a less substantial 4.9 per cent. The most affordable quartile recorded the lowest rate of growth at 4.4 per cent.

 

Mr Lawless went on to predict strong housing market conditions for this year’s spring season.

 

“Housing market conditions are looking set to provide what could be described as a near-to perfect spring season with the number of homes currently available for sale around 15 per cent lower than a year ago,” he said.

 

“In Sydney, listing numbers are about 28 per cent lower than a year ago. The lower effective supply levels are a result of fewer new listings being added to the market and a higher rate of absorption, with a 30 per cent increase in sales activity compared with a year ago.

 

“We are already seeing a substantial increase in real estate agent activity across the RP Data platforms which indicate a surge in pre-listings activity,” Mr Lawless 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.


2 comments | Posted by Charles Tarbey on 09/09/2013 at 12:00 AM | Categories:

Rate hold a positive move for housing market

 

CENTURY 21, the largest real estate sales organisation in the Asia Pacific region, believes that the decision by the Reserve Bank of Australia (RBA) to keep interest rates on hold in September should bode well for the residential real estate market as the spring selling season commences.

 

“At its September meeting, the Reserve Bank elected to keep the official cash rate on hold at a historic low of 2.50 per cent,” said Chairman and Owner of CENTURY 21 Australasia, Charles Tarbey.

 

“This move should help to maintain attractive borrowing conditions for prospective property buyers and existing mortgage holders, and may lead to increased buying activity in the coming months.”

 

The Reserve Bank reasoned that it was appropriate to leave the cash rate on hold, but said it would continue to assess the outlook and adjust policy as needed to foster sustainable growth in demand and inflation outcomes consistent with the target rate.

 

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 0.5 per cent in August 2013, to be up 5.3 per cent on August 2012.

 

“While it’s impossible to be sure of how this latest rate decision will affect market activity, there is a distinct possibility that more buyers will step off the sidelines over spring to take advantage of improving market conditions and increasingly attractive mortgage rates,” 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 06/09/2013 at 12:00 AM | Categories:

Housing costs remain steady according to ABS

A recently released report by the Australian Bureau of Statistics (ABS) shows that despite the national increase in property prices, the percentage of income spent by mortgage-holders and private renter households on housing costs has remained unchanged since 1995. 

The report measures housing costs, including rates payments and mortgage or rent payments, whichever is applicable, to show the cost of housing in Australia. 

The report shows that since 1994-95, the proportion of households that owned their home outright dropped from 42 to 31 per cent. Those with a mortgage increased from 30 to 37 per cent, and the number of households renting privately increased from 18 to 25 per cent.

Housing costs for private renters increased by eight per cent in 2011-12. This increase saw housing costs for private renter households increase from $322 in 2009-10 to $347 in 2011-12 – however, the proportion of income spent on housing costs for private renters remained at 20 per cent.

The ABS’ Director of Living Conditions, Emily Cunningham, noted that “average housing costs in capital cities were 44 per cent higher than housing costs outside capital city areas."

Households in the Northern Territory, Australian Capital Territory, Western Australia and New South Wales reported average housing costs above the national average, while average housing costs in Victoria, South Australia and Tasmania were below the national average. Housing costs in Queensland were similar to the national average of $265 per week.

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 02/09/2013 at 12:00 AM | Categories: