News

The latest happenings in the Melbourne property market. For our Essays and The Secret Agent Report, see our Research page.


Interest rate alert

For the 3rd time in 6 months the Reserve Bank of Australia has raised official interest rates by a quarter of a percentage point to 7.0%.

Inflation has been blamed for the latest increase which was above the RBA's 2-3% threshold. On an average mortgage of $250,000 this is expected to add approx $52 per month to the loan repayment, while the outer city is not totally immune it should adapt to the new change.

For outer districts of Melbourne this is where the latest rate rise will more than likely hurt.

 

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Why won’t they contact me?

Often in hot property markets it can be frustrating getting in contact with a real estate agent s about a desired property. The reason is simple, when the property market is hot, properties sell themselves.

The main focus of a real estate agent can often be getting the next listing for sale, that’s why often people who are selling a property can expect a call almost everyday while a buyer can leave many messages without ever getting a follow up call back!

Good real estate agents will always follow up with purchasers as they should however it is easy to get complacent in these strong times. If the market does turn then who knows we may see the Real Estate bore in action!


American interest rates

americanflag1Overnight the American Fed has cut interest rates for the 2nd time in 9 days. The .5% cut has now reduced the short term rate to just 3% with many experts believing the Fed will cut rates by a further .25% in March.

With America on the verge of a recession and it's housing prices in retreat it is often discussed how this affects Australia's future and its housing market.
America slowed to 0.6% annual growth in the last quarter of 2007 which is completely different to where the Australian economy has been heading, the OECD forecasts the Australian economy to grow by 3.3% in 2008.

While not immune to the sub prime disaster that's happening in the USA at the moment, Australia has not got it self into the same mess. If you are looking for a sign at the moment then look at all the credit card companies pitching ads with very low rates for credit card debt transfers!

In fact because of our strength not through lack of it we may see a further interest rate rise shortly, this is sure to test the outer suburbs of capital cities but I feel will leave the inner city area's largely unaffected with strong house growth predicted again this year.

Australia has a diversified group of trading partners; Australia has been ranked the most resilient economy in the world for 5 of the past 6 years (IMDWCY2007) in part because of that.
Asia forms the majority of who we trade with and has a large affect on the strength of our economy, currently this is strong and is predicted to keep growing and quickly!

While no country is immune to changing economic conditions, Australia's future and property market look strong for the outlook ahead while home owners in America should brace themselves for some tough times still ahead!

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Rental property expenses

Whether you have just made your first property investment or have a number of properties in your portfolio it's always handy

having an idea as to what you can claim on your property investment when it comes time to lodge a tax return.

Be aware that you can only claim for the period that the property is rented or available for rent, check out the

Australian tax office for more information.

Expenses could include:

  • Advertising for tenants
  • Bank charges
  • Body corporate fees
  • Borrowing expenses
  • Council rates
  • Decline in value of depreciating assets
  • Gardening and lawn mowing
  • Insurance
  • Land tax
  • Pest control
  • Property agent fees or commissions
  • Repairs and maintenance
  • Stationery
  • Telephone
  • Water charges and travel undertaken to inspect the property or to collect the rent.

If part of your property is used to earn rent, you can claim expenses relating to that part only. You will need to work out a reasonable basis to apportion the claim.

Example:
Peter’s private residence includes a second storey which he rented out. The second storey represents 30% of the total floor area of the house. Peter also shared the laundry with his tenant. The laundry takes up 10% of the total floor area of the house. If half is a reasonable figure for use of the laundry by the tenant, Peter can claim 35% of the expenses for the property – that is, 30% + (1/2 x 10%) = 35%.

Always speak to a qualified accountant first as to the correct advice!
For a recommended accountant contact us, happy investing!
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Real estate agents and offers

I was talking to a lady yesterday who recently put in an offer on a property in Melbourne (Private sale) to a local real estate agent. The estate agent told her that the offer would be kept confidential even within his group of colleagues. She was very doubtful that this was true and asked for my opinion as to whether her offer would be ‘shopped’ around.

Most often agents will protect offers on listings they receive for the following reasons:

1. If they say they will then ethically they should

2. Internally in an estate agency it is very competitive and the last thing the salesperson wants is for a competing colleague to come along and produce a buyer with a more attractive offer and they miss out on the sale and the commission!

Always check how your offer will be treated if accepted by the vendor.  Many agents operate very differently, most typically a 24 hour ‘tender process’ will begin once an offer has been submitted on contract and has been verbally accepted by a vendor.

Other methods such as boardroom auctions, Dutch auctions and immediate sale are also very common. Remember before making an offer on a property ask how the rules will be applied if your offer on a property is accepted.


Early Australian housing

earlyaushouseAustralia day has just been and gone but if you where living in this country in the late 1700's, how did you build your home to be comfortable and adapt to the climate?

Well obviously comfort was never an easy option for early Australian settlers!

Early Australian homes where very primitive and built mainly from the abundance of timber. These early homes often had no walls and the timber was used for used for walls, roofs, floors, doors, windows and even chimneys.

The Australian property mindset has always been 'the detached house on a quarter acre block'. We have started to see a shift in this way of thinking in our capital cities for some time but expect a massive change over the next 5 years on how we live and build!

 

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So what is a Buyers Advocate?

It can be a little confusing I know. According to the Real Estate Institute of Australia the official meaning for a buyers advocate is:

BUYERS ADVOCATE / AGENT – 'Represents a property buyer in negotiations with a vendor or his/her agent. The buyers advocate is paid by the buyer. A buyers advocate should be licensed and certified to act as a buyers advocate'

Think of a normal real estate agent representing the seller and then reverse this process so the agent is acting for the buyer, their role is to make sure the purchaser pays as little as possible for the right property saving the purchaser money.

A buyers advocate is usually employed to act in two ways, the first being secure only where a buyers advocate will either bid at auction for the client or conduct negotiations on the buyers behalf on buyer found properties and the second being a 'full search' which the buyers advocate will also find the right property for the buyer as well as securing it.

By employing a buyers advocate to act on your behalf you get the real benefits of someone who has an in depth understanding of how to negotiate for property while also staying emotionally detached from the outcome which so often gets a buyer into a situation where they pay too much or simply miss out on their desired property. Investors also get the real benefits of being able to claim the use of a buyers advocate as a tax deduction, unfortunately for home buyers this does not apply (we are working on it!)

As a client once told me 'it's like having a heavyweight boxer in your corner', maybe a buyers advocate is worth considering for your next property adventure!

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Game of Thrones Season 7 Episode 1 Spoilers Rumors & Updates

Game of Thrones Season 7 Episode 1 : Cersei and the Faith Militant Lancel Lannister along with the Faith Militant comes to Cersei to take her to the High Sparrow to which she blankly refuses. When one their men tries to attack, he is brutally killed by the Mountain. She then tells the Militant that the High Sparrow is always welcome to see her in the Red Keep. Moreover, King Tommen announces the royal decision to end trial by combat.Dissapointed by this Cersei meets Qyburn who through Varys’ little spiders has found out something important.

Game of Thrones Season 7 Episode 1 Spoilers Rumors & Updates

Arya attacked

Watch Game of thrones season 7 episode 1 spoilers and updates online from our site. Lady Crane, the actress Arya was to kill, finds her lying in her chambers wounded. She nurses her helps hr stitch the wounds. Later we see the Waif finally finishing Arya’s job by killing Lady Crane. She then attacks Arya who escapes this time. The Waif follows Arya in the city until she reaches Arya’s hideout. We see Arya standing there cutting the only burning candle in the place with her sword needle. Later in the house of Black and White JaqenH’ghar finds a trail of blood and follows it to hall of faces. He finds Waif’s face lying there and Arya pointing her sword at him. He then congratulates her on finally becoming a No One, to which Arya refuses and tells him she’s Arya Stark of Winterfell and that she’s finally going home.  Jaqen looks at her proudly as she leaves. Arya’s training is finally complete, which is certainly a bad news to the ones on her hit list.

The episode, just like its predecessor, has set up to tone for the penultimate and the finale episode. While the viewers now await the great battle in the north, it would be equally exciting to know Cersei’s ultimate plan now that trial for combat is gone. Also, Khaleesi has returned, so fans are also keen to know how she plans to defeat the Masters and finally set upon her journey to Westeros. To know all this and more Game of Thrones info, feel free to visit us.


Up and Up and Up

UpArrowsmallAn interesting article appeared in the Age today about Melbourne house prices over the past 12 months.

Melbourne surged 25.2% in 2007 outstripping all other Australian capital cities.

With 1000 people moving into melbourne each week demand looks likely to increase however it is doubtful 2008 will be as strong as 2007.

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Good buying in Queensland

Queensland to me has always seemed the place where the more 'established' people among us migrate to get some warmer weather.

_Mango

Currently in a boom, Queensland is growth rate is nothing short of spectaclur with great forcasts ahead, So where do you buy in this roaring state? I say you go where the Mangoes are, Tullip is only 25 km from Townsville are is surging in vale however pricing is still we below nearing towns and with an expected inflow of 20,000 migrants over the next 2 years due to the food boom this could be a good chance to profit.

Enjoy the mangoes!

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