Sydney Property Investor

Despite property values dropping across the country in the first
quarter of the year, rental yields are on the rise.

According to the latest RP Data figures, Hobart was the only
capital to record a decline in rental growth.

Tim Lawless, research director at RP Data said detached housing was
the big winner.

“While April’s values reduce across most capital cities, rents
continued to show modest improvements. At the combined capital city
level, the weekly rent on a detached house is up by 4.1 per cent
over the year to April and unit rents are up by 3.7 per cent,” Mr
Lawless said.

Growth in rents has been varied across the country with the largest
increases in Perth where weekly rents have surged by more than 14
per cent over the year. Smaller rental increases were recorded
across
Sydney,
Brisbane,
Darwin and
Canberra.

Rents in
Melbourne and
Adelaide were reasonably flat while Hobart went backwards by
3.9 per cent over the year.

According to RP Data, higher rents and lower home values are
contributing to higher rental yields. The average capital city
house is now returning a gross yield of 4.2 per cent, up from a low
of 3.6 per cent just over a year ago.

Units, which typically provide a higher rental return, are
providing a gross yield of 4.9 per cent, up from a low of 4.4 per
cent.

Source: REB online

Property Management Sydney

Technorati Tags: across, AUSTRALIA, felt, growth, Rental

Delayed infrastructure roll-outs, time-consuming planning processes
and increasing charges of levies for new housing is constraining
land supply across the country putting considerable pressure on
housing affordability.

The Urban
Development Institute of Australia (UDIA), released its
annual State of the Land Report in March
which provides the most comprehensive assessment of land supply
in Australia’s capital cities.

UDIA is the peak industry body for the urban development industry
and its 2012 State of the Land Report highlights the insufficient
levels of land supply in Australia’s major cities.

UDIA National President Julie Katz said that, “Releasing a steady
stream of serviced land to the market is critical if we are to
overcome our affordability and housing supply challenges”.

“The report makes a strong correlation between historically low
levels of lot production and higher land prices, the net effect of
which is declining levels of affordable housing,” said Ms Katz.

“While the barriers to supply vary from state to state, there are
commonalities nationwide. For one, the roll out of infrastructure
is delayed in most jurisdictions and is holding up vast areas of
developable land.

“In addition, planning approval processes throughout Australia are
characterised by delays and uncertainty. Another common barrier in
most jurisdictions is ever-increasing infrastructure charges or
homebuyer levies, which are adding to the cost base of developments
and rendering many projects too expensive to pursue.”

According to the report,
Sydney continues to experience a chronic undersupply of
serviceable land, with forecast data showing it producing the
least lots in the country.

The supply of land is spiraling downwards in
Brisbane, with the city producing its lowest level of lots in
a decade.
Perth has experienced a slight increase in lots produced,
while
Adelaide and
Melbourne have performed relatively well. However, none of
the capital cities are well placed for a potential surge in
demand.

UDIA’s recommendations to solve the problem

1)      Federal and State Governments
should provide more funding to Local Governments and relevant state
agencies for the financing of local infrastructure.

2)      Each State Government should
create a body to coordinate and monitor the timely, efficient and
coordinated roll-out of infrastructure in both greenfield and
infill developments.

3)      State and Territory planning
systems should be made consistent with COAG’s nine criteria for
future strategic planning of capital cities.

4)      Through the identification of
leading practice, State Governments should encourage local councils
and relevant state agencies to reform the processes involved in
assessing applications for development.

Source: Aussie

Property Management Sydney

Technorati Tags: across, Chronic, land, states, supply

Australia’s luxury suburbs, coastal strips and flood regions have
been hardest hit as median values plummeted in a skittish market by
up to 46 per cent last year, according to RP Data figures.

Even the nation’s most expensive suburb
Point Piper has fallen victim to the squeeze, with the median
price of units sliding 37 per cent to $ 1.17 million, in the 12
months to December.

Vendors were also forced to cut prices by almost a quarter in
premium postcodes including
Surfers Paradise on the
Gold Coast and Western Australia’s millionaire’s row

Peppermint Grove.

Scroll down for top 10 worst hit areas

RP Data senior research analyst Cameron Kusher said buyers were
still smarting from the 2008 global financial crisis, with share
market hits and other personal financial losses weighing heavily on
wealthy Australians and retirees.

“Since the GFC people aren’t moving around as much to those once
popular sea change and tree change areas,” Mr Kusher said. “They’ve
lost a lot of money and are rebuilding their wealth.”

The areas with the top 10 price falls of the year feature four tree
and sea change spots including Mittagong in the New South Wales
Southern Highlands and Golden Beach in Victoria.

But it is homeowners in flood-affected
North Booval – a suburb of
Ipswich near
Brisbane – who have suffered the country’s worst falls, with
houses dropping by 46.3 per cent to $ 154,000.

Mr Kusher conceded some homes in Ipswich’s flood-hit areas were
unsaleable but said buyers had “short memories” when it came to
natural disasters.

“If you cut the price enough, any property will sell and if it
doesn’t flood for another five years buying activity will return to
those areas,” he said.

While prices dipped in the towns affected by the Victoria bushfires
and Cyclone Larry in North Queensland, sales volume and prices
picked up within 12 months, he said.

Mr Kusher said property prices had also been reined-in by slower
interstate migration, particularly in Queensland, NSW and Victoria.

However, Australian Property Monitors senior economist Dr Andrew
Wilson said in the capital cities the property gloom was lifting.

Dr Wilson pointed to higher auction clearance rates, and an
improvement in finance commitments, particularly in Queensland, NSW
and WA.

“Perth
and Brisbane remain on track for a recovery in median house prices
this year with healthy increases in buyer activity from the low
levels of 2011,” he said.

“Sydney
and
Canberra should provide the usual solid results over the year
reflecting the chronic underlying shortage of accommodation in
those centres.”

He believes buyers may remain cautious in
Melbourne – with the local economy set to struggle in 2012 -
while sales are expected to lift in
Adelaide.

Although somewhat volatile, Darwin should also finish 2012 with
encouraging housing market results, Dr Wilson says.

Resources would continue to help some regions – particularly in
central Queensland.

“The Gold Coast may also surprise while Newcastle and Orange in New
South Wales and the Macedon Ranges region of Victoria should
continue to attract significant buyer interest.

Top 10 median price drops in percentage terms for
2011

1. North Booval (QLD) -46.3% (houses) to $ 154,000
2. Mittaggong (NSW) -45.1% (units) to $ 225,000
3. Jolimont (WA) -44.4% (units) to $ 342,000
4. Carey Bay (NSW) -42.6% (houses) to $ 266,001 
5.
St Kilda West (VIC) -41.8% (houses) to $ 1,455,000 
6. Port Augusta (SA) -41.5% (units) to $ 120,000 
7. Golden Beach (VIC) -40.9% (houses) to $ 85,750 
8. Rainbow Beach (QLD) -40.8% (units) to $ 219,750
9.
Acacia Ridge (QLD) -40.8% (units) to $ 298,500
10.
Eagle Farm (QLD) -40.4% (units) to $ 786,500

Source: RP Data

Property Management Sydney

Technorati Tags: 'Worst, Areas, battered, Prices, property, Revealed

Most people who have any interest in the housing market will
appreciate that the performance of home values can vary broadly
based on a range of factors. Geographically, for example, we have
seen
Darwin values rise by more than 8 percent over the first
eight months of the year while
Melbourne values have fallen by 2.6 percent over the same
time frame.   Across the broad housing types there are
differences as well, with unit markets generally showing stronger
conditions compared with the detached housing market.

We are also seeing significant differences across price segments in
the market with the most expensive housing markets generally
underperforming compared with the more affordable markets. 
Across the combined capital cities, the most expensive twenty
percent of suburbs have seen values fall by -8.5 percent since the
market peak compared with a -4.0 percent fall across the most
affordable twenty percent of suburbs and a -4.4 percent fall across
the broad middle 60 percent of suburbs.

As can be seen from the graph above, the most expensive markets
have outperformed the broader capital city average during the
growth phases but underperformed during the corrections.  Over
the past five years the annual rate of growth across the most
expensive segment of the market has been just 1.7 percent per annum
compared with a growth rate of 2.9 percent per annum across the
most affordably priced suburbs and 3.3 percent per annum across the
broad middle priced suburbs.

The trends across the price segments aren’t uniform across all of
the capital cities. 
Brisbane and
Adelaide are showing the opposite performance, with the more
expensive price segments of the market returning a better result
for dwelling values compared with the more affordable priced
suburbs.  This is interesting in the sense that Adelaide and
Brisbane are also the most affordable mainland capital cities to
be buying in (Adelaide’s median dwelling price is $ 371,500 and
Brisbane’s is $ 405,000).  The weaker performance in these
markets can be linked with mortgage repayment pressures being
felt across the mortgage belts of both these cities, particularly
in South East Queensland where many of the most affordable
suburbs in the region have shown a higher than average level of
mortgage arrears.

The performance across price segments highlights why it is so
important to drill down below the capital city boundaries in order
to truly understand housing market conditions.  Prospective
home buyers and sellers should be looking at the dynamic of the
housing market from a localised perspective ensuring they are in
tune with market conditions at both the macro and micro
level.  There are bound to be significant differences in how
markets are performing.

Source: RP Data

Property Management Sydney

Technorati Tags: Getting, Housing, market', rich, richer

The Reserve Bank released their September quarter Bulletin this
week (here) which included a superb article
outlining their research around supply side constraints across the
capital cities of Australia.  The report identifies four
factors that are impediments to a responsive housing supply across
the country:

• Complexity of the planning process which
  can create uncertainty, lengthy delays and risk for developers
  as well as significantly increase costs for developers.
• Provision and funding of infrastructure –
  gone are the days of the Government funding the costs of roads,
  utilities and community services out of the tax base.  The
  report states “developers often fund at least half of new
  utility and transport infrastructure in
  Sydney,
  Brisbane,
  Perth and
  Adelaide”.  Often the costs fronted by developers are
  negotiated across each project providing an uneven playing
  field and planning uncertainty.
• Land ownership and geographical
  constraints – fragmented land ownership across
  infill and greenfield locations makes it difficult for
  developers to identify and acquire sites that are appropriate
  for large scale development.  Additionally the geographic
  constraints such as the large tracts of national park north and
  south of Sydney are identified in the report.
• Public attitudes towards infill
  development – the report specifically comments on
  infill developments being subject to community opposition which
  can result in non-approval, restrictions on development
  approval and a loss of project viability.

One of the most revealing tables in the report compares the costs
of greenfield development across each of the major capital
cities.  Indicative costs for developing a greenfield site in
Sydney are more than three and half times what it costs in

Melbourne.  The imbalance in development charges
provides a distinct insight about why new development has been so
lack lustre in Sydney while at the same new housing supply has
been very sufficient in Melbourne.

The report is timely in the sense that the ABS also released their
June quarter dwelling commencements data which showed that, despite
a 4.6 percent rise in dwelling commencements over the quarter
(which was driven by a spike in the volatile ‘other’ sector which
generally refers to apartments), new dwelling starts were down 10.8
percent over the year.

The graph below, which tracks annual dwelling starts versus the
annual change in population growth clearly highlights the lack of
any response in housing supply to surging population growth between
2004 and 2008.  In fact, as population growth (read ‘housing
demand’) surged new housing starts were trending downwards.
 More recently we are once again seeing population growth
ramping up at a time when new dwelling construction remains weak.

The third graph from the RBA report highlights how a comparably low
cost and reasonably efficient land release strategy played out for
Melbourne.  Despite recording similar rates of population
growth between Sydney and Melbourne, the number of land parcels
released in Melbourne has been more than double what has been
recorded in Sydney.

The RBA authors of the report summarise their findings like this:

“Given the difficulties involved in satisfying the large number of
stakeholders involved in the housing supply process, it is likely
that these important issues will remain on the policy agenda for
some time.”

I couldn’t agree more.  Developing land in Australia is
currently a tough gig it seems, and with most state governments
looking to bolster their budgets it is hard to imagine any
resolution to issues like infrastructure charges and levies any
time soon.  From another perspective, attracting population
growth means that development needs to be facilitated (if not
encouraged) by all levels of government.  A larger taxation
base has got to be a positive for most state governments at the
moment given their financial positions.

Source: RP Data

Property Management Sydney

Technorati Tags: Australia’s, Four, hasn’t, Housing, reasons, responded, sector, todemand

At the end of the property boom in late 2010, a three-bedroom singe
storey cottage facing the waterfront on The Esplanade in

Mosman sold for $ 3.25 million. Two years later in April this
year, it was on the market again. This time the property, which
came with a pre-approved development application, fetched
$ 3,025,000 – a discount for the new owner of $ 225,000.

On the other side of Port Jackson in Wilfield Avenue in
Vaucluse, a plush four-bedroom home went for $ 2.9 million in
2010. Last June it was resold for $ 2,550,000.

On the other side of the city, also in 2010, an ordinary-looking
brick house in
Blakehurst, a suburb south of
Sydney Airport, sold for $ 880,000.

Twenty months later, in May this year, it was on the market again.
This time the Californian bungalow fetched $ 850,000, a discount of
$ 30,000 for the new owner.

These homes illustrate the change in market conditions confronting
spring vendors and buyers.

Home hunters are faced with purchasing in a market where prices
have softened for the past two years and sellers are questioning
whether it is the right time to put a hoarding out in front of the
family residence.

A swag of reports released this week suggest Australia’s
residential property market is still vulnerable to global economic
conditions and wary, downbeat consumers.

Buyer interest remains soft, sales activity is at historically low
levels and the stock of unsold homes at near-record highs, the
ANZ’s Australian Property Outlook says.

High-profile business failures, insolvencies and job cuts have
heightened concerns over job security in many areas, prompting
households to focus on paying off debt, it says.

Darwin is the only capital city where house prices have risen
over the past two years, says SQM Research’s Housing
Boom and Bust report.
Melbourne suffered the most pain over the same period,
recording a 3.8 per cent fall in values over two years to June
this year, SQM says.

Falling prices have removed the urgency for first-home buyers to
jump into the market and dampened investors’ enthusiasm for
property, two key home-buying groups.

For an industry that relies on glossy brochures, sparkling
picture-perfect homes and smooth-talking estate agents to sell
houses, it’s not the kind of assessment many want to hear.

”Everyone is doing it tough, there’s no question about it,” says
Mike McCarthy, the head of one of Melbourne’s largest real estate
franchises, Barry Plant.

His views are echoed by a Sydney buyer advocate, Patrick Bright. ”I
can’t remember it being as tough as this to transact,” he says,
pointing to the fact that sales volumes are at 15-year lows.

Melbourne, too, is suffering a sales slump. Figures from the Valuer
General show metropolitan home sales fell to a 15-year low in 2011.

Preliminary figures suggest total sales will fall further this
year, marking a new low.

But even before the Melbourne Storm take on the Canterbury Bulldogs
and the Sydney Swans battle the Hawks this weekend, there’s a clear
winner between the two cities.

Off the field in the leafy suburban streets where homes are being
auctioned or sold privately in the spring sunshine, by some key
indicators Sydney is out-performing Melbourne.

”Following modest price declines earlier in the year there is some
evidence that the Sydney housing market is stabilising,” the ANZ
reports.

Sydney’s acute housing shortage appears to be propping up rents and
prices. Rental vacancy rates are low and likely to contract; at
last count they were 1.6 per cent, and returns rose 5 per cent over
the year to June, according to SQM.

Median rents now sit at $ 420 for a three-bedroom home.

By contrast, Melbourne’s vacancy rates are on the way up, beyond
their present level of 2.3 per cent. And over the past year, the
city has had almost no rental income growth.

The difference is also evident in trendsetting suburbs.

Median house prices in Sydney’s chic inner-city
Chippendale rose 19 per cent over the past year to $ 905,000,
whereas values in up-and-coming
Brunswick in Melbourne fell nearly 7 per cent to $ 633,000,
according to the property analysts RP Data.

With auction clearance rates consistently staying above 60 per
cent, there is a tangible spring buzz in Sydney. Olympian Matt
Shirvington will be hoping that energy plays in his favour after
listing his 1897 home in Canrobert Street, Mosman, for auction next
week.

Shirvington bought the property for a bullish $ 2.5 million in 2008.

”Anything that’s priced around the median price for a particular
suburb is selling,” says the buyer advocate Bright. However, once a
vendor lists their house for 20 to 30 per cent above the median
price for their suburb, buyers thin out and activity slows, he
says.

One project to ride the recent lift in energy was the $ 440 million
redevelopment of the Swiss Grand Hotel in
Bondi. All but two of the 76 apartments in the first release
in the Pacific development sold on the opening weekend earlier
this month. The sale also got property players at the prestige
end speculating the slump was over.

One buyer is now doing due diligence on buying two off-the-plan
penthouses in the development and merging them into one apartment,
said CBRE’s Justin Brown.

”If that occurs, it will break the Australian record for a single
apartment and be well over the $ 20 million price range,” he said.

After two ordinary years, the prestige market in Sydney is gaining
some confidence, the veteran agent Bill Malouf believes.

More properties were selling during the marketing period, rather
than three months after the initial campaign, he said.

”I think the general public has realised they’re not going to get
flooded with a whole lot of stock.”

But high-end homes were still selling at a discount. LJ Hooker is
asking for $ 8 million for a palatial
Point Piper apartment that previously sold for $ 8.5 million.

While Sydney’s residential construction industry suffocated under
restrictive planning policies and land shortages over the past
decade, population and price pressures super-charged Melbourne’s
apartment and new home market.

That boom is now unwinding.

The scrapping of first-home buyer grants and falling immigration
has resulted in land sales plummeting and high-rise projects coming
off the boil.

”Whilst there is a glut of stock, it’s dead stock,” McCarthy says.

”The problem is there’s not enough new stock coming on. We’re
actually selling all we can get our hands on in terms of new stock
- there’s just not enough of it.”

Both Sydney and Melbourne are unlikely to see any super Saturday
auction weekends this year, when more than 1000 properties go under
the hammer, a common feature of booms.

This week, both cities’ year-to-date clearance rates (the
proportion of homes sold at auction) equalised at 60 per cent, well
up for both on last year’s performance.

”Consumers are still sitting on the sidelines waiting. The market
in some respects is in a bit of a holding pattern,” says Robert
Larocca from the Real Estate Institute of Victoria.

That won’t matter this weekend, as auctions stall in both cities as
punters transfix on the AFL and NRL grand finals. But it will be a
factor in following months.

There is a strong risk that with fewer homes selling and many
first-home buyers and investors sitting on their hands, Australia’s
big banks will be tempted to lower their mortgage benchmarks as
they slug it out to attract customers and take market share from
rivals.

That’s a scenario the Reserve Bank appears keen to head off, before
a possible cut in official interest rates on Tuesday.

The markets are factoring in a 66 per cent chance of a rate cut ,
and four more to follow by this time next year.

In uncharacteristically forthright language, the Reserve
Bank’s Financial Stability Review this week
warned banks against the lure of relaxing standards.

”With demand for credit likely to remain moderate, a challenge for
firms in a competitive banking environment will be to resist the
pressure to ease lending standards … in the pursuit of unrealistic
profit expectations,” it said.

But the Reserve was less concerned with the flip side of fewer home
hunters taking on new mortgages, and our continued obsession with
thrift and paying off debt.

The ”consolidation of household balance sheets” was ”desirable” for
financial stability and would make indebted households better able
to cope with any future income shock or fall in house prices, the
Reserve Bank said.

Households are going to ”keep on correcting their debt levels
downwards for some time,” says Kim Hawtrey, a director with the
economic forecaster BIS Shrapnel.

People are going to be ”relatively unresponsive to interest rates
cuts” compared with previous times when the Reserve slashed
interest rates. Any pick-up in home buyers’ responding to a rate
cut ”will take longer and be somewhat muted” because of Australia’s
economic situation, Hawtrey says.

That wariness is obvious among buyers, Bright says.

People have stopped stretching themselves, he maintains.

”Instead of borrowing up to their eyeballs, they’re coming in with
bigger deposits.”

According to the Reserve Bank, which recently quizzed the major
banks about the health of their loans, 15 per cent of borrowers are
ahead on their mortgages by two years or more.

”Many borrowers still have sizeable buffers,” the Reserve said.

In NSW, the number of forced home sales by mortgagees is averaging
213 a month. That figure is well above last year’s monthly average
but below its peak in 2010, when borrowers were really stretching
themselves.

Repossession numbers are murkier in Melbourne, Supreme Court
figures show.

House and land repossessions peaked at 2051 in June, higher than
preceding years.

A surprising number of home owners who purchased a property in
2009-10 may well be in a situation of negative equity, said a buyer
advocate who is based in Melbourne, Paul Osborne.

”This would be compounded by the further out the property is from
the city centre – or if the property is, say, a brand-new
apartment,” Osborne said. Some of the largest falls in resales
since 2010 have occurred in Melbourne’s leafy eastern suburbs, he
said.

The struggle to stay on top of mortgage repayments is showing up in
well-to-do localities.

A week ago, the blue-chip
Woollahra home of Sydney couple Belinda Tassone and Nick
Leach, the former chairman of the failed airline OzJet and the
firm HeavyLift, sold in a mortgagee auction for $ 5 million.

The Tassone family purchased the property in 2004 for $ 6.15
million. It was first listed in March with price expectations of
$ 13 million.

Last Saturday a house in the popular bayside suburb of Port
Melbourne was snapped up for $ 845,000 after a mortgagee auction.

The single-fronted weatherboard cottage on Farrell Street was
purchased in February by the now bankrupted owner for $ 912,500.

Earlier that morning, the couple who bought the property had missed
out on a similar home around the corner on Clarke Street that sold
at auction for $ 1.025 million.

In Melbourne, buyers were more inclined to ”wheel and deal” after
auction than bid during it, in the hope of getting a better deal, a
buyer advocate, Frank Valentic, says.

Vendors were still struggling to understand that the market has
changed and were not setting reserves that resulted in sales, says
a veteran Melbourne real estate agent, Iain Carmichael.

Home sales were now being driven by family choices around schools,
people relocating for work or couples upsizing or downsizing,
rather than opportunism.

”That’s what a market should be about. It was just that it was so
unreal for so long,” Carmichael says.

”Previously you’d get vendors saying, ‘crikey, our house is now
worth so much more, we’d better sell’. Now they’re saying, ‘we’ll
just sit tight.”’

There was some evidence that consumers had become more positive in
the past month, but ”you need several months of that before you can
call it a trend,” Hawtrey said.

”There are green shoots coming through the concrete but you can’t
see the whole field growing again,” he believes.

In the present property market, baby boomers were in a particularly
awkward situation, according to Bright.

Those wanting to downsize had typically owned their sizeable family
home in a nice suburb for the past 30 years.

As well as having their super docked by falls in equity markets,
they were looking to sell at a time when the higher end of the
market was weaker and the lower end stronger.

”If you’re downsizing, you’re selling at a bigger discount than you
are buying at,” he says.

The biggest future threat to the property market will be the mining
downturn and its impact on trade, SQM’s Louis Christopher
maintains.

Despite that, Christopher predicts the remainder of 2012 and 2013
is likely to see a recovery in home prices.

”The recovery will initially be modest, but at some point it may
well accelerate … Our opinion is that this will occur in Sydney and
Darwin,” he says.

The Housing Boom and Bust report flags the top
20 fastest income growth suburbs as potential future hot spots.

Localities such as
Waterloo,
Redfern and
Darlinghurst feature in Sydney. Several, including
Fremantle, Jerdacuttup and Kings Park in Western Australia
are mentioned.
Fortitude Valley and
New Farm are pinpointed in
Brisbane.

However, no suburbs are mentioned for Melbourne.

High income growth is usually the main contributor to property
prices, Christopher says.

”The demand for housing in these areas has put an upward pressure
on house prices as the supply of housing in the inner ring
localities is commonly restricted.”

The ANZ’s property report also backs a recovery in the Northern
Territory and WA, where house prices may be ”reaching a floor”.

Housing in Sydney is at its most affordable (excluding the global
financial crisis period) since 2001, ANZ says.

”The dynamic of rising rents along with improved purchase
affordability should encourage both first home buyers and investors
into the purchasing market,” it suggests.

But prices in states with weaker economies –
Hobart, Melbourne and
Canberra in particular – ”remain susceptible to further
falls,” the bank says.

So should home hunters buy now?

”I get asked all the time, ‘Should I hold out? When should I buy?”’
Bright says. ”If you’re buying with a medium- to long-term outlook
- get on with it.

”If you’re buying and selling in the same market conditions, it’s
irrelevant whether the market has hit bottom or not.”

Source: Brisbane Times

Property Management Sydney

Technorati Tags: desperate, Markets, property, revival, Spring

In real estate there is no truer commodity than vacant land. 
Houses and units inherently show a qualitative bias; the value of a
house or unit is influenced by various factors such as the size of
the home, the state of repair, the architecture, the attributes of
the home such as number of bedrooms and bathrooms and whether the
home has value added components such as a swimming pool or shed.

The value of vacant land, on the other hand, is primarily
influenced by geographic context and land area.  Sure there
are other factors which can affect land value such as the council
zoning and the shape of the land parcel, however compared with a
dwelling it is much easier to quantify and compare land values
across regions.

A simple way to do this is to use median land prices, however a
median land price only shows the typical price for which a block of
land sells; this measure takes no account of how big or small the
block of land is.  A much better way to measure the value of
land is based on a rate per square metre.

To illustrate this point, using the median land price measure shows

Sydney to be the most expensive land market in the
nation.  Based on sales over the past twelve months, the
typical block of land in Sydney sold for $ 283,500.

Using a rate per square meter measure it is a different
story.  On this basis,
Perth is the most expensive vacant land market with the
typical vacant block selling at the rate of $ 555 per square
metre.  Sydney is the second most expensive market at $ 547
per square metre and somewhat surprisingly,
Adelaide is the third most expensive at $ 486 per square meter
(despite having the second most affordable median sale price).

The difference really comes down to the size of the blocks being
sold. The median land area for vacant land sales in Adelaide is the
smallest of any capital city at just 375sqm.    So…
despite being the most affordable mainland capital city based on
median prices, on a rate per square metre basis, Adelaide land is
actually relatively expensive.

Conversely, the most densely populated capital city, Sydney, still
has the third largest median land area across the major capitals at
544sqm.

From a development perspective, why not reduce the typical land
area to maximise the development yield and improve housing
affordability.  The reason probably comes back to the
constraints of council zoning and town planning regulations.

The small lot sizes in Adelaide may come as a surprise, however the
production and development of small lots is likely to become more
evident across the other capital cities over time and is partly due
to a state government program whereby developers have to include a
proportion of affordable housing within most new
developments.  Smaller lots and smarter housing design is a
fairly straight forward mechanism to combat housing affordability
and to improve density around primary working nodes and transport
corridors.  The trend towards smaller lots is evident across
all of the capital cities but not to the same extent as what small
lot housing has been embraced in Adelaide.  The important part
of shrinking lot sizes to make housing more affordable is to ensure
that there are enough parks and recreational facilities close by to
cater to the needs of those home owners.

Source: RP Data

Property Management Sydney

Technorati Tags: city, expensive, land, most

Buying a home can be an emotional rollercoaster.
 Despite a great feeling of satisfaction when we succeed in
purchasing a property, we can often feel sapped of time, money and
energy.

With Real Estate Agents negotiating and fighting for the seller,
many homebuyers are left feeling as though the odds are against
them in the real estate world.

However, what many home buyers don’t realise is that there are
agents willing to work for them too.

A buyer’s agent/advocate is the opposite of a selling agent,
working for home buyers. Their job is to help buyers find the right
property for their needs, at the right price, on the right terms
and with unbiased advice. They are licensed real estate
agents that specialise in searching, evaluating and
negotiating.

Buyer’s agents usually charge a registration and success fee, but
when a dream property has been successfully negotiated and
purchased on your behalf, it is often well worth it especially if
you are short of time.

Using a Buyer’s Agent could help you to:

Save money

• With extensive experience and knowledge of the market, a
  Buyer’s Agent knows what’s out there.

Reduce stress

• Buying a home or investment property is a daunting process and
  can often leave us feeling stressed out and exhausted. A buyer’s
  agent’s job is to make the house buying process as easy as
  possible.

Save time

• Spending all day Saturday viewing properties is never fun.
  Using a buyers’ agent will save you time and give you back your
  weekends.

Increase your options

• Buyer’s agents come with a number of industry contacts and
  access to “off market sales” that you may never find out about.

Level the playing field

• Sellers have selling agents on their side, now you have a
  buyer’s agent on your side!

Remember that not all Buyers’ Agents are the same. It can be
prudent to ask them the following questions before engaging their
services:

• Are you a fully licensed real estate agent?
• Do you specialise in the location and price range I am
  looking at?
• Are you a member of the state REIA?
• Are you professional indemnity insurance compliant with current
  legislation and professional association requirements.
• Are you a dedicated buyers’ agent?

If they can answer each of these questions with a simple yes, then
you may have just discovered your house hunting secret weapon!

Source: Aussie

Property Management Sydney

Technorati Tags: Agent, Buying, House, Secret, Weapon

Julia Gillard has renewed her push to cut company tax rates and
taken aim at the states’ stamp duties on home purchases, at the
launch of the government’s economic forum in
Brisbane.

Opening the forum, the Prime Minister asked delegates to focus on
how the nation could improve its competitiveness and increase
labour mobility to ensure that Australian workers filled more of
the jobs created by the resources boom.

She made it clear that despite scrapping her promise to lower
company taxes, Labor would revive it if it had support from other
parties. The tax cut was abandoned after the Liberals refused to
support it and the Greens insisted it be restricted to small
business.

”I’ve got no doubt the company tax rate should be lower – and no
doubt the revenue base has to be maintained as well,” Ms Gillard
said.

She linked the issue of labour shortages in the mining sector to
stamp duties on real estate transactions, saying: ”We’ve got to
talk about labour mobility … We’ve got to crack this nut.

”We’ve worked on national licensing of professions and trades and
on incentives for welfare to work, and now we’re turning attention
to more improvements to jobs services, and to issues like state
transaction taxes on property as well.”

Abolishing stamp duties on conveyancing would be popular with home
buyers, who fork out $ 23,500 in tax to buy an average $ 500,000

Melbourne home. But in most of Australia, it is the third
biggest source of state revenue. Victoria relies on it to fund
$ 3.5 billion a year of spending.

The ACT government last week began a 20-year phasing out of stamp
duties, which it will

replace with higher property rates. The states’ choices would be to
increase the GST – which the Gillard government has ruled out – or
raise land taxes, as the Henry tax review urged.

Critics point out, however, that the mining boom has had to be
manned by fly-in, fly-out workers because Australians prefer to
stay with their friends and families.

At the opening dinner, Treasurer Wayne Swan called on the 150
delegates from business, unions, governments and community groups
to focus on improving productivity in service industries, so that
they become the suppliers of choice for Asia’s rapidly-growing
middle class.

He urged Australians to put down partisan views and start ”a mature
debate about productivity” with the aim of lifting Australia into
the world’s top 10.

The opening session of the forum focused on the importance of Asia
to Australia’s economic future – but also on the reforms needed if
Australia is to maximise its gains from Asia’s phenomenal growth.

Five sessions today, mostly behind closed doors, will debate the
problems of the patchwork economy and the high dollar; innovation
and collaboration in industry; investing in infrastructure;
building skills and education; and deregulation and reform of
competition policy.

 

Mr Swan announced that he would lead a business delegation to China
and Hong Kong next month, to celebrate the 40th anniversary of
diplomatic relations between China and Australia, and give
Australia’s business leaders ”an opportunity to develop business
links with major Chinese companies and authorities”.

Mr Swan said he welcomed debate on productivity, but some claims
being made ”were not grounded in facts”. He struck a John Howard
stance, telling business leaders: ”The challenges and opportunities
of the Asian century are bigger than the day- to-day cut and thrust
of our political debate. They’re bigger than any partisan divide.”

But his appeal for bipartisanship fell on deaf ears. Ted Baillieu
is the only Liberal premier to attend the event, and Opposition
Leader Tony Abbott dismissed it as ”a carefully-scripted,
choreographed event”.

”She [Ms Gillard] is not interested in changing policies. She’s
just interested in stifling criticism,” Mr Abbott said.

Source: Brisbane Times

Property Management Sydney

Technorati Tags: duty, Gillard, over, stamp, states, takes

THE number of people taking out home loans with non-bank lenders is
creeping up, a trend the government says shows banking competition
is increasing.

Federal Treasurer Wayne Swan has promoted non-bank lenders as a
”fifth pillar” of the financial system since the big four banks
grabbed a dominant market share in the global financial crisis.

Amid fierce political and media scrutiny of interest rate changes,
the latest figures show a small but growing number of customers are
turning to non-bank lenders.

Their share of new owner-occupied home loans by value in April was
the highest in more than a year, at 8.85 per cent, Bureau of
Statistics figures show.

This is still well below the 14 per cent market share that
non-banks had before the global financial crisis. But in the year
to April small banks expanded their lending twice as quickly as the
big banks.

Mr Swan said this growth, alongside non-banks taking a larger slice
of the deposit market, showed the government’s banking competition
changes of late 2010 were working.

”It’s all about putting the power back in the hands of Australian
families so that if they don’t like the decision that their bank
makes, they can just walk down the road and get a better deal,” he
said.

The changes included a ban on exit fees, which came into force in
July last year. It is estimated that since then 560,000 mortgages
have been written free of exit fees.

Despite the small increase in non-bank lenders’ share, the Mortgage
and Finance Association of Australia, which represents mortgage
brokers, says the ban on exit fees has done little for competition.

Group chief executive Phil Naylor dismissed recent rises in
non-banks’ market share as insufficient to put more heat on the
majors. ”It clearly hasn’t made any significant impact on their
market share,” Mr Naylor said.

But mortgage broker AFG said competition was increasing, with small
banks and non-bank lenders taking a bigger share among new home
buyers.

It said that in recent months non-major lenders had written up to
29 per cent of loans to first home buyers, compared with 22 per
cent a year ago.

”Non-major banks have a disproportionate share of first home buyer
business and that’s probably because first home buyers tend to be a
bit younger, they tend to be a bit more open to other ideas,” said
AFG’s general manager of sales and operations, Mark Hewitt.

From next month, people will be able to change deposit accounts by
filling out a single form, a change the government says will take
the difficulty out of switching banks.

Source: Brisbane Times

Property Management Sydney

Technorati Tags: buyers, Loans, More, nonbank, turn