Loss-making resales increase over the June quarter

The number of houses and units resold at a loss in both capital cities and regional areas increased over the June quarter, according to the latest CoreLogic Pain & Gain report.

As much as 12.2% of houses and 19.9% of units in regional markets were sold below their previous purchase prices, continuing the loss-making resale trends that started in the August 2015 quarter for houses and the February 2016 quarter for units.

Meanwhile, capital city houses resold at a loss increased from 5.7% in the March quarter to 5.9% in the three months to June. 9.5% of units were also resold at a loss. The proportion of loss-making resales over the quarter increased across each capital city with the exception of Melbourne and Canberra.

In spite of these figures, CoreLogic head of research Cameron Kusher said that these numbers are still considered to be low historically.

“While loss-making resales increased over the quarter, historically, most cities are still seeing quite a low instance of homes reselling at a loss,” said Kusher.

“However, Perth and Darwin are the exceptions, with the proportion of loss-making resales at, or close to, historic highs.”

As much as 20.1% of Perth homes were resold at a loss, while Darwin registered 24.2% – the highest proportion since December 2002.

Units sold at a loss were also higher in number compared to houses across capital and regional markets. Only Sydney had a lower proportion of units reselling at a loss compared to houses.

“Houses have typically recorded a superior rate of capital growth to that of units and those houses reselling at a profit tend to record a much greater profit than units. These factors go some way to explaining why units are recording a much higher proportion of loss-making resales than houses,” said Kusher.
 

With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this – Compare Home Loans now

Demand soars in Brisbane’s luxury market

The uncertainty created by the recent federal election in the Brisbane property market appears to be finally lifting as sales from the capital’s luxury market has skyrocketed in the past seven weeks.

Chester, a luxury apartment developed by Kokoda Property in Brisbane’s Newstead suburb, has recorded a total of 135 sales amounting to $94.9 million in just two months following a slower-than-expected initial launch in June. The demand is not showing any signs of slowing, with 45 sales recorded in the past week alone.

“In stark contrast to earlier this year, throughout August we have experienced substantial interest in Chester’s luxury apartment offerings,” said Sam Tucker, Kokoda Property’s sales and marketing director.

“While market research suggests a stalling interest in small investment stock, what we are seeing is a growing demand for architecturally-designed off-the-plan residences that offer tenants a superior lifestyle.”

Tucker added that the Brisbane property market is now maturing as investors and owner-occupiers look for high-quality developments in suburbs located outside the CBD.

“Brisbane is rapidly transforming into a new world city; its culture, business centre, technology, and lifestyle is evolving with over $40 billion of infrastructure investment planned, so naturally there is a shift occurring with demand now skewed towards sophistication and luxury residential design,” said Tucker.

Similarly, Urbis associate director Paul Riga claimed that quality is now foremost in the minds of discerning investors.

“Preliminary data indicates a strong underlying demand for higher quality product. The marketplace is entering a phase of increased competition as investors and owner-occupiers become more savvy in their purchasing decisions,” said Riga.
 

Whether you are looking to buy your first home, move home, refinance, or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork – plus there is no charge for this service. Get help from a local mortgage broker

Median-priced housing out of reach for most

A new analysis by comparison website RateCity.com.au showed that six out of eight Australian capital cities have a median price that is unaffordable on an average single income.

Only Hobart and Adelaide were deemed affordable to singles having an average salary of $59,441 and $72,529 respectively. Meanwhile, those who want to buy a house in Brisbane and Melbourne would need to have an average salary of $80,866 and $96,706 respectively to be able to afford repayments on a 30-year mortgage.

“Our analysis reveals a reality that many young Australians are now living: the impossibility of affording a median-priced house on an average salary in most capital cities,” said Peter Arnold, data insights director at RateCity.com.au.

“Those wanting to live in the nation’s capital will require a salary of $97,756 while Sydney’s property boom puts it at the top of the list with a six-figure salary of $137,556 needed to comfortably fund a mortgage on a median-priced house.”

Arnold added that millennials would need the help of a partner or a family member to afford mortgage costs. But even couples are having a hard time landing a property on the east coast.

“Many first home buyers, including young families, may find that they have to move away from careers in the CBD and the support of families to more affordable parts of Australia,” said Arnold.
 

With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this – Compare Home Loans now

5 reasons why not to buy property in spring

As the spring season kicks in, more properties are being listed and sold as part of the annual buyer surge during this time of the year. But while the spring rush has become a common occurrence in the property market, investor Brenton Tidow believes that while now is the best time to sell a property, it is not the best time to buy one.

“Spring is an ideal time to sell, not buy. It’s a fine double-edged sword, as the surge in spring buyers brings about increased competition, which can hike prices and put pressure on budgets,” said Tidow.

Tidow further offers five reasons why spring may not be a good time to buy property:

  1. Price hikes

The increased competition during the spring rush can cause a rise in advertised sale prices. For Tidow, working with a real estate agent even before other buyers flock in can give you access to a large number of listings both on and off the market – and at better deals.

  1. Less negotiating power

During active periods like spring, negotiating power usually rests in the hands of the seller, not the buyer. In fact, properties sold at auction often get sold above the asking price.

  1. Demand outweighs supply

Prices skyrocket when demand is greater than supply, and that is what happens during the spring rush. However, Brenton encourages buyers not to give up, as a lot of re-zoning and infill activity are underway.

  1. Buyer burnout

Buyer burnout usually results from the buyer feeling overwhelmed by the market competition. According to Tidow, a flurry of buying activity usually precipitates this occurrence.

“In such times, I encourage buyers to be realistic and pull back,” said Tidow.

“If you cannot find a purchasable property, consider renting for several months and return to the market after spring.”

  1. Risk of impulse buying

Buyers could experience the fear of missing out amidst the strong property competition. This could affect their purchasing decisions negatively.

“While you may miss out on your first choice, it is unwise to be in a hurry to buy, or worse overlook the potential of the market in the months preceding spring, when you may find a better deal,” said Tidow.

“Buying a property is a major life investment and is best done with a strategic rather than emotional mindset.
 

Whether you are looking to buy your first home, move home, refinance, or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork – plus there is no charge for this service. Get help from a local mortgage broker

Green-fingered tips to boost your property’s value

If there is one thing that can lift a prestige property’s value by as much as 20%, it would be a well-kept and well-designed garden.

“If landscaping is well designed and well-built then, as a general rule, we say it will lift a home’s value by 10-20%,” Jim Fogarty from Melbourne’s Jim Fogarty Design told Domain News.

“In addition, you should expect to double your return on an investment in landscaping. If you spend $500,000 to $1 million, you can expect to receive $1-2 million back.”

There are even instances when the returns could go beyond the usual 20%.

“The bigger the land size, the more the price can climb,” said Matt Canwell, managing director of Sydney’s Secret Gardens.

“The property becomes at least one step above everything else and you can see great results.”

Well-landscaped outdoor spaces are now more prized than ever as entertaining in alfresco areas is becoming more and more popular. Furthermore, investing in landscaping ensures an appropriate green footprint – another thing that home owners value.

The condition of the garden is also integral in forming a first impression of a property. According to Nathan Bisshop of Outdoor Secrets, visitors generally estimate the cost of fixing a rundown landscape by a factor of five.

“And if you’re selling, that instantly brings down the value of the property as a whole. While we say good landscaping can raise a price by about 20%, bad can really drag it down,” Bisshop added.
 

Do you have more than $120k in your super fund? You could use your super to buy property – Find out how

NSW changes building certification process

In response to the Statutory Review of the Building Professionals Act, the New South Wales government has recently announced a restructuring of the process of certifying building projects.

“Minister for Fair Trading Victor Dominello has announced that the government will restructure the process of certification in NSW,” said Chris Johnson, CEO of property development group Urban Taskforce.

“A crucial change is to make certifiers more independent by stopping the process where a developer chooses their own certifier.”

Other changes include the greater use of data in the certifying process to improve transparency and conformance, the enhancement of certifier accreditation, and heightened fire safety certifications through specialist inspections and tighter controls.

While these changes may take some time to be fully implemented, Urban Taskforce has expressed support for the new rules, believing that it “will lead to a more professional independent process.”

“It is important that communities have confidence in the decision making and approval process for new buildings from approval of development applications right through to the final approval for a building through an Occupation Certificate,” said Johnson.

“The Urban Taskforce is keen to be involved in further discussion with the NSW Government on changes to the certification process. It is important that professional certifiers are supported by the government and that a balance between improving certification and not introducing too much red tape is maintained.”
 

With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this – Compare Home Loans now

Brisbane’s median house price reaches new high

As Queensland’s property market returns to positive territory after last quarter’s contraction, the median house price in Brisbane also increased by 1.3%, posting a new historical high of $635,000 in the June quarter, according to the latest data from the Real Estate Institute Queensland Market Monitor.

Unit prices fell by 0.2% to $440,000. However, its annual median sale price grew 0.3% compared with June 2015 at $441,300.

The Gold Coast emerged as one of the best performers of the state with a quarterly growth of 3.6%. The Townsville market also registered a growth of almost 3%, while the Toowoomba market fell by 2% – a continuation of the growth and contraction experienced by these two suburbs in the past quarter. Meanwhile, Bundaberg’s median unit price became more expensive than its median house price.

REIQ CEO Antonia Mercorella described the June quarter as a “challenging” one for the Queensland property market, with the lengthy federal election campaign and extensive uncertainty around the negative gearing debate taking its toll.

“Most of Queensland has struggled through this uncertainty and we have seen more markets contract than grow, which, of course, is disappointing,” said Mercorella.

However, Queensland’s affordability is once again drawing investors to the market.

“The Queensland housing market is doing what it does best – growing in a steady, sustainable way, consistently over the long term,” said Mercorella.

“It is a very good thing that we have not followed the peaks and troughs that occupy the graphs of other property markets.”
 

With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this – Compare Home Loans now

Brisbane’s median house price reaches a new record high

As Queensland’s property market returns to positive territory after last quarter’s contraction, the median house price in Brisbane also increased by 1.3%, posting a new historical high of $635,000 in the June quarter, according to the latest data from the Real Estate Institute Queensland Market Monitor.

Unit prices fell by 0.2% to $440,000. However, its annual median sale price grew 0.3% compared with June 2015 at $441,300.

The Gold Coast emerged as one of the best performers of the state with a quarterly growth of 3.6%. The Townsville market also registered a growth of almost 3%, while the Toowoomba market fell by 2% – a continuation of the growth and contraction experienced by these two suburbs in the past quarter. Meanwhile, Bundaberg’s median unit price became more expensive than its median house price.

REIQ CEO Antonia Mercorella described the June quarter as a “challenging” one for the Queensland property market, with the lengthy federal election campaign and extensive uncertainty around the negative gearing debate taking its toll.

“Most of Queensland has struggled through this uncertainty and we have seen more markets contract than grow, which, of course, is disappointing,” said Mercorella.

However, Queensland’s affordability is once again drawing investors to the market.

“The Queensland housing market is doing what it does best – growing in a steady, sustainable way, consistently over the long term,” said Mercorella.

“It is a very good thing that we have not followed the peaks and troughs that occupy the graphs of other property markets.”
 

With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this – Compare Home Loans now

NSW posts new rules on the building certification process

In response to the Statutory Review of the Building Professionals Act, the New South Wales government has recently announced a restructuring of the process of certifying building projects.

“Minister for Fair Trading Victor Dominello has announced that the government will restructure the process of certification in NSW,” said Chris Johnson, CEO of property development group Urban Taskforce.

“A crucial change is to make certifiers more independent by stopping the process where a developer chooses their own certifier.”

Other changes include the greater use of data in the certifying process to improve transparency and conformance, the enhancement of certifier accreditation, and heightened fire safety certifications through specialist inspections and tighter controls.

While these changes may take some time to be fully implemented, Urban Taskforce has expressed support for the new rules, believing that it “will lead to a more professional independent process.”

“It is important that communities have confidence in the decision making and approval process for new buildings from approval of development applications right through to the final approval for a building through an Occupation Certificate,” said Johnson.

“The Urban Taskforce is keen to be involved in further discussion with the NSW Government on changes to the certification process. It is important that professional certifiers are supported by the government and that a balance between improving certification and not introducing too much red tape is maintained.”
 

With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this – Compare Home Loans now

Property Investment Finance Fundamentals [SlideShare]

finance_2.jpg

Getting the most appropriate finance option to suit your property investing strategy and goals, is a crucial piece of the investing jigsaw.

Finance for homes and investment properties is a hugely competitive industry, with many lenders and types of loans available to you.

 


According to Australian Bureau of Statistics (ABS), Housing Finance Commitments Australia, July 2015, the amount of finance for investment purposes has reached $13.8 billion, which is over double the amount from July 2010. 

This SlideShare includes:

  • Finance hints, tips and strategies you can consider
  • The pros and cons of banks vs brokers
  • The risks of cross collateralisation