Archive for Real Estate Agent

Labor announce start date for negative gearing and capital gains tax changes if elected

The Australian Labor Party have announced their negative gearing and capital gains tax changes will come into effect on 1 January 2020, if elected.
Real Estate Institute of Australia (REIA) President Adrian Kelly said REIA remained concerned about the impact the policy would have on Australia’s housing markets, buyers, renters and economic activity.

“This concern is magnified in the current market. There is almost truckloads of analysis and reports showing the adverse impacts of the policy on mum and dad investors, home owners, renters, the construction industry, state governments and the economy.

“The latest was last week when SQM Research showed that house prices would drop between five per cent to 12 per cent on a weighted average for the capital cities for 2020 to 2022 over and above any other falls being experienced, while rents are expected to increase by between eight per cent and 15 per cent on a weighted average for the capital cities for 2020 to 2022,” Mr Kelly said.

The SQM Research report also showed housing construction activity will fall by 25 per cent to 30 per cent from 2019 levels, which; will have employment and GDP impacts; property sales turnover is forecast to fall by a further 12 per cent to 15 per cent, resulting in; a drop in state stamp duty revenue of approximately $2.3 billion.

“For first home buyers, who according to Labor, should see improved housing affordability by a ‘levelling of the playing field’ will now face a faltering economy, lower employment prospects, the possibility of higher interest rates under a Labor Government and higher rents whilst they save for a deposit,” Mr Kelly said.

Read REIWA’s response to the SQM Research findings.

For more information about REIWA’s position on negative gearing and capital gains tax, visit whataboutwa.com.au.

Tenant hotspots: WA’s 10 top searched suburbs for rentals revealed

Reiwa.com’s latest search result data has revealed the 10 suburbs and regional towns most popular with West Australian tenants looking for a rental home over the last 12 months.
REIWA President Damian Collins said the list was quite diverse, as it featured seven suburbs from within the Perth region and three regional towns.

“The list is also quite varied in terms of population. While we would expect to see suburbs with larger numbers of properties in areas like Baldivis and Canning Vale return high search volumes, a number of the suburbs on the list that ranked well have fewer than 10,000 people residing in the area.

“Of course, areas like Mandurah, Geraldton, Bunbury and Kalgoorlie also represent a broader urban area which has likely contributed to their popularity with WA tenants.

“Overall, the suburbs south of Perth proved most popular with WA tenants, with Mandurah, Rockingham and Baldivis ranking first, second and third respectively for searches. Geraldton and Bunbury in regional WA followed closely, rounding out the top five,” Mr Collins said.

Joondalup, Scarborough, Kalgoorlie, Ellenbrook and Canning Vale completed the list.

reiwa.com data shows nine of the 10 suburbs on the list experienced declines to the number of properties available for rent in their respective areas over the last year, with Mandurah, Canning Vale and Bunbury recording the most significant reductions.

“When there is increased interest in a suburb and fewer rentals available, this leads to stronger competition between tenants. While overall rent prices in Perth have been stable for a while now, there are some pockets that are starting to see prices rise,” Mr Collins said.

“From the list, Baldivis, Geraldton, Scarborough and Canning Vale all experienced increases in median rent over the last year, with their individual rent prices lifting by $10, $5, $18 and $10 respectively.

Landlords also found it quicker to find tenants in these areas, with reiwa.com data showing nine of the 10 suburbs saw their average leasing times improve during the last year.

“Canning Vale (39 days) and Joondalup (45 days) had the most notable decline in leasing times, with each experiencing a reduction of 11 days during the year, followed by Baldivis (41 days), Geraldton (57 days) and Scarborough (39 days), which reduced by 10 days each. Bunbury was the only area on the list to not record an improvement in average leasing time,” Mr Collins said.

“These 10 areas clearly hold a lot of appeal for West Aussie tenants. If you’re an investor looking to buy, I’d recommend speaking to a real estate agent about how these local markets are performing and what investment opportunities are available.”

Perth Market Snapshot for the week ending 10 March

  1. 2019

Housing affordability declined in WA in the December 2018 quarter, according to the latest findings from the Real Estate Institute of Australia and Adelaide Bank Housing Affordability Report.

Residential sales market

The December 2018 quarter Housing Affordability Report found West Australians were using up a greater proportion of their income to meet loan repayments, with the figure increasing from 22.5 per cent in the September 2018 quarter to 23.1 per cent in the December 2018 quarter.

On an annual basis housing affordability in WA has improved, having decreased 0.8 per cent when compared to the December 2017 quarter.

There were 7.6 per cent more loans taken out in the December 2018 quarter than in the September 2018 quarter, according to the report, with a total of 11,017 loans (excluding refinancing) recorded for the quarter. Although this figure is an improvement on the September 2018 quarter, it is down 6.2 per cent compared to the December 2018 quarter.

The average loan size increased in WA during the December 2018 quarter, up 1.2 per cent to $340,515 compared to the December 2018 quarter. On an annual basis, the average loan size has declined by 3.5 per cent.

First home buyers

First home buyer activity increased 6.7 per cent in WA during the December quarter, with 3,833 new property owners recorded, however this figure is down 4.1 per cent compared to the December 2017 quarter.

First home buyers make up 34.8 per cent of the state’s owner-occupier market (the largest percentage in the country!) and represent 13.2 per cent of all first home buyers in Australia.

The average loan to first home buyers increased by 0.9 per cent to $306,850 during the quarter, and decreased 2.9 per cent compared to the December 2017 quarter.

Rental market

Rental affordability has declined in Western Australia, with the proportion of income required to meet the median rent now sitting at 16.6 per cent, an increase of 0.5 per cent during the quarter and 0.2 per cent over the year.

Established property purchases increase 20 per cent in WA first home buyer market

25 February 2019

More first home buyers are choosing to buy established properties rather than build new, according to reiwa.com analysis which shows the number of first home buyers in WA purchasing established properties increased 20 per cent between the December 2017 and 2018 quarters.
REIWA President Damian Collins said WA first home buyer preferences had shifted back towards established properties, despite the First Home Owner Grant only being in place for those who choose to purchase new builds.

“As it currently stands, the WA First Home Owner Grant unfairly penalises buyers wanting to purchase established properties by only providing assistance to those who choose to build. Initially, this had the effect of skewing first home buyer preferences towards new builds, but it appears more first home buyers are choosing to forgo the grant in favour of purchasing an existing property in an established suburb.

“It’s not fair that so many first home buyers are missing out on the grant, simply because they don’t want to build a new home. Or even worse, it means some first home buyers who want an established property are unable to enter the market. Housing affordability remains a significant hurdle for many West Australians and we should be encouraging and incentivising all first home buyers to enter the market, not just those who choose to build their first home,” Mr Collins said.

REIWA advocates for the reintroduction of a First Home Owner Grant for eligible first home buyers who purchase an established residential dwelling.

“Increasing the demand for established housing will have a knock-on effect to other areas of the market. This would allow more WA households to right size into accommodation that suits their changing needs, resulting in more transfer duty revenue for the state,” Mr Collins said.

“First home buyers have consistently shown they prefer to buy established homes. The WA Government should respect the preferences of first home buyers by not discriminating between established and new build properties, enabling more West Australians to make the dream of home ownership a reality.”

View more information about REIWA’s stance on the First Home Owner Grant.

WA’s top searched suburbs for sale revealed

reiwa.com’s latest search result data has revealed the 10 suburbs most popular with WA property seekers looking to buy in the last 12 months.
REIWA President Damian Collins said nine of the 10 suburbs on the list were in the Perth region, with Denmark the only regional suburb to make the list.

“Hillarys was the most popular suburb for West Australians searching for property, taking out first spot on the list, followed by Denmark, Woodvale, Duncraig and Canning Vale.

“Overall, it’s quite an eclectic list of suburbs, with a good supply from both north and south of the river and quite varied in terms of population levels. While it’s no surprise a suburb like Canning Vale has trended highly, given it’s one of WA’s biggest suburbs, it’s interesting to note that six of the 10 suburbs have fewer than 10,000 people residing in the area.

“Denmark in the Great Southern region has proven very popular with prospective buyers for example, ranking second on the list, which is quite remarkable given it has a population of just 2,600. Denmark has a lot of lifestyle appeal, especially with those seeking a sea-tree change. It seems many West Australians are turning to the internet to learn more about Denmark and find out what kind of properties are available in the area,” Mr Collins said.

The biggest trend in terms of lifestyle appears to be the push towards coastal suburbs, with six of the 10 top searched suburbs well-known for their proximity to WA’s great beaches.

“In particular, the northern coastal suburbs were popular, with Hillarys, Iluka, Sorrento and Mindarie all rating highly with WA property seekers,” Mr Collins said.

Of the 10 suburbs to make the list, reiwa.com data shows eight have median house prices above the Perth median of $510,000.

“This suggests it’s the trade-up sector of the WA market who are most actively searching for property right now,” Mr Collins said.

“While sales activity across Perth remains subdued, the high levels of interest from prospective buyers in these suburbs should provide local sellers with some confidence.

“These areas are clearly striking a chord with WA property seekers, so there is excellent opportunity for sellers to take advantage of this interest. My advice is to listen to your real estate agent and price your property in-line with market expectations to ensure your home stands out.”

Perth Market Snapshot for the week ending 3 February

Sales activity decreased nine per cent in Perth this week, with REIWA members reporting 484 transactions.
This decrease can be attributed to a 16 per cent decline in house sales and a one per cent decline in unit sales, however there was a 57 per cent increase in vacant land sales during the week.

The lower level of activity experienced this week can most likely be attributed to the Australia Day long weekend.

Listings for sale

There were 16,633 at the end of this week, which is one per cent less than last week.

A closer look at listing stock levels shows house listings remained stable, listings for units decreased by two per cent and listings for vacant land decreased by four per cent.

This week’s total figure is four per cent higher than four weeks ago and eight per cent higher than levels seen a year ago.

Perth rental market

REIWA members reported there were 6, at the end of this week, which is two per cent less than last week.

This week’s rental listings figure is eight per cent lower than four weeks ago and are 27 per cent lower than the same time last year.

 

REIA calls for Federal Labor to be transparent about property taxes

he Real Estate Institute of Australia (REIA) has called on the Federal Labor party to announce what they plan to do about existing negative gearing and capital gains taxation arrangements if elected.

The call comes following a recent announcement by the Leader of the Opposition, Bill Shorten, that there would be no decisions until after the Federal Election.

REIA President Adrian Kelly said all Australians deserved to know what the Federal Labor Government planned to do if elected and questioned whether they were keeping quiet in an attempt to mitigate voter backlash in the lead up to the election.

“It is not acceptable to appear to be ‘having a couple of bob each way’ in the lead up to the election. There is already enough market uncertainty particularly in the larger states and a “nothing to see here” approach will only exacerbate this uncertainty.

“The ALP needs to come clean with what its election policies actually are so that all Australians – including the nearly 100,000 real estate businesses across Australia together with their employees and families – know exactly what they will be voting for and can make an informed decision at the ballot box,” Mr Kelly said.

Based upon previously announced taxation policies from the Federal Labor party, REIA have highlighted which Australians will be most affected by these changes.

According to REIA, the big ‘losers’ would be:

  • Mum and dad’ investors who want to buy an existing investment property to supplement their retirement savings will no longer be able to claim a modest taxation deduction.
  • Home owners who will see additional downward pressure on home prices in an already falling national market.
  • Tenants who will see their rents rise just as they did under the Hawke/Keating experiment in the 1980s.
  • Builders and their ‘tradies’who will build less houses as shown by independent research undertaken for the Master Builders Association last year.
  • State Governments and their constituents who will receive less transfer duty revenue to spend on much needed infrastructure.

“REIA welcomes the promise to consult but let’s do that now, not after the election, and let’s look at all property taxes in a holistic approach and not just negative gearing and capital gains tax as if that’s the panacea to housing affordability,” Mr Kelly said.

Find out more about negative gearing and why it’s positive for West Australians.

Why the first property you buy is the most important of all

Buying property will undeniably be the largest and potentially, the most profitable investment you make.

Your first home is what gets you on the property ladder and can either set you up for the future or hold you back from your long term dream property.

For some, your first home will not be the one you raise your family in, but it is another step in the right direction and if you make the right decisions with your first house, you will be able to secure your ideal family home in an area you love.

Generally speaking, it is natural to have emotions running high when you make that first purchase, as the house hunting and finance process can be exhausting. Try to avoid this by taking your time to research, seek professional advice and make a decision based on your budget and lifestyle goals.

Months, even years of savings could all be sacrificed for a property you buy that loses you money. Alternatively, a clever first purchase that grows in value could leave you never having to save money again for a deposit on your next home.

REIWA President Damian Collins said the first home you buy is the most important because its capital growth is how you create equity to be able to afford to trade up to the next home.

“Most people buy at the lower end of the property market for their first home and through their lives, many move into higher price brackets as their family and income grow,” Mr Collins said.

The first step to achieving your house goals is saving a deposit for your first property purchase. How much you save can ultimately affect what, where and when you buy, as well as how much you are able to borrow from the bank. All of these factors will point to you being ready or not to buy a property that will give you the best first start in the property market.

Think long term, not just about the appeal of the property today. The best way to set yourself up is through your first home purchase, this again comes back to ensuring your first property is a smart investment decision.

“Quite often existing homes that are a little older in established suburbs grow in value more than brand new homes in the outer suburbs. It’s nice to have everything brand new, but remember, the first property is the stepping stone to your dream home,” Mr Collins said.

It is important to consider your long term goals, as many people strive to raise their families in nice communities close to schools, parks and recreational facilities. Get yourself used to the locations you like living in and where you can see yourself raise your children or if you plan to in the future.

Perth median house price increases for second month in a row

Perth’s median house price increased 1.6 per cent to $518,000 during November, according to reiwa.com data.
REIWA President Damian Collins said this was the second month in a row Perth’s median house price had shown improvement.

“Perth’s median house price has been fairly flat throughout 2018, so it’s pleasing to see two consecutive months of median price growth as we head into the New Year.

“reiwa.com analysis shows there was a shift in the composition of sales in November, with a greater proportion of transactions occurring above $1 million than there were in October. This has contributed to the increase we’ve seen in Perth’s median house price this month,” Mr Collins said.

The top selling suburbs in November were Willetton, Baldivis, Canning Vale, Duncraig and Ellenbrook, while reiwa.com data shows Quinns Rock, Willetton, Doubleview, Leeming and Wellard had the biggest improvement in sales volumes (percentage wise).

“While overall sales activity in the Perth Metro region remains subdued, numerous suburbs bucked this trend during November to record notable improvements in sales,” Mr.

Listings for sale were five per cent higher at the end of November than they were at the end of October.

“It’s not unusual to observe increases in listing stock at this time of year. Sellers are returning to the market following the lull of the winter period and wanting to get in quick before the holiday season ramps up. With listing stock rising, buyers have a good supply of choice available to them, making it a very good time to buy,” Mr Collins said.

Perth rental market

Perth’s overall median rent price continues to hold at $350 per week, however reiwa.com data shows there was a small $5 increase to the median unit rent price in November.

“While the overall median and median house rent ($360 per week) were stable, pleasingly the median unit rent did increase to $330 per week during November. Additionally, when we compare the November 2018 median unit rent to three months ago (August 2018), reiwa.com data shows the unit rent has increased by $10 per week,” Mr Collins said.

The five suburbs which experienced the biggest increase in leasing activity (percentage wise) during November were Kardinya, Coolbellup, Bedford, Kelmscott and Harrisdale, while Perth, East Perth, Scarborough, South Perth and Baldivis had the most number of leased properties.

Listings for rent were stable in November, remaining below 7,000 – a significant 25 per cent decline compared to the same time last year.

“The rapid decline in listings we’ve observed this year is a key driver behind the rental market’s recovery. It has also had a significant impact on the vacancy rate, which continues to decline and now sits at 3.3 per cent,” Mr Collins said.

What economists predict for Australian house prices in 2019

In the middle of last year, several top economists were predicting house prices to in fact increase in 2018 – one forecasting as much as nine per cent, but since then house prices have experienced their largest and longest peak to trough decline in recent history spurred on by increased housing affordability constraints, a banking royal commission with a microscope on lending standards, and APRA’s restrictions on new investor loans.

Now that the price falls are well and truly in motion, all five economists recently surveyed by The Australian Financial Review forecast national house values would continue to drop in 2019, with Sydney, the epicentre of the downturn, dragging down the national average.

Stephen Koukoulas, of Market Economics, was most downbeat about the state of the property market, with expectations prices would fall in Sydney between 7.5 per cent and 10 per cent in 2019 after a drop of 7.5 per cent in 2018.

Nationally, he predicted house prices would fall by between five per cent and 7.5 per cent.

“From the 3rd quarter in 2019, I am forecasting some stability in prices as supply and demand forces underpin new activity,” Mr Koukoulas said.

By then he expected cashed-up first-home buyers would be lining up to take advantage of increased levels of affordability.

A key consideration for Geordan Murray, HIA acting principal economist, is that while population growth is slowing, it remains strong and will ensure ongoing demand for housing throughout the cycle.

“The labour market has been improving and is projected to continue to do so. This should contribute to further modest improvements in wage growth,” Mr Murray said.

“There are risks around borrowing costs.”

A key issue mentioned by the economists was that at some point in 2019 is whether the RBA may be forced to consider another interest rate cut if the slump in home prices starts to impact consumer spending and the outlook for inflation.

While each economist offered a variation on how much prices would fall in 2019, each attributed the tightening of credit, rising mortgage rates, and a surge in new supply to the further softening of the market.

To see each economist’s predictions, read the full article on the Australian Financial Review. Please note you will need to be an AFR subscriber to read the full article.

How to safeguard your rental bond

As the end of your tenancy agreement approaches, it can be a very tedious process dealing with your bond refund.

Ideally, most tenants will receive their bond money back at the end of the tenancy, once the real estate agent inspects the property against the Property Condition Report (PCR), essentially ensuring the premises is in the same condition as it was at the commencement of the lease, taking into account fair wear and tear.

However, if the state of the property does not comply with the PCR report, then the property manager or landlord has the right to claim money from the bond to cover these expenses, which could be anything from broken door handles to garden maintenance.

What you need to know about your rental bond money.

We want all tenants to be confident when it comes to getting their bond back, so to take the guesswork out of your end of lease inspection, here is some advice when it comes to getting your full bond back.

Fill out the initial condition report

Taking the time to fill out the initial PCR when first moving in can save you a lot of money and hassle when it comes to your last inspection. When moving into a new place, the last thing many tenants want to do is diligently inspect every nook and cranny of the house, but it’s these minor issues that become the very cause of disagreements between the agent and the tenant during the final inspection.

Use the initial PCR as a reference, so you and the managing agent have something to compare when it comes to the final inspection. It can be useful to take photos and be as specific as possible.

Form a good relationship with your property manager/landlord

Communication is key to being a good tenant. If there is something on the property that needs attention, make sure to tell the agent sooner rather than later. Building a good relationship with the property manager or landlord and having open honest communication will ease pressure on both parties when it comes to you vacating the property.

Know your obligations as a tenant

Stay educated with the law surrounding your tenancy. This will lower your chances of being short-sighted with any unexpected issues down the track.

You can visit The Department of Mines, Industry Regulation and Safety website for more information on the laws affecting tenants.

Clean as you go

It might seem obvious, but you’d be surprised at what the result of leaving the drain untouched or not vacuuming under the couch during the length of your tenancy could be. By regularly cleaning your house, you lower the risks of growing mould, stains or lingering smells. If you have carpets, maintaining them is also important as replacing carpet can cost a fortune if stained or damaged.

Understand the bond refund process

Again, knowing what to expect will save you from any unwanted surprises when it comes to getting your bond back. Understanding the process will make things easier for both you, the real estate agent and the landlord.

In the event of an unresolved dispute, the courts will ultimately decide the allocation of bond monies.

If you make every effort to return the property to the owner in the best possible manner at the end of the tenancy, you are in a good position to have your bond refunded in full.

If you have a query about your rental bond or tenancy agreement, speak with your REIWA property manager or call the REIWA Information Service on 9380 8200.