All real estate transactions will soon be completed electronically

iBuyNew, an online property marketplace, has joined forces with national conveyancing service lawlab to help progress technology it has developed. This new technology will allow homebuyers to secure property online without engaging in face-to-face meetings.

Mark Mendel, iBuyNew’s founder and chief executive officer, said the day when all real estate transactions would be completed electronically was fast approaching, with iBuyNew already processing its first digital contracts for off-the-plan property.   

“It’s only a matter of time before all transactions will take place electronically and people will be securing their preferred property online as they do now with most other goods and services,” he said.  

iBuyNew received a tremendous response to its recently launched online reservations system, which allows homebuyers to reserve their chosen property 24/7 via the Internet.

“We have partnered with lawlab for our online reservation system and are using their collaboration platform Rundl for electronic conveyancing,” Mendel said. “Rundl enables us to make the exchange process more seamless and keep communication streams open for all parties in the transaction.”
 
Using iBuyNew’s reservation technology, buyers can logon to view comprehensive price lists, floor plans, and related property documents. They can then reserve their chosen property via a simple three-step process by supplying purchaser, solicitor, and deposit payment details.
 
“Buyers no longer have to wait for a real estate office to be open to put down a deposit on a new property,” Mendel said.

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A summary of the 2016 housing market

When summing up the 2016 Australian housing market, CoreLogic head of research Tim Lawless noted two key words that best describe real estate activity across the year. These are: “diversity” and “complexity”.

Diversity

The Australian housing market was diverse in 2016 because conditions differed radically from region to region.

“At one end of the spectrum we have Sydney and Melbourne where dwelling values are rising at more than ten per cent per annum, while in Perth, values continue to trend lower,” said Lawless. “In Canberra and Hobart, the pace of capital gains has accelerated with both cities seeing annual capital gains rise higher than 8 per cent over the past twelve months.”

Meanwhile, Brisbane and Adelaide have shown more substantial growth, with values tracking 4% to 5% higher over the year. Across regional markets, the lifestyle and tourist-centric areas recorded an improvement in buyer demand. This increased demand has pushed prices higher, while markets related to the resources sector remained soft and are most likely approaching the bottom of what has been a considerable downturn in values and transaction numbers.     

Complexity

The Australian housing market was complex in 2016 because indicators are diverging and moving in multiple directions.

“Approved housing supply reached unprecedented highs during 2016 with high rise apartment projects attracting a higher risk profile, particularly across key areas of inner Melbourne and inner Brisbane,” said Lawless.

“Transaction numbers have drifted lower across most state capitals, however the reason for lower transactions can be traced back to low listing numbers in hot markets like Sydney and Melbourne, while in weaker markets such as Perth and Darwin, the downturn in buyer numbers is attributable to less demand for housing.”

Trends to keep an eye on this 2017

Trends to keep an eye on this 2017 include rising mortgage rates, a peak in the construction cycle, the potential for greater regulation in the investor space, and a renewed focus on housing affordability.

Mortgage rates have already started to rise, with variable rates from most lenders trending upwards due to higher funding costs. Higher mortgage rates could dampen housing demand, particularly when viewed in the context of historically high debt levels, which implies that Aussie households are increasingly wary about the cost of debt.

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Christmas can leave landlords thousands of dollars out of pocket

While the holiday season is meant for gift giving and celebrating with family and friends, it’s also a season that leaves many landlords thousands of dollars out of pocket. 

Loss of rent is the greatest financial risk for landlords—and Christmas is to blame, states new research from Terri Scheer Insurance. The landlord insurance provider’s figures show that 34% of claim types paid during the 2015-2016 financial year were for loss of rental income. 

During the last financial year (from December to March), there was a 26% increase in loss of rent claims.

“From our experience, the higher than average frequency of loss of rent claims is due to two key reasons,” said Carolyn Parrella, executive manager at Terri Scheer Insurance. “Tenants often put gift giving and Christmas spending ahead of paying their rent and utility bills. Money is tight and their rental payments fall to the wayside.

“It takes two to three months for this to show as the eviction process needs to take place prior to a claim being lodged. Unfortunately, this can put significant financial pressure on the landlord and leave them out of pocket once the mortgage and other costs are paid.”
 
According to Parrella, the new school calendar also prompts a spike in the loss of rental income.
 
“From anecdotal evidence we know that many families break their rental agreement, abscond the property and move to different suburbs for the new school year,” she said. “However, by maintaining a strong, positive relationship between tenant and landlord, the tenant may be more inclined to advise if they are looking to relocate.
 
“This can give the landlord an opportunity to proactively seek a replacement tenant and reduce the amount of time their property is untenanted. It also goes to show that landlords should not be complacent when it comes to protecting their rental income.”
 
Parrella encourages landlords to consider specially-tailored insurance policies to minimise any potential losses.
 
“If a tenant misses a few weeks of rental payments, a landlord can suddenly be out of pocket by $1000 or more. However, often for just the cost of a cup of coffee each week, landlords can protect themselves from this financial stress with insurance.
 
“Good policies should cover landlords for risks like malicious damage and accidental damage by a tenant and potential legal liability should a tenant or their guests injure themselves [on] the property.”

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8 Tips to Help You Achieve Your Property Investing Goals in 2017

Tips To Help You Achieve Your Property Investing Goals in 2015Many people will have set property investing goals for the new year and many will fail to achieve them. 

There is another group of people out there who do not set goals at all, because it is very easy to just live in the present – which is what most of us tend to do.

But whether you’re a new or seasoned property investor, these tips can help you set your goals for this year and ensure you don’t lose sight of them until they have been achieved.

 


Why have goals?

Setting yourself some smart goals can help to give you a long-term vision to work towards and simultaneously the short-term determination and drive that you will need to get there.

Goals can help to combine your acquired knowledge and experience and provide the focus that you will need to make the very most of your property investing journey and achieve long term and sustainable wealth.

By setting clearly defined goals which you can measure and take pride in, you will be able to monitor your progress, raise your confidence and recognise the achievements you are making. 

1. Set SMART Goals

A useful way of making goals more powerful is to make them SMART, which stands for:

  • S – Specific 
  • M – Measurable
  • A – Attainable 
  • R – Relevant 
  • T – Time-bound 

For example, instead of having “I will grow my property portfolio” as a goal, it’s more powerful to say

To have added at least one property to my portfolio by December 31, 2015, which I will purchase at a price at least 10% below the fair market value.”

Make sure with every SMART goal you set, you have a clear and convincing answer of why you want to achieve it. This answer can be your anchor, motivation and help you stay on track if and when things become difficult.

When you set this answer, make sure you then realise the benefits and outcomes that you can achieve when you tick off the goals. 

For example if you achieve the example goal stated above, it can bring you many more ancillary benefits, including creating instant equity to help fund future additions to your portfolio, potential future capital gains, helping to you create long term and sustainable wealth. 

2. State each goal as a positive statement

Remaining positive about your property investing goals in 2017 will help keep you motivated towards achieving them.

For example:

Having a goal of optimising my portfolio successfully by 31 January 2017 by:

  • Reviewing rents with my tenants and or property manager
  • Meeting my lender to discuss my current interest rates to see whether I can obtain a better rate or get a loan review with a mortgage broker

is more likely to keep you on track than a negative statement like Don’t make the stupid mistake of failing to optimise my portfolio.

3. Write down your goals

There is plenty of research which shows that writing down your goals will increase your chances of achieving them.

It will force you to be clear about what you want, motivate you to act and prevent you from thinking about the possible stumbling blocks on the road ahead.

Place your written goals somewhere prominent – as reading them regularly will help to positively reinforce your convictions.

If the goal is unspecific and hard to measure, make sure to break it down in to smaller, incremental goals which can be measured easily.

For example these 4 incremental goals:

  • I will spend 30 minutes per day searching for positive cash flow properties 
  • I will spend 30 minutes per day checking the property and suburb fundamentals
  • I will make a short list of properties that meet my buying rules and criteria
  • I will organise a financial health check and get finance pre-approval organised by 31 February 2015

Are all measurable and can combine to help you achieve a major goal of, for example, adding a property to your portfolio by the end of the year.

4. Create a checklist and track your progress

A checklist will help you keep track of what needs to be done, allows you to tick off items as you complete them, and allows you to see how they contribute to your goals. The checklist you make should contain steps to achieve the goal. 

Whether this is what you need to do, what you need to think about or what you need to learn to achieve it. 

Again, to be most effective you should add a completion date to each list item if applicable. The more detailed your checklist the better, as it will help you stay focused on what needs to be completed before starting the next task.

There are loads of free goal tracking apps that you can get to help with this. In fact, make it a goal to download one of them today!

Real Estate Investar members can also use our Portfolio Tracker tool to set long term portfolio goals and then track progress along the way. 

5. Be prepared to change some habits

One reason that people fail to achieve their goals, is that they don’t recognise the need to change some ingrained habits that have the potential to sabotage them.

For instance if one of your goals is to purchase a positively geared property by 31 December 2017, and you do not have accurate analysis tools to help you work out the long term cash flow position of the property in question, you are increasing your risk of failure.  

 I doubt there are any property investors  who have had a completely smooth run and become successful. So welcome each setback, learn from it and apply those lessons to the next goal you want to achieve.  

6. Discuss your goals with family or friends

Telling someone else about your goals and regularly updating them will help to keep you focused.

Giving weekly updates keeps you committed and increases accountability, and you’ll also have the benefit of receiving honest feedback from people whose opinions matter to you.

It can be a family member or a friend and as long as they’re supportive and willing to provide practical advice, you’ll increase your chances of accomplishing your goals.

7. Celebrate your achievements

Positive reinforcement is a good habit to have.

Reward yourself when you achieve a goal or have made significant progress on your checklist.

This will help reinforce your commitment and give an even bigger sense of accomplishment.  When you have achieved a goal, review the rest of your goals to learn from the experience.

Questions to ask yourself include:

  • If you achieved the goal too easily, adjust the next ones to make them more challenging.
  • If you learned something from achieving this goal that could lead you to change other goals, do so.
  • If you noticed that you have skill or knowledge gaps despite achieving the goal, set goals to address this.

8. Take advantage of resources

There are loads of resources, information and data that can help you fulfill your property investing goals.

For example there are countless books, websites, podcasts and educators that you can learn from.

Additionally, you may be interested in seeing how Real Estate Investar’s powerful and easy to use property investing tools can help you achieve your property investing goals and create long term wealth.

See the tools in action by viewing the pre-recorded webinar below or alternatively book in your complimentary, personalised demo today and learn how we can help you invest better.
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 Thanks for reading – good luck!


 

2017 to witness the return of patient capital to Queensland

It was a challenging year for Queensland’s commercial property market as transaction volumes plunged despite a host of local, interstate, and offshore investors and owner-occupiers entering the market.

While yields tightened throughout 2016, especially in the fast-growing retail sector, many owners preferred to stay on the sidelines as there were fewer investment options. This helped create a market where quality investment stock was scarce. As a result, the office and industrial sectors failed to reach the heights achieved in 2014-2015.

Analysts say next year should welcome the return of patient capital, as experienced buyers look to add value to their new assets rather than rely on historically low interest rates.

Ben McGrath, Knight Frank’s Queensland managing director, said 2016 was challenging, despite strong investor interest in Brisbane from offshore and southern buyers looking for better yields.   

“Anything with strong investment fundamentals was selling, and although the volume of sales in office and industrial was less than previous years, the success rate has been high, if not higher,” he said. “The amount of capital that is searching for a secure home at the moment is as great as we have ever seen it.”

Geoff McIntyre, JLL Queensland’s managing director, said there was a prevailing view that yields have bottomed out, which was reflected in the drop of transaction volumes around the world. “We are expecting yields to stay relatively low for a longer period before moving back out,” he said.   

This year was the peak of the current CBD office supply cycle, with the completion of 180 Ann St, 480 Queen St, and 1 William St, placing pressure on A-grade and premium markets and pushing vacancies to nearly 17%.

Aside from some large one-off leases, such as Tatts Group’s surprise take up of an extensive new lease in 180 Brisbane, small deals took precedence as many businesses took advantage of incentives of up to 40% to relocate.

While the Brisbane inner-city apartment market performed strongly at the start of the year, borrowing restrictions and a perceived over supply have slowed down the city’s high-rise residential development sector.

There were a number of high profile company collapses this year, and the property sector is bracing itself for the likelihood of forced sales of apartment development sites and receivers being more involved in the market.

McIntyre said 2017 would witness a more disciplined market, with investors reverting to more traditional property strategies. “I think we will emerge next year as a more normalised market which is good for experienced property people who know how to identify value in assets, refurb and grow rents as opposed to being reliant on cap rates going down,” he said.

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New property investment expo to launch in Melbourne next year

A new expo that promises to educate and inspire everyday investors will be staged at the Melbourne Convention and Exhibition Centre next year. The Property & Investing Expo will take place from the 26th to the 27th of August, 2017.

Attendants can expect free seminars, expert advice, and over 100 exhibitors showcasing their services and opportunities.

“This brand new event will provide investors at all levels with the most up to date information, insights, opportunities and market data available,” said exhibition manager Glenyse Ford.

“As well as a wide range of exhibitors from all corners of the property and investment world, visitors can learn from free seminars running all day. There will be one seminar stage dedicated to property investors and one dedicated to shares, trading and super.”

Exhibitors at the show will include accountants, financial advisors, property consultants, developers, banks, builders, conveyancers, real estate agents, tax advisors, insurance companies, and other professionals.

“This is the only show to bring together the property, sharemarket, super and managed funds industries,” said Ford. “It will be a unique opportunity for investors to research and buy products and services, and to discover new opportunities for wealth creation.”

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Two in five SMSFs hold either residential or commercial property

According to a new survey by the Financial Services Council (FSC) and UBS Asset Management, as many as two in five self-managed superannuation funds (SMSFs) hold either residential or commercial property, although such investments still make up a small portion of the overall portfolios.

The proportion of self-managed funds that have residential property rose to 22% this year, up slightly from 19% in 2015. Meanwhile, the proportion of schemes investing in direct commercial property—and so excluding listed property trusts—increased slightly to 20% this year from 18% in 2015.

The survey also found that self-managed super fund trustees are heavily invested in property outside super.

Of those savers who either supplement their self-managed fund income in retirement, or want to do so, 44% said this would come from property investments. In contrast, only 34% said their income was or would be supplemented from share investments.

The survey’s findings indicate that investors are searching for income-generating assets as they combat low interest rates. Many are also placing their bets on soaring property prices in Sydney and Melbourne.

However, the growing interest in houses, apartments, offices, and factories may place self-managed fund returns at risk if there is a correction in the market. Returns are also likely to be crimped by banks tightening the rules around interest-only lending.

One of the biggest changes in the past year was the spike in the proportion of DIY schemes owning international shares, up from 23% of funds last year to 30 percent in 2016. More funds are also invested in exchange-traded funds (ETFs). These are listed products that track an underlying index.

The growing popularity of both asset classes suggests trustees are becoming increasingly aware of the need to diversify their portfolios away from the heavily concentrated Aussie share market.

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There was a slight increase in the national vacancy rate in November

New figures released by SQM Research this week reveal that the number of national residential vacancies rose slightly in November, with increases in most cities and 78,629 rental homes available. The national vacancy rate in November was 2.5%, up from 2.3% in October 2016.

The vacancy rate increased the most in Brisbane, where it rose to 3.3% in November, up slightly from 3.0% in October 2016. Sydney and Melbourne also recorded vacancy rate rises of 1.9% and 2.1% respectively, up slightly over the month. Moreover, the year-on-year results reveal that the national vacancy rate was slightly higher.

Hobart recorded the lowest vacancy rate of just 0.6%, though it was up slightly from October 2016, when it was 0.5%.

The vacancy rate dropped in Adelaide, bucking the nationwide trend.

Asking rents

Rents eased slightly in Sydney over the month to December 12, where asking rents for houses sat at $736 a week and $509 for units. Meanwhile, asking house rents rose in Canberra by 2.7% to $540 a week and $412 for units with a vacancy rate of 1.2%.

“The national vacancy rate has risen, which is not uncommon in November as the year winds up. This has taken pressure off rents in Sydney, though it is still the nation’s most expensive city for tenants,” said Louis Christopher, managing director of SQM Research.

“Asking rents too have slipped back in Perth with the continued effects of the mining downturn. In Brisbane, the vacancy rate has continued to rise in November following a rise in October, and with more unit supply coming onto the market in 2017, the vacancy rate could move even higher in 2017, taking further pressure off rents.”

Hobart continues to offer the most affordable house rents at $352 for a house and $304 for a unit. Adelaide is the next most affordable city, with rents for houses at $366 and $288 for units a week.

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Brisbane ranked fourth among cities vying for foreign direct investment

Brisbane recently took the fourth spot in a prestigious global ranking of cities vying for foreign direct investment. Queensland’s capital was also ranked in the top 10 worldwide for human capital and lifestyle.

Brisbane moved up one spot to place fourth out of the 53 submitting cities in the “Foreign Direct Investment Strategy” category of fDi Intelligence’s Global Cities of the Future 2016/2017 report. (fDi Intelligence is a division of the London-headquartered Financial Times.)

Ranked number one in that category is Edinburgh, followed by Hong Kong, Chicago, and Brisbane.

This year, Brisbane also placed highly in the publication’s overall rankings of 131 cities worldwide, earning the 10th position for human capital and lifestyle.

“Placing fourth for foreign direct investment strategy demonstrates that Brisbane is successfully showing the world that our city is economically resilient, supports foreign investors across a range of industry sectors, and is backed by a robust and connected business and government environment,” said Graham Quirk, Lord Mayor of Brisbane.
 
“To be ranked within the top 10 globally for human capital and lifestyle is testament to the outstanding education, research, business, employment and lifestyle opportunities that continue to attract and retain talented and skilled people in our great city.”

The publication also named Brisbane the winner of two inaugural awards for strategy, driven by Brisbane Marketing, the city’s economic development board.

Brisbane’s 2022 New World City Action Plan was honoured with the Strategic Vision Award. Furthermore, the city’s successful tourism infrastructure and hotel investment strategy saw it win the Tourism Development Award.

“The Brisbane 2022 New World City Action Plan has put [our] city firmly on the path toward greater economic growth and prosperity by focusing on seven key economic priorities and eight promising growth sectors,” Quirk said.

“Brisbane’s hotel investment and tourist attraction strategy focuses on building the tourism and visitation economy by attracting foreign direct investment into infrastructure such as cruise ship terminals, major tourist attractions, and four and five-star hotels.
 
“More than $10 billion worth of major project and infrastructure work in the pipeline will support greater numbers of tourists who are choosing our progressive and multicultural city for the wealth of unique experiences on offer.”

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How to successfully navigate the property market in 2017

With lenders projected to lower discounts for new borrowers and mortgage rates expected to increase, a great deal of uncertainty surrounds the Aussie property market in 2017.

Despite such concerns, Ben Kingsley, Chair of the Property Investment Professionals of Australia (PIPA), says there are still plenty of opportunities to be found for investors who perform their due diligence and have a long-term mindset when it comes to property investment.
 
“The long-term fundamentals of well-selected property remain strong. Investors should avoid making any rash decisions and keep focused on their long-term investment goals,” he said.
 
Kingsley said investors need to think out of the box in order to overcome affordability issues and avoid pockets of oversupply. “With more potential downside risk in our major markets, investors need to be strategic about their investment approach. The advice of qualified professionals has never been more important.”  
 
Listed here are PIPA’s top tips for property investment success in 2017:
 
Plan for higher borrowing costs: After months of record lows, home loan costs are starting to shoot up once again. In light of this, aspiring investors should factor higher interest rates into their cash flow planning.
 
Join forces: According to analysts, Australia’s largest capital cities are unlikely to see a dramatic reversal in property values. By joining forces with other investors, prospective investors can overcome affordability issues and get a leg up the property ladder.   
 
Think outside the square: Investors should not be limited by geographic or mindset constraints. “While it may be tempting to buy an inner-city terrace, compelling investment returns can be found across a range of markets, often with much lower price tags and compelling yields.” 
 
Tread carefully on inner city apartments: Record levels of new construction have created a strong supply of new CBD and inner city ring apartments in Brisbane, Sydney, and Melbourne. Hence, investors should exercise great caution when considering a purchase in any of these locations.
 
Keep a cool head: Don’t allow doomsday predictions or media hysteria to cloud your judgement. Instead, remain focused on your long-term wealth aspirations and seek out properties that are aligned with your financial goals.
 
Seek professional advice: It pays to seek out the assistance of experts. “Build a strong support team, including a Qualified Property Investment Adviser (QPIA), mortgage broker and buyer’s agent” to ensure success.   

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