Investor of the Year Awards 2016: Final call for entries

Entries for Your Investment Property’s 9th annual Investor of the Year Awards will close at midnight tonight. Don’t miss your chance to be named Australia’s best property investor of 2016 – enter online.

The awards will once again recognise the sharpest and most inspirational property investors so if you have had a successful 2016 and would like to share your story, complete the online entry form today.
The top five property investors of 2016 will each win an incredible prize pack as a reward for their success – click here to view the prizes up for grabs.

The results of the Investor of the Year Awards 2016 will be revealed in issue 115 of Your Investment Property magazine in December.
 

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

Increased housing affordability in Darwin is attracting new buyers

According to Domain Group’s House Price Report: September Quarter 2016, the median house price in Darwin has fallen for the 5th consecutive year. This has opened up the market to house hunters who were previously unable to break into the market.

“Increased affordability in the capital means that you should take the opportunity to inspect both houses and units on the market. All properties will have different strong points so, don’t just settle on the first one you see,” noted the report.

Faced with such favourable circumstances, many real estate experts believe the Darwin property market is set for a rebound. Glenn Grantham, general manager at Raine & Horne, said there’s been a surge in first-home buyers looking for established homes. Southern investors were also being tempted back to the Top End by the strong rental yields.

“We have seen a threefold increase in numbers at open homes and via our online inquiries over the last two weeks, which augurs well for the remainder of 2016 and the start of next year,” Grantham said.

“A property at Wagaman, for example, recently attracted 12 buyer groups, whereas six months ago, one or two groups would have been the norm. This level of activity indicates Darwin’s real estate is in rebound mode and we’ve also seen an increase in offers.”

Grantham noted that many savvy buyers from the southern states had read about the drop in median house price in Darwin, and were starting to return, “especially as our yields are above 4 per cent gross, which compares favourably against the likes of Sydney and Melbourne.”

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

How to avoid nasty surprises when refinancing

As switching to a cheaper loan could lead to huge potential savings, it’s not surprising that more and more property investors and homeowners are refinancing. But unless you do your homework, you could find yourself grappling with nasty surprises, including higher fees, tougher terms and new deposit requirements.

According to a representative from Mortgage Choice, a home buyer with a $1 million mortgage paying 5% could save $683 a month (or more than $204,000 over 25 years) by switching to a 3.78 per rate, with the switching cost recoverable in two months. Such huge savings help explain why remortgaging has increased three-fold during the past 25 years to represent 30% of current loan approvals.

John Flavell, chief executive officer of Mortgage Choice, encourages property buyers to shop around for the best rates and terms. “Property investors and owner occupiers paying more than 4.5 per cent interest on their mortgage could be paying too much,” he said.

However, Christopher Foster-Ramsay, principal at Foster Ramsay Finance, warned property investors to not always go for the cheapest rates. “Cheapest is not always the best. It is important that consumers read the fine print to pick up any hidden fees and charges that may cost benefits or savings. The devil is in the detail.”

Go through this checklist of fees

When you’re refinancing, always pay attention to the timing. Settlement occurs when the contract is signed for the new loan and the funds are drawn. This involves paying off the existing loan using funds from the new loan.

Stuart Wemyss, owner and director of ProSolution Private Clients, suggests going through the following checklist of fees to help you figure out whether the switch is worthwhile:  

  • Discharge fees from an existing lender – This is an administrative fee ranging from $100 to $200 for processing the discharge of the mortgage or loan.
  • Early repayment fee – While most have been phased out, some of the smaller lenders can impose a fee ranging from $100 to $1000.
  • Fixed rate break fee – These fees can total up to several thousand dollars.
  • Mortgage registration – This state government fee is levied when the incumbent lender deregisters a mortgage and the new lender registers the new one. The cost will depend on your state, but ranges from $220 to $350.
  • Application fees – Can cost nothing but could be as exorbitant as $1000.
  • Valuation fees – They’re not normally charged for standard properties but can cost from $100 to $300.
  • Settlement fee – This administrative fee is charged by the new lender and costs between $100 to $300.
  • Lenders mortgage insurance – LMI applies if more than 80% of a property’s value is borrowed. If can range from 2% to 4% of the loan amount, which often makes it too expensive to refinance.

Related Stories:

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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

New study indicates most Asia Pacific Millennials still live at home or rent

According to a new study from CBRE Group, Inc., Asia Pacific Millennials share similar long-term lifestyle priorities with other generations, despite superficial perceptions of this emerging superclass. The accompanying survey polled 5,000 respondents, aged between 22 and 29, in Australia, Hong Kong, China, India, and Japan. 

CBRE’s inaugural report on this demographic, entitled Asia Pacific Millennials: Shaping the Future of Real Estate, works to redefine widespread preconceptions about Millennials in the Asia Pacific region.

Preconceptions about Millennials—including their preference for informal employment, their desire to avoid financial responsibility, and their habit of changing jobs frequently—are debunked. To the contrary, most Millennials save money to buy a home, spend prudently, and desire stable careers.  

“Their growing influence is already driving new trends in real estate markets across the region, making it essential for occupiers, retailers and developers to gain a thorough understanding of their behaviours, requirements and priorities,” the report noted.

Two-thirds of Millennials still live at home
 
Almost two-thirds of Millennials still live at home due to cultural practices and financial factors. In most of the major markets surveyed, the high cost of residential property makes it difficult for the average Millennial to save enough to buy a home.

The rate of homeownership among Millennials in the region is a paltry 11%, compared to the slightly higher global average of 15%. Rates of homeownership in Hong Kong, India, and Japan are even lower at 5%.

The survey did note that the majority of Millennials did aspire to own their own homes, with 65% planning to buy their own properties in the near future. If they’re not living at home, more than half (63%) are forced to rent as buying is still beyond their means. Most Millennials refuse to transition to homeownership until they find a property that meets their living standards in terms of size, quality, and location.

“Developers and city administrators should take heed of these trends by constructing more affordable housing for rent and sale,” said Dr. Henry Chin, head of research at CBRE Asia Pacific. “In response to the challenges for millennials to accumulate capital for down payments, there needs to be innovation in structuring mortgages for young first-time homebuyers.”

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Can you afford to buy in this suburb? Find out how much you can borrow

Before remortgaging, check fees to make it worthwhile

As switching to a cheaper loan could lead to huge potential savings, it’s not surprising that more and more homeowners are refinancing. But unless you do your homework, you could find yourself grappling with nasty surprises, including higher fees, tougher terms, and new deposit requirements.

According to a representative from Mortgage Choice, a home buyer with a $1 million mortgage paying 5% could save $683 a month (or more than $204,000 over 25 years) by switching to a 3.78 per rate, with the switching cost recoverable in two months. Such huge savings help explain why remortgaging has increased three-fold during the past 25 years to represent 30% of current loan approvals.

John Flavell, chief executive officer of Mortgage Choice, encourages property buyers to shop around for the best rates and terms. “Property investors and owner occupiers paying more than 4.5 per cent interest on their mortgage could be paying too much,” he said.

However, Christopher Foster-Ramsay, principal at Foster Ramsay Finance, warned property investors to not always go for the cheapest rates. “Cheapest is not always the best. It is important that consumers read the fine print to pick up any hidden fees and charges that may cost benefits or savings. The devil is in the detail.”

Go through this checklist of fees

When you’re refinancing, always pay attention to the timing. Settlement occurs when the contract is signed for the new loan and the funds are drawn. This involves paying off the existing loan using funds from the new loan.

Stuart Wemyss, owner and director of ProSolution Private Clients, suggests going through the following checklist of fees to help you figure out whether the switch is worthwhile:  

  • Discharge fees from an existing lender – This is an administrative fee ranging from $100 to $200 for processing the discharge of the mortgage or loan.
  • Early repayment fee – While most have been phased out, some of the smaller lenders can impose a fee ranging from $100 to $1000.
  • Fixed rate break fee – These fees can total up to several thousand dollars.
  • Mortgage registration – This state government fee is levied when the incumbent lender deregisters a mortgage and the new lender registers the new one. The cost will depend on your state, but ranges from $220 to $350.
  • Application fees – Can cost nothing but could be as exorbitant as $1000.
  • Valuation fees – They’re not normally charged for standard properties but can cost from $100 to $300.
  • Settlement fee – This administrative fee is charged by the new lender and costs between $100 to $300.
  • Lenders mortgage insurance – LMI applies if more than 80% of a property’s value is borrowed. If can range from 2% to 4% of the loan amount, which often makes it too expensive to refinance.

Related Stories:

Loans: Which One Is Right For You?
RBA Holds Rates – But Loans Are Still Hard To Get

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

Factors to consider when investing in Perth’s booming rental market

According to data from the Real Estate Institute of Western Australia (REIWA), all five sub-regions in Perth saw a rise in leased properties in August, with the biggest increases apparent in the central and north-west regions (up 19% and 17.4% respectively).

If you’re eager to take advantage of the growing rental market in Perth, it’s important to select a rental that would appeal to your target market. Features you may value in your own home won’t necessarily appeal to prospective tenants.

Consider these four factors when examining different investment properties:

Location

As with any property purchase, location is of utmost importance. A common tenant requirement is proximity to key amenities like shops, schools, hospitals, and parks. It’s also wise to purchase investment properties in areas that encourage a well-balanced lifestyle.

Younger tenants want to live in clean, peaceful residences without sacrificing proximity to business districts, while families with young children would rather live in outlying suburbs that have parks and kid-friendly amenities.

Internal layout

Pay attention to the layout of your investment property. Many tenants will be sharing the property with roommates, partners, and family members, so you’ll need to ensure that the home caters to the needs of multiple occupants.

Questions to ask yourself include:

  • Is there a good separation between common areas and bedrooms?
  • How many bedrooms does the property have? Are they spacious?
  • How many bathrooms are there?
  • Is there plenty of storage space?

Outdoor areas

Due to Western Australia’s warm climate, many tenants would rather live in a rental property that has features that allow them to enjoy the pleasant weather. Hence, you should consider investing in homes that have balconies, courtyards, or sunrooms.

While many tenants value homes with outdoor living spaces, it’s worthwhile to consider homes that are also low maintenance. Gardens may look beautiful, but they require a great deal of upkeep. Hence, it’s best to invest in properties that have low maintenance outdoor areas.

Parking  

While most homes in Western Australia come equipped with garages and carports, units (particularly those in the inner-city) may not have these features. As a lack of designated parking space is an inconvenience for tenants, it’s best to look for investment properties that would provide your tenants with secure parking spaces for their cars.

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

Adding residential property to your portfolio can enhance performance

A new report by Atchison Consultants highlights how the inclusion of residential property can enhance performance in moderate, balanced and growth investment portfolios. The report recommends property as an inclusive strategy and notes that residential property, with its relatively low volatility, provides a stable anchor to these portfolio types.

The figures, which were taken over a rolling 20-year period with different asset allocations, reveal decidedly positive results. A growth portfolio with 20% to real property could be improved up to 9.6%, a balanced portfolio with 15% could have a 6.7% improvement, and a moderate portfolio with only 10% exposure could have a 3.7% uplift.

The data was drawn from the average allocation of super fund managers from the Australian Superannuation Survey produced by a number of data providers.

As for controlling asset allocation, Arthur Naoumidis, DomaCom Limited’s CEO, called the DomaCom platform “the ideal vehicle to control asset allocation in real property without the client’s need to borrow if that is deemed an inappropriate strategy. Ownership can be fractionalised across multiple properties for as little as $2,000 per property so even a $10,000 allocation can achieve diversification in 5 different types of property in 5 different geographic locations.”  

“Most financial advisers work with [professional property advisers] to identify suitable assets, but DomaCom also [identifies] properties that can be crowdfunded. Currently we have a campaign for The Block, a group of high end apartments [which was] featured on the Channel 9 program of the same name. The Block apartments are substantial at 240 – 270 2m and will be sold fully furnished”.

“The reason we chose The Block is that historically these high profile properties rent at a premium rate of approximately 4.2% – 4.9%, which will be mainly tax-deferred as they have substantial tax depreciation schedules, making them ideal for investors. This season, the rental estimates are between $2,000 and $2,500 per week with depreciation schedules ranging from $83,000 to $93,000.”

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‘Two speed property market’ continues in September

According to Domain Group’s House Price Report: September Quarter 2016, Australia has a “two speed property market,” with some capitals hitting record high prices while others declined. While the national median house price increased by 1.7% over the quarter, varying levels of local supply and demand are delivering mixed results for individual capitals.

According to Dr. Andrew Wilson, chief economist at Domain Group, “low interest rates, increased investor activity, strong migration and robust local economies have [fueled] rising buyer momentum in both the Sydney and Melbourne markets.” He predicts the relative shortage of listings and increased interest from investors will continue to drive price growth in the Sydney and Melbourne markets for the remainder of 2016.      

In contrast, economic woes and a depressed housing market continue to plague Western Australia and the Northern Territory, with house prices continuing to decline in Perth and Darwin. “Local economic performance will determine whether there is a return to price growth in these capitals over the remainder of the year,” said Dr. Wilson.

Sydney

Though house price growth was on the decline in the previous September quarter, the “boom is back” for Sydney, with house prices reaching a new record level of $1,068,303—a 2.7% increase. This is the strongest quarterly growth rate since September 2015.

Despite the strong quarterly growth, house prices in Sydney have only increased 2.1% over the past year. This is the lowest annual growth rate for the capital since September 2012.

Meanwhile, Sydney unit prices reached $685,865 in the September quarter, a solid 1.1% increase and an annual growth of 0.9%.

Melbourne

Melbourne is also on a roll, with house prices hitting a new record of $773,669—a quarterly price growth rate of 3.1% and an annual increase of 9.1%. This is Melbourne’s 16th consecutive quarter of growth.

Unit prices also increased significantly to $466,779, a growth rate of 4.5% over the September quarter and 5.5% over the past year.

Perth

Continuing the downward trend from the previous September quarter, Perth house prices fell once again this quarter, decreasing by 2.0% to $566,609. “Falling 3.8 per cent over the past year, the median house price in Perth is now at the lowest point recorded since March 2013.”

The steep price falls for Perth unit prices eased slightly this quarter, decreasing by 0.8% to $364,752, its strongest quarter this year. Annually, Perth unit prices have fallen by 6.2%.

Darwin

Darwin’s median house price fell for the 5th consecutive year, dropping 3.3% to $595,466—an annual decrease of 10%. Median house price has fallen below $600,000 for the first time since the June quarter of 2012.

Though house prices continue to decline, the capital’s median unit price has remained stable this quarter at $448,418, an annual increase of 3.9%.

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

National Asbestos Awareness Month to educate the public about asbestos

Before the dangers of asbestos became widely known, Australia was one of the world’s largest consumers of asbestos-containing materials. Rather alarmingly, products containing asbestos can still be found in one in three brick, weatherboard, fibro, or clad home built or renovated before 1987.

The Asbestos Education Committee—in partnership with the Asbestos Diseases Research Institute and the Heads of Asbestos Coordination Authorities—urges Australians not to play “renovation roulette”. November has been deemed National Asbestos Awareness Month, and the campaign aims to educate homeowners, renovators, handymen, and tradespeople about the dangers of asbestos and how to manage it safely.

According to the campaign’s official press release, asbestos can be found anywhere: “Under floor coverings including carpets, linoleum and vinyl tiles, behind wall and floor tiles, in cement floors, internal and external walls, ceilings and ceiling space (insulation), eaves, garages, roofs, around hot water pipes, fences, extensions to homes, garages, outdoor toilets, backyard and farm structures, chook sheds and even dog kennels.”

Unless the public knows where these asbestos-containing products might be located, or how to manage and dispose of them safely, they expose themselves to great danger if they disturb asbestos-containing materials.

If tampered with, asbestos-containing materials could release lethal fibres, which can be inhaled and cause asbestos-related diseases, including malignant mesothelioma.   

“There is no cure for mesothelioma, a cancer that can develop between 20-50 years after inhaling asbestos fibres…the average survival time is just 10-12 months following diagnosis. Inhaling asbestos fibres can also cause lung cancer, asbestosis and benign pleural disease. Because there is no known safe level of exposure to asbestos fibres, it’s extremely important for all Australians to safely manage asbestos-containing materials that might be found in and around their homes.”

The public is encouraged to visit the campaign’s official website (asbestosawareness.com.au) to learn more about the proper detection, as well as the safe management and disposal of, asbestos. 

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‘Two speed property market’ continiues in September

According to Domain Group’s House Price Report: September Quarter 2016, Australia has a “two speed property market,” with some capitals hitting record high prices while others declined. While the national median house price increased by 1.7% over the quarter, varying levels of local supply and demand are delivering mixed results for individual capitals.

According to Dr. Andrew Wilson, chief economist at Domain Group, “low interest rates, increased investor activity, strong migration and robust local economies have [fueled] rising buyer momentum in both the Sydney and Melbourne markets.” He predicts the relative shortage of listings and increased interest from investors will continue to drive price growth in the Sydney and Melbourne markets for the remainder of 2016.      

In contrast, economic woes and a depressed housing market continue to plague Western Australia and the Northern Territory, with house prices continuing to decline in Perth and Darwin. “Local economic performance will determine whether there is a return to price growth in these capitals over the remainder of the year,” said Dr. Wilson.

Sydney

Though house price growth was on the decline in the previous September quarter, the “boom is back” for Sydney, with house prices reaching a new record level of $1,068,303—a 2.7% increase. This is the strongest quarterly growth rate since September 2015.

Despite the strong quarterly growth, house prices in Sydney have only increased 2.1% over the past year. This is the lowest annual growth rate for the capital since September 2012.

Meanwhile, Sydney unit prices reached $685,865 in the September quarter, a solid 1.1% increase and an annual growth of 0.9%.

Melbourne

Melbourne is also on a roll, with house prices hitting a new record of $773,669—a quarterly price growth rate of 3.1% and an annual increase of 9.1%. This is Melbourne’s 16th consecutive quarter of growth.

Unit prices also increased significantly to $466,779, a growth rate of 4.5% over the September quarter and 5.5% over the past year.

Perth

Continuing the downward trend from the previous September quarter, Perth house prices fell once again this quarter, decreasing by 2.0% to $566,609. “Falling 3.8 per cent over the past year, the median house price in Perth is now at the lowest point recorded since March 2013.”

The steep price falls for Perth unit prices eased slightly this quarter, decreasing by 0.8% to $364,752, its strongest quarter this year. Annually, Perth unit prices have fallen by 6.2%.

Darwin

Darwin’s median house price fell for the 5th consecutive year, dropping 3.3% to $595,466—an annual decrease of 10%. Median house price has fallen below $600,000 for the first time since the June quarter of 2012.

Though house prices continue to decline, the capital’s median unit price has remained stable this quarter at $448,418, an annual increase of 3.9%.

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