State and Federal Government costs
Purchase stamp duty
Property transfer stamp duty is a state government tax
payable by the buyer and is calculated on the price paid for
the property. Because it is a duty for transferring the title of
a property, it will be imposed whether or not the purchase
is financed with a mortgage. First home buyers may be
eligible for significant rebates on stamp duty.
• Property transfer fee
This is a state government charge to register the transfer of
title of the property from one person to another. Some
states and territories may charge a set fee, while others are
on a sliding scale.
• Mortgage stamp duty
In some states, stamp duty is payable on the mortgage,
calculated on the amount of the loan. This is a state government
tax and may vary depending on the state / territory.
• Mortgage registration fee
This is an administrative charge imposed by the Land Titles
Office (or equivalent) in each state / territory for entering
(registering) the lender’s mortgage on to the title record for
the property. The fee differs from state to state and ranges
from around $85 to $125 per registration. The borrower
pays this cost.
Loan Application costs
• Lender’s Mortgage Insurance (LMI)
Lender’s Mortgage Insurance (LMI) insures the lender
against any loss incurred if the borrower defaults and the
net proceeds of an enforced sale of the security property
are insufficient to clear the debt. Note that Lender’s
Mortgage Insurance covers the lender, not the borrower.
LMI may be added to your final home loan amount
(depending on the lender.) It should not be confused with
Mortgage Protection Insurance, which covers the mortgage
repayment for the borrower in the event of death, disability,
illness or involuntary unemployment etc.
• Loan application fee
To start the process of obtaining a loan, the borrower may
have to pay an application or loan establishment fee. The
cost can vary depending on loan type, lender, security and
loan splits. In most cases, the fee includes the cost of the
first valuation. The cost of additional valuations ranges from
$150 - $250. A few lenders may ask for an upfront
payment to cover costs.
Purchase costs
• Conveyancing / solicitors fees
This is the fee charged by the conveyancer or solicitor to
carry out the legal work involved in purchasing real estate.
Be sure to ask about the costs of searches, settlements
and disbursements.
• Pest / building inspections
Prudent home buyers will arrange for inspections of a
prospective property by qualified inspectors before
exchanging contracts. The inspections ensure that the
property is not affected by insect infestations and that it is
structurally sound and complies with building regulations.
The cost of inspections is payable by the property buyer.
Note that lenders may make satisfactory inspections a
condition of loan approval if doubts exist about the
condition of the property.
• Insurance
As a condition of loan settlement, lenders will impose a
condition that all security properties are covered under a
building insurance policy. The amount of the policy
coverage required will be the deemed full insurable value of
the dwelling, which protects the borrower (and the lender’s
interests) in the event that the dwelling is damaged by fire
or some other catastrophe. The insurance policy premium
cost is paid by the borrower and the lender’s full name will
be noted on the policy as mortgagee. Building insurance is
not required for strata-titled properties; in these instances,
the lender will require evidence that the body corporate has
taken a policy for the entire block. In Queensland,
insurance is required from 5.00pm on the day following the
signing of the contract.
Construction costs
• Construction loans
Construction loans normally represent more work for the
lender due to the way they are progressively funded during
the construction period. Some lenders will simply add an
additional construction loan fee, while others will charge a
progress payment fee each time the builder asks for a
payment. On top of this, you may also be charged an
inspection fee for a valuer to inspect the property to ensure
the building is in the state the builder is claiming. A normal
construction would have four to five progress payments
and two inspections.
• Site costs and service connection costs
Check your building contract carefully and, if possible,
make sure it includes fixed site costs and connection of
services. Many people assume site costs are included in
the contract, but this is not always the case. Unexpected
events, such as hitting rock or the need to build retaining
walls, can add thousands to the site costs.
The same applies to the connection of services such as
power, water, and phones. Many providers only allow for
5-10 metres for connection from the street to the house
and will charge extra for distances which exceeds this. The
standard service connection may be fine for a standard
residential block but can be an unexpected cost for a large
rural block.
Wednesday, September 29, 2010
Thursday, September 23, 2010
Monday, September 20, 2010
What are the main methods used to sell property in WA?
Hay guys just some research that may come in hady when you come to sell your Property.
Exclusive agency agreement;
Sole or Exclusive Agency agreement, the seller would limit himself or herself to one agent selling their property to potential buyers.
The Sole or Exclusive Agency method is recommended over the Open Listing method because the sale of the property is in the hands of one party only, saving the seller the confusion of having to liaise with more than one agent. Furthermore, this will save the seller the money and time involved in advertising and marketing costs when a number of agents are trying to sell the property.
Auction;
‘auction’ is conducted out in the public domain by a show of hands from registered buyers deciding the result or otherwise.
Selling by auction is also an Exclusive Agency agreement and is therefore also subject to the 60-calendar day agreement period. The auction process requires the seller to pay the agent to arrange effective marketing and advertising plans to maximise exposure of the property and the auction date to potential buyers.
Under the auction system, the seller agrees to pay commission to the listing agent if the property sells before the date of the auction, at the auction or in an agreed period after the auction.
Conjunctional;
The listing agents has complete freedom to negotiate the sharing of the fee with other agents participating in the sale or lease.
Friday, September 17, 2010
AUCTION or TENDER – what is the difference?
Actually when it comes to making a decision to sell your property the theory is pretty much the same, it is the method that is different.
In other words, taking a property to tender is in some respects the same as taking a property to auction in that ‘the price’ is taken out of the equation and the ‘market’ deciding on price is common to both as is the close-off date. The difference is that ‘tender’ is by confidential written application and ‘auction’ is conducted out in the public domain by a show of hands from registered buyers deciding the result or otherwise.
Geoffrey Ryan of Henzells Mooloolaba who has successfully used both methods says the main difference is that at an auction everyone knows what their next move is likely to be and the prospective buyer knows what he has to do to win.
“With a tender it is a confidentially submitted offer. No one knows what you have to pay to be the winner and your opposition doesn’t know what price you are bidding” he says.
A typical example of how well the process works was Unit 402, a grand three-bedroom residence in ‘Platinum” on Duporth Avenue, Maroochydore that recently sold prior to the tender closing off date.
“It needed to be marketed by the tender process because of the unique product and the flexibility of the sales options. It presented like a multi-million dollar property and throughout the process it looked like a multi-million dollar property, hence it attracted offers in excess of $2m,” Geoffrey said.
Being a professional couple the vendors went through the usual process of interviewing potential agents and then contracted the person they believed to be the most experienced professional to do the job for them; they listened to recommendations and followed that advice.
Geoffrey says “We went through a fabulous marketing campaign with bold full-page out-front advertisements, produced quality brochures, multiple press advertising, wonderful Web exposure, and great signage. As a result the property attracted a high volume of ‘quality’ interest and we achieved a great price for the vendor.”
Geoffrey said that right from the start the whole process was like a ‘honeymoon’. “Everything just flowed, “all the ducks lined up perfectly”, including the weather, and we sold the property.
Geoffrey added that part of the conditions of sale were the same as for auction – cash unconditional, waiving the five-day cooling-off period, and the usual deposit details.
“Some of the attractions to a tender as compared to an auction are that the purchaser can put conditions on the sale which may be a flexible settlement period, or the boat stays with the waterfront house, or the furniture is part of the deal. The tender process has many variables as compared to an auction.
“At the end of the day the success of a tender comes down to the agent knowing how to work the process. It is not just a matter of calling it a tender; it takes expertise to run a tender to get the best result.
“In the case of Unit 402 ‘Platinum’, tender was my recommendation to the vendor as the apartment could be offered fully furnished, partly furnished or unfurnished. A lot of the furniture was manufactured especially to suit the apartment. As a result, once the apartment was purchased the buyers then proceeded to purchase half of the furniture.
“There is a time and place for the tender process. Some properties with a special difference warrant being sold by tender as compared to auction, and those experienced in conducting tenders have good reason for recommending it,” he said.
As they say in the auction process “it doesn’t matter where we start, it’s where we finish that counts”, and consequently with Apartment 402 ‘Platinum’ the purchaser knew that he had to ‘put his best foot forward’ to take the property off the market in order to beat other prospective buyers. The purchaser was advised exactly what to do to be successful.
“At the end of the day I have an extremely happy vendor and a very excited purchaser who can’t wait to move in.”
Geoffrey confirmed that the vendors accepted an unconditional cash offer in excess of $2.3m. The Brisbane-based buyers who spend a lot of time on the Coast knew exactly what they were buying. After falling in love with 402 Platinum they changed their minds about building their dream home on their beach front land at Coolum (which is now on the market with Geoffrey Ryan). Other buyer interest came mainly from local interests and Brisbane and there was good interest from a Sydney party who were not ready to make a move to the Coast. “They would have bought it had the timing been right,” he said.
In other words, taking a property to tender is in some respects the same as taking a property to auction in that ‘the price’ is taken out of the equation and the ‘market’ deciding on price is common to both as is the close-off date. The difference is that ‘tender’ is by confidential written application and ‘auction’ is conducted out in the public domain by a show of hands from registered buyers deciding the result or otherwise.
Geoffrey Ryan of Henzells Mooloolaba who has successfully used both methods says the main difference is that at an auction everyone knows what their next move is likely to be and the prospective buyer knows what he has to do to win.
“With a tender it is a confidentially submitted offer. No one knows what you have to pay to be the winner and your opposition doesn’t know what price you are bidding” he says.
A typical example of how well the process works was Unit 402, a grand three-bedroom residence in ‘Platinum” on Duporth Avenue, Maroochydore that recently sold prior to the tender closing off date.
“It needed to be marketed by the tender process because of the unique product and the flexibility of the sales options. It presented like a multi-million dollar property and throughout the process it looked like a multi-million dollar property, hence it attracted offers in excess of $2m,” Geoffrey said.
Being a professional couple the vendors went through the usual process of interviewing potential agents and then contracted the person they believed to be the most experienced professional to do the job for them; they listened to recommendations and followed that advice.
Geoffrey says “We went through a fabulous marketing campaign with bold full-page out-front advertisements, produced quality brochures, multiple press advertising, wonderful Web exposure, and great signage. As a result the property attracted a high volume of ‘quality’ interest and we achieved a great price for the vendor.”
Geoffrey said that right from the start the whole process was like a ‘honeymoon’. “Everything just flowed, “all the ducks lined up perfectly”, including the weather, and we sold the property.
Geoffrey added that part of the conditions of sale were the same as for auction – cash unconditional, waiving the five-day cooling-off period, and the usual deposit details.
“Some of the attractions to a tender as compared to an auction are that the purchaser can put conditions on the sale which may be a flexible settlement period, or the boat stays with the waterfront house, or the furniture is part of the deal. The tender process has many variables as compared to an auction.
“At the end of the day the success of a tender comes down to the agent knowing how to work the process. It is not just a matter of calling it a tender; it takes expertise to run a tender to get the best result.
“In the case of Unit 402 ‘Platinum’, tender was my recommendation to the vendor as the apartment could be offered fully furnished, partly furnished or unfurnished. A lot of the furniture was manufactured especially to suit the apartment. As a result, once the apartment was purchased the buyers then proceeded to purchase half of the furniture.
“There is a time and place for the tender process. Some properties with a special difference warrant being sold by tender as compared to auction, and those experienced in conducting tenders have good reason for recommending it,” he said.
As they say in the auction process “it doesn’t matter where we start, it’s where we finish that counts”, and consequently with Apartment 402 ‘Platinum’ the purchaser knew that he had to ‘put his best foot forward’ to take the property off the market in order to beat other prospective buyers. The purchaser was advised exactly what to do to be successful.
“At the end of the day I have an extremely happy vendor and a very excited purchaser who can’t wait to move in.”
Geoffrey confirmed that the vendors accepted an unconditional cash offer in excess of $2.3m. The Brisbane-based buyers who spend a lot of time on the Coast knew exactly what they were buying. After falling in love with 402 Platinum they changed their minds about building their dream home on their beach front land at Coolum (which is now on the market with Geoffrey Ryan). Other buyer interest came mainly from local interests and Brisbane and there was good interest from a Sydney party who were not ready to make a move to the Coast. “They would have bought it had the timing been right,” he said.
Sunday, September 12, 2010
The plan I got back is called a Survey-Strata Plan. What is the difference between a Strata Plan and a Survey-Strata Plan?
Two types of schemes are permitted under the Strata Titles Act 1985, strata schemes and survey-strata schemes.
Strata Plan
A Strata Plan is the mechanism for creating strata schemes and strata titles under the Strata Titles Act 1985 as Amended. Strata plans define the lots in a strata scheme (areas owned individually) and common property (areas owned jointly by all lot owners in the strata scheme). Strata lots are limited in height and depth (the stratum of the lot). Strata plans show a building on at least one lot of the Strata Plan and stratum of the lots is always linked to buildings shown on the plan.
Survey - Strata Plan
A Survey-Strata Plan is the mechanism for creating survey-strata schemes and survey-strata titles under the Strata Titles Act 1985 as Amended. Survey-Strata Plans define the lots in a survey-strata scheme, which are the areas in the scheme owned individually. Common property areas owned jointly by all lot owners may, or may not exist in survey-strata schemes and are defined as "common property lots". Survey-strata lots may be limited in height and depth but generally are not. No buildings are shown on Survey-Strata Plans.
Strata Plan
A Strata Plan is the mechanism for creating strata schemes and strata titles under the Strata Titles Act 1985 as Amended. Strata plans define the lots in a strata scheme (areas owned individually) and common property (areas owned jointly by all lot owners in the strata scheme). Strata lots are limited in height and depth (the stratum of the lot). Strata plans show a building on at least one lot of the Strata Plan and stratum of the lots is always linked to buildings shown on the plan.
Survey - Strata Plan
A Survey-Strata Plan is the mechanism for creating survey-strata schemes and survey-strata titles under the Strata Titles Act 1985 as Amended. Survey-Strata Plans define the lots in a survey-strata scheme, which are the areas in the scheme owned individually. Common property areas owned jointly by all lot owners may, or may not exist in survey-strata schemes and are defined as "common property lots". Survey-strata lots may be limited in height and depth but generally are not. No buildings are shown on Survey-Strata Plans.
Thursday, September 9, 2010
Gen X and Y families avoid the suburbs
Carolyn Boyd
Trends show young families are happy staying in units.
Young couples and families with younger children without the budget for a house are checking out larger apartments as a permanent living choice.
It’s a trend demographer Bernard Salt says is growing, as more Generation X and Y families shy away from the suburban dream.
‘‘There’s a shift coming in apartment requirements,’’ Salt says. ‘‘Traditionally, the model is as soon as you have the child at about the 12-month mark you sell up and you move out to the ’burbs."
‘‘I think what we’ll now see is a generation of apartment inner-city aficionados who cannot abide the thought of suburbia and who will make compromises to their lifestyle and living arrangements in order to remain in the inner city. I think that’s going to place pressure on the types of apartments that are being built"
‘‘Instead of the uber-cool zen garden down at the ground level, you might find a playground.’’
Child-friendly features likely to be in demand include three bedroom apartments on the ground or lower floors and access to a secure communal garden.
Another group of families that is buying apartments consists of parents with children in their late teens or early 20s, who no longer yearn for a backyard space and want to be close to the city.
Affordable three-bedroom apartments can be a rare find but, for younger couples considering having children, they can be a smart buy because a third bedroom can stretch out the years families can stay in an apartment.
The median price of Sydney units grew 11.9 per cent in the 12 months to the end of June, with a median price of $436,000, according to figures from the Fairfax-owned Australian Property Monitors.
But units are still a much cheaper buy than houses. The median house price in Sydney reached more than $625,000 in the 12 months to the end of June after jumping 13 per cent year-on-year.
A real estate agent from Doyle Spillane at Dee Why, George Bachtis, has a three-bedroom apartment on his books.
Along with downsizers, he’s had a mix of young couples and families with babies or toddlers looking. Bachtis says he’s noticed more families inspecting apartments during the past five years.
Belle Property agent Aimee Wood is marketing a three-bedroom, one bathroom semi near The Spot in Randwick for $780,000-plus.
She says she’s seen mostly young couples or families with young babies coming through the door at showings of the eastern suburbs unit.
The ground-floor property in Howard Street has access to a courtyard, communal garden and three car spaces.
Family apartments - what to look for:
• A ground-floor unit with level access to the street to make it easier to get prams and young children in and out.
• A secure communal garden young children can access — in view of the apartment.
• A bath (or space to put one in) and an internal laundry or an opportunity to create one, perhaps by adding a front-loading machine to the bathroom.
• Plenty of storage space, such as a linen press and built-in wardrobes. A separate storage unit can be a bonus.
• Walking distance to parks and shops.
Trends show young families are happy staying in units.
Young couples and families with younger children without the budget for a house are checking out larger apartments as a permanent living choice.
It’s a trend demographer Bernard Salt says is growing, as more Generation X and Y families shy away from the suburban dream.
‘‘There’s a shift coming in apartment requirements,’’ Salt says. ‘‘Traditionally, the model is as soon as you have the child at about the 12-month mark you sell up and you move out to the ’burbs."
‘‘I think what we’ll now see is a generation of apartment inner-city aficionados who cannot abide the thought of suburbia and who will make compromises to their lifestyle and living arrangements in order to remain in the inner city. I think that’s going to place pressure on the types of apartments that are being built"
‘‘Instead of the uber-cool zen garden down at the ground level, you might find a playground.’’
Child-friendly features likely to be in demand include three bedroom apartments on the ground or lower floors and access to a secure communal garden.
Another group of families that is buying apartments consists of parents with children in their late teens or early 20s, who no longer yearn for a backyard space and want to be close to the city.
Affordable three-bedroom apartments can be a rare find but, for younger couples considering having children, they can be a smart buy because a third bedroom can stretch out the years families can stay in an apartment.
The median price of Sydney units grew 11.9 per cent in the 12 months to the end of June, with a median price of $436,000, according to figures from the Fairfax-owned Australian Property Monitors.
But units are still a much cheaper buy than houses. The median house price in Sydney reached more than $625,000 in the 12 months to the end of June after jumping 13 per cent year-on-year.
A real estate agent from Doyle Spillane at Dee Why, George Bachtis, has a three-bedroom apartment on his books.
Along with downsizers, he’s had a mix of young couples and families with babies or toddlers looking. Bachtis says he’s noticed more families inspecting apartments during the past five years.
Belle Property agent Aimee Wood is marketing a three-bedroom, one bathroom semi near The Spot in Randwick for $780,000-plus.
She says she’s seen mostly young couples or families with young babies coming through the door at showings of the eastern suburbs unit.
The ground-floor property in Howard Street has access to a courtyard, communal garden and three car spaces.
Family apartments - what to look for:
• A ground-floor unit with level access to the street to make it easier to get prams and young children in and out.
• A secure communal garden young children can access — in view of the apartment.
• A bath (or space to put one in) and an internal laundry or an opportunity to create one, perhaps by adding a front-loading machine to the bathroom.
• Plenty of storage space, such as a linen press and built-in wardrobes. A separate storage unit can be a bonus.
• Walking distance to parks and shops.
Tuesday, September 7, 2010
Find a Home Loan Seminar
Looking for some specialist home loan advice on how to go about buying your first home, refinancing your current home loan or investing in property?
Our local Mortgage Choice brokers regularly run free local home loan seminars explaining everything you need to know to make your move into your next property.
SPECIAL OFFER: Simply by attending one of our seminars before 5 October 2010, you’ll receive a free RP Data Property Report voucher, valid at $89.
What a find guys....
http://www.mortgagechoice.com.au/find-a-home-loan-seminar.aspx
Our local Mortgage Choice brokers regularly run free local home loan seminars explaining everything you need to know to make your move into your next property.
SPECIAL OFFER: Simply by attending one of our seminars before 5 October 2010, you’ll receive a free RP Data Property Report voucher, valid at $89.
What a find guys....
http://www.mortgagechoice.com.au/find-a-home-loan-seminar.aspx
Sunday, September 5, 2010
Aussiehome TV Show - Google Real Estate (Ep 7.1) and google real estate map
www.googlemapsrealestate.com what a great site to quickly find real estate in your chosen area
Prime Time For First Time?
Tim Lawless
National Research Director of RP Data
For first-time buyers, 2009 was certainly a
very attractive time to get into the housing
market. After price falls through 2008,
followed by consistent rental growth, the
differential in the cost associated with renting
and buying narrowed signifi cantly. Clearly
the First Home Owner’s Grant Boost and the
lowest interest rates in 49 years dramatically
helped, but negotiating conditions certainly
weren’t in the buyers favour. Competition
for available properties was immense and
sellers held the upper-hand. In many cases
these sellers had a large number of parties
interested in their properties.
However, in 2010 the tables have turned,
with numbers of fi rst-time buyers declining
every month. This was no doubt contributed
to by the end of the Federal Government’s
Boost and standard variable interest rates
being 160 basis points higher than they were
at their lowest point last year. Vendors trying
to sell properties, normally attractive to fi rst
time buyers and usually below $600,000,
have found buyers to be scarce. The rate of
property value growth is slowing, particularly
within the more affordable suburbs, and
servicing housing debt is more expensive. As
a result negotiation power in the affordable
market lies with the few who are in a position
to buy.
For the fi rst-time investor the situation
depends on the type of property they are
looking at purchasing. If focussing on quality
inner city housing, the vendor will have some
level of power in the negotiation. However,
if the investor is targeting more affordable
outer city markets they are likely to hold
a much greater level of negotiation. Other
markets which may appeal to fi rst-time
investors include coastal markets, treechange
markets or resource towns.
Coastal and tree-change markets have
begun to improve in recent months and have
seen a degree of price growth. However,
in most instances they remain well below
their peaks and buyers are still tentative.
Is it a buyer’s market or a seller’s market at the moment? My short
answer is that it appears to be a buyer’s market but it is probably
too early to tell.
Prime Time For First Time?
An investor looking to purchase in one of
these markets is likely to have quite a lot of
leverage. The issue is that returns have been
eroded in many of these markets and tourist
volumes are down, making investing in this
market less attractive at present.
Retirees
have also been reluctant to make the move
into these markets, given the economic
uncertainty over the last 18 months and
plunging value of their Superannuation.
Resource towns on the other hand generally
remain strong, despite the uncertainty
surrounding the Resources Super Profi ts
Tax. Resource towns are certainly deemed
high risk, high reward investments. If you get
it right the results can be very lucrative both
in terms of price growth and rental return.
If you get it wrong the property can end up
being virtually worthless.
Considering the
uncertainty around new projects the towns
surrounding well established markets are the
best ones to target. The diffi culty for buyers
lies in fi nding someone willing to part with
their property due to the historically high
price growth in recent years and gross rental
yields nudging 10% in some areas. For this
reason the seller clearly holds the upperhand
in most of these regions.
Overall, the property market appears to be
transitioning from a period of strong property
value growth to moderate value growth and
the balance of power in market negotiation
is shifting. Sellers have generally held much
of the power since early 2009, however
the power has now swung in favour of the
buyers given their decreasing numbers.
This change in the balance of power is also
refl ected in increasing vendor discounting
levels which nationally sat at 4.8% for
houses in December 2009. Levels have
now increased to 5.4% as at April 2010.
We would expect that the level of vendor
discounting will climb further in the coming
months as the market conditions tilt further
in favour of the buyer.
“Overall, the property market
appears to be transitioning from
a period of strong property value
growth to moderate value growth
and the balance of power in
market negotiation is shifting.”
National Research Director of RP Data
For first-time buyers, 2009 was certainly a
very attractive time to get into the housing
market. After price falls through 2008,
followed by consistent rental growth, the
differential in the cost associated with renting
and buying narrowed signifi cantly. Clearly
the First Home Owner’s Grant Boost and the
lowest interest rates in 49 years dramatically
helped, but negotiating conditions certainly
weren’t in the buyers favour. Competition
for available properties was immense and
sellers held the upper-hand. In many cases
these sellers had a large number of parties
interested in their properties.
However, in 2010 the tables have turned,
with numbers of fi rst-time buyers declining
every month. This was no doubt contributed
to by the end of the Federal Government’s
Boost and standard variable interest rates
being 160 basis points higher than they were
at their lowest point last year. Vendors trying
to sell properties, normally attractive to fi rst
time buyers and usually below $600,000,
have found buyers to be scarce. The rate of
property value growth is slowing, particularly
within the more affordable suburbs, and
servicing housing debt is more expensive. As
a result negotiation power in the affordable
market lies with the few who are in a position
to buy.
For the fi rst-time investor the situation
depends on the type of property they are
looking at purchasing. If focussing on quality
inner city housing, the vendor will have some
level of power in the negotiation. However,
if the investor is targeting more affordable
outer city markets they are likely to hold
a much greater level of negotiation. Other
markets which may appeal to fi rst-time
investors include coastal markets, treechange
markets or resource towns.
Coastal and tree-change markets have
begun to improve in recent months and have
seen a degree of price growth. However,
in most instances they remain well below
their peaks and buyers are still tentative.
Is it a buyer’s market or a seller’s market at the moment? My short
answer is that it appears to be a buyer’s market but it is probably
too early to tell.
Prime Time For First Time?
An investor looking to purchase in one of
these markets is likely to have quite a lot of
leverage. The issue is that returns have been
eroded in many of these markets and tourist
volumes are down, making investing in this
market less attractive at present.
Retirees
have also been reluctant to make the move
into these markets, given the economic
uncertainty over the last 18 months and
plunging value of their Superannuation.
Resource towns on the other hand generally
remain strong, despite the uncertainty
surrounding the Resources Super Profi ts
Tax. Resource towns are certainly deemed
high risk, high reward investments. If you get
it right the results can be very lucrative both
in terms of price growth and rental return.
If you get it wrong the property can end up
being virtually worthless.
Considering the
uncertainty around new projects the towns
surrounding well established markets are the
best ones to target. The diffi culty for buyers
lies in fi nding someone willing to part with
their property due to the historically high
price growth in recent years and gross rental
yields nudging 10% in some areas. For this
reason the seller clearly holds the upperhand
in most of these regions.
Overall, the property market appears to be
transitioning from a period of strong property
value growth to moderate value growth and
the balance of power in market negotiation
is shifting. Sellers have generally held much
of the power since early 2009, however
the power has now swung in favour of the
buyers given their decreasing numbers.
This change in the balance of power is also
refl ected in increasing vendor discounting
levels which nationally sat at 4.8% for
houses in December 2009. Levels have
now increased to 5.4% as at April 2010.
We would expect that the level of vendor
discounting will climb further in the coming
months as the market conditions tilt further
in favour of the buyer.
“Overall, the property market
appears to be transitioning from
a period of strong property value
growth to moderate value growth
and the balance of power in
market negotiation is shifting.”
Thursday, September 2, 2010
we demanded that real estate agents to Socialise
we demanded that real estate agents to Socialise
To Tweet or Not to Tweet – is that the question?
by Alice
Twitter Icon First we demanded that real estate agents were ‘on the internet’, next we suggested they need a ‘smartphone’. Now it seems we are expecting a Facebook profile, a Twitter account and a blog or two. What a demanding lot us consumers are!!! But the raw truth is if you’re not utilizing the ‘Social Media’ space then you’re not in the traffic.
So just what are these new technologies termed ‘Social Media’ and why have they become so important to doing business?
In essence, Social Media are a group of internet-based applications that allow the creation and exchange of user-generated content (UGC). Based on the ideological and technical foundations of Web 2.0, where we moved from the Internet being a place to passively view content to a place where consumers can interact, share and collaborate, this new form of media is fast becoming the way of the future in terms of marketing and networking. Common examples are social networking sites, blogs, wikis, video sharing sites and web applications. To research a definition of Social Media is to find a common thread: a blending of technology and social interaction for the co-creation of value.
It is this ‘value’ component that make Social Media so appealing to both large and small businesses – anyone who wants to build a brand, maintain a reputation and reach customers. Given the broad global reach of Social Media, these applications are now allowing companies to reach larger audiences in multiples languages. They have become the new tools for marketers and sales people.
And if you think this is all just fun and games for the ‘young ones’, think again. In Australia there are more than 12 million users across Facebook, Twitter and MySpace, with more than 80% of these users over the age of 21. These tools have become a major part of our online lives . Discussions are occurring every second of the day about topics as banal as what the cat ate for breakfast or as powerful as how real estate agent X treated me throughout my selling process.
For property-obsessed Australians, any platform is a good platform to discuss property. Consider it the ‘virtual BBQ’ conversation. Believe me, there are some interesting conversations going on in cyberspace about the Australian real estate market! So how do property professionals engage usefully with these new tools? And as buyers and sellers, how do we utilize this media to best advantage?
Being considered a leader in the industry and their specific marketplace is key to a real estate agent’s success. The branding, the shopfront, the newspaper advertising, the sign boards – all are about building brand awareness and reputation. But this is a new era. How do these things translate? Agents who want a competitive advantage are setting up their virtual shopfronts and inviting the punters in for a conversation.
Let’s take a look at the favourites:
1. Facebook – agents should set up a ‘Fan Page’ and invite their existing network to join them. Potential buyers/sellers should seek out agents in their area and become ‘fans’ of those who have something worthwhile to say. The aim for agents is to then have these fans share the joy with their friends, so the network (and brand reach) widens. With more than 400million reported users worldwide, there is a significant number of potential customers! Agents should post regularly to their ‘Wall’, but not just listing advertisements. The name of the game is ‘engagement’, so write commentary about the area, the recent sales, council issues, community involvement etc. Perhaps even special promotions, events or surveys. Importantly, consumers and agents should be commenting and asking questions AND making sure questions are answered promptly.
2. Blogs – what began mostly as an online diary, the blog has now become a key ingredient of any business’ online strategy. Blogs can be used to update customers and prospects on the state of the market and messages about the company. Agents can use them to announce sales results, forthcoming auctions, open house inspections or share tips on presenting homes for sale etc. Blogging platforms typically allow readers to comment or provide feedback, so, again, the onus is on the blog owner to answer any questions in a timely manner. The goal is to engage users – not lose them once you’ve sucked them in!
3. Twitter – in a similar vein to Facebook and Blogs, people use Twitter to share ‘Status Updates’ with their ‘Followers’ (people who have actively chosen to follow your updates). However, unlike other Social Media, Twitter posts are restricted in length – 140 characters to be exact. It doesn’t seem like much, but the power of these short sharp ‘Tweets’ can be amazing. Another defining factor is that many users choose to Tweet multiple times a day, versus posting to a blog or Facebook a few times a week. It’s a great way to communicate quick thoughts, share links, video and pictures. Agents can let buyers know about an Open House happening right then for example. Or it might also be used to alert buyers to new photos of a property or a price reduction.
4. You Tube – the power of well-produced video is fantastic for the property industry. Australians are natural property voyeurs and getting an inside peek at a property for sale is a great way to lure them into a conversation. Adding content to You Tube is easy and an efficient way to share video information. Typically agents would upload video tours of individual properties, but they might also consider a regular commentary piece about their area/market or produce some enticing suburb/location videos to assist with a buyer’s research.
Like any form of marketing, Social Media isn’t the be all to end all; it should form part of a broader marketing mix. It does however allow for a unique form of customer engagement, previously unheard of in direct marketing. It is a far more intimate channel that gets right into the lounge-rooms and pockets of the audience. Word of mouth, or viral marketing, opportunities are also improved by these Social Media tools – it’s simply that much easier to share information now. The ability to provide instant feedback and commentary gives marketers/businesses an opportunity to act quickly and responsibly, therefore the potential for long-term professional relationships is greatly enhanced through this media.
Article by Joanna Johnson
To Tweet or Not to Tweet – is that the question?
by Alice
Twitter Icon First we demanded that real estate agents were ‘on the internet’, next we suggested they need a ‘smartphone’. Now it seems we are expecting a Facebook profile, a Twitter account and a blog or two. What a demanding lot us consumers are!!! But the raw truth is if you’re not utilizing the ‘Social Media’ space then you’re not in the traffic.
So just what are these new technologies termed ‘Social Media’ and why have they become so important to doing business?
In essence, Social Media are a group of internet-based applications that allow the creation and exchange of user-generated content (UGC). Based on the ideological and technical foundations of Web 2.0, where we moved from the Internet being a place to passively view content to a place where consumers can interact, share and collaborate, this new form of media is fast becoming the way of the future in terms of marketing and networking. Common examples are social networking sites, blogs, wikis, video sharing sites and web applications. To research a definition of Social Media is to find a common thread: a blending of technology and social interaction for the co-creation of value.
It is this ‘value’ component that make Social Media so appealing to both large and small businesses – anyone who wants to build a brand, maintain a reputation and reach customers. Given the broad global reach of Social Media, these applications are now allowing companies to reach larger audiences in multiples languages. They have become the new tools for marketers and sales people.
And if you think this is all just fun and games for the ‘young ones’, think again. In Australia there are more than 12 million users across Facebook, Twitter and MySpace, with more than 80% of these users over the age of 21. These tools have become a major part of our online lives . Discussions are occurring every second of the day about topics as banal as what the cat ate for breakfast or as powerful as how real estate agent X treated me throughout my selling process.
For property-obsessed Australians, any platform is a good platform to discuss property. Consider it the ‘virtual BBQ’ conversation. Believe me, there are some interesting conversations going on in cyberspace about the Australian real estate market! So how do property professionals engage usefully with these new tools? And as buyers and sellers, how do we utilize this media to best advantage?
Being considered a leader in the industry and their specific marketplace is key to a real estate agent’s success. The branding, the shopfront, the newspaper advertising, the sign boards – all are about building brand awareness and reputation. But this is a new era. How do these things translate? Agents who want a competitive advantage are setting up their virtual shopfronts and inviting the punters in for a conversation.
Let’s take a look at the favourites:
1. Facebook – agents should set up a ‘Fan Page’ and invite their existing network to join them. Potential buyers/sellers should seek out agents in their area and become ‘fans’ of those who have something worthwhile to say. The aim for agents is to then have these fans share the joy with their friends, so the network (and brand reach) widens. With more than 400million reported users worldwide, there is a significant number of potential customers! Agents should post regularly to their ‘Wall’, but not just listing advertisements. The name of the game is ‘engagement’, so write commentary about the area, the recent sales, council issues, community involvement etc. Perhaps even special promotions, events or surveys. Importantly, consumers and agents should be commenting and asking questions AND making sure questions are answered promptly.
2. Blogs – what began mostly as an online diary, the blog has now become a key ingredient of any business’ online strategy. Blogs can be used to update customers and prospects on the state of the market and messages about the company. Agents can use them to announce sales results, forthcoming auctions, open house inspections or share tips on presenting homes for sale etc. Blogging platforms typically allow readers to comment or provide feedback, so, again, the onus is on the blog owner to answer any questions in a timely manner. The goal is to engage users – not lose them once you’ve sucked them in!
3. Twitter – in a similar vein to Facebook and Blogs, people use Twitter to share ‘Status Updates’ with their ‘Followers’ (people who have actively chosen to follow your updates). However, unlike other Social Media, Twitter posts are restricted in length – 140 characters to be exact. It doesn’t seem like much, but the power of these short sharp ‘Tweets’ can be amazing. Another defining factor is that many users choose to Tweet multiple times a day, versus posting to a blog or Facebook a few times a week. It’s a great way to communicate quick thoughts, share links, video and pictures. Agents can let buyers know about an Open House happening right then for example. Or it might also be used to alert buyers to new photos of a property or a price reduction.
4. You Tube – the power of well-produced video is fantastic for the property industry. Australians are natural property voyeurs and getting an inside peek at a property for sale is a great way to lure them into a conversation. Adding content to You Tube is easy and an efficient way to share video information. Typically agents would upload video tours of individual properties, but they might also consider a regular commentary piece about their area/market or produce some enticing suburb/location videos to assist with a buyer’s research.
Like any form of marketing, Social Media isn’t the be all to end all; it should form part of a broader marketing mix. It does however allow for a unique form of customer engagement, previously unheard of in direct marketing. It is a far more intimate channel that gets right into the lounge-rooms and pockets of the audience. Word of mouth, or viral marketing, opportunities are also improved by these Social Media tools – it’s simply that much easier to share information now. The ability to provide instant feedback and commentary gives marketers/businesses an opportunity to act quickly and responsibly, therefore the potential for long-term professional relationships is greatly enhanced through this media.
Article by Joanna Johnson
Wednesday, September 1, 2010
Australian Economy Market Outlook Economic review
Adjunct Professor of
Finance, MGSM
Tom Valentine
The Australian economy has come through
the Global Financial Crisis (GFC) fairly well.
This is not surprising given the economy
was strong, our banks were in a sound
position and relatively little of the US
toxic debt had found its way here. From
Australia’s point of view, the GFC was an
external shock arising overseas rather than
from local conditions. A simple response
would have been for the Australian dollar to
depreciate, increasing competitiveness of
Australian exporters and import competing
businesses.
However, in response to the usual media
hysteria, an inexperienced government
rapidly cobbled together a wasteful and
unproductive stimulus package which
drove the Australian dollar up and made
Australian exporters less competitive.
The stimulus package was not seen to
slow the economy down but instead
caused a substitution of sales of fl at
screen televisions for export sales. In a
fl oating exchange rate environment, a fi scal
stimulus is an accelerator connected to a
brake (the exchange rate).
This mechanism
would have been better supported by
a reduction in interest rates.
In fact, the
RBA continued increasing interest rates
for approximately one year after the 2007
emergence of an overseas fi nancial crisis.
The stimulus was unnecessary and has left
us with considerable debt. The government
forecasts that the budget will be in surplus
shortly, but this forecast appears to be
based on very optimistic assumptions and
a new tax with a very uncertain future.
The government has not helped this
problem by rushing out a cobbled together
revision of the taxation arrangements for
mining companies.
The government calls this proposal ‘tax
reform,’ although it is a far cry from the ‘root
and branch reform’ promised by the Prime
Minister. It does not treat different businesses
equally and it is retrospective. The latter is
poison for international investors. Also, all
commentators agree that the bond rate is a
very defective indicator of a normal return in
a risky business such as mining. As a result,
the mining industry tax rate (around 58%)
is too high and makes us uncompetitive
on an international basis. This is no time
for a government to engage in amateurish
tinkering with the tax system.
The recent strength of the economy can
be attributed to the increase in commodity
prices which have almost returned to the
levels of June 2008. It appears we have
benefi ted from a fi scal stimulus – the
Chinese fi scal stimulus. However, the
economy is far from back to its best and
there remain signs of weakness in the
employment market. It is likely that the RBA
has moved too quickly to raise interest rates.
Australian interest rates do not infl uence
global commodity prices, and increases
impact mainly on the lagging sectors of the
economy.
Investment possibilities
Long-term investors (that is, those who will
not need access to cash in the near future)
should invest in so-called growth assets
such as property and/or shares. Over long
periods, these asset classes have yielded
higher average returns than alternative
choices. At the moment property may be
a better choice than shares for nervous
investors, with the price of the latter very
sensitive to overseas developments and the
vagaries of government policy making.
A ‘bubble’ in property prices has been
suggested, whereby an increase in price
is not justifi ed by the fundamental pricing
determinants. This does not appear to be
generally true. While there may have been a
small bubble at the lower end of the market,
it can more likely be attributed to the New
Home Owners’ Grant, part of the stimulus
package.
Current projections of population suggest
that demand continues to grow steadily, and
will do so into the future. There are supply
constraints which mean that there is likely
to be a continuing property shortage. State
governments have restricted the release of
land and their levies have increased the cost
and slowed down developments.
One of the many incorrect conclusions
drawn from the GFC is that leverage
(borrowing to invest) is dangerous. It is
true that many investors were over-geared
in that period, but judicious borrowing is
an important tool in investment. Property
is ideally suited for this purpose because
property loans do not involve margin calls,
but provide considerable fl exibility.
It is impossible to time your investment
purchases so that you always buy at the
lowest possible price and sell at the highest.
Instead it is more important to acquire quality
assets which will perform well over time. For
this, you need to make use of competent
professional advice.
Finance, MGSM
Tom Valentine
The Australian economy has come through
the Global Financial Crisis (GFC) fairly well.
This is not surprising given the economy
was strong, our banks were in a sound
position and relatively little of the US
toxic debt had found its way here. From
Australia’s point of view, the GFC was an
external shock arising overseas rather than
from local conditions. A simple response
would have been for the Australian dollar to
depreciate, increasing competitiveness of
Australian exporters and import competing
businesses.
However, in response to the usual media
hysteria, an inexperienced government
rapidly cobbled together a wasteful and
unproductive stimulus package which
drove the Australian dollar up and made
Australian exporters less competitive.
The stimulus package was not seen to
slow the economy down but instead
caused a substitution of sales of fl at
screen televisions for export sales. In a
fl oating exchange rate environment, a fi scal
stimulus is an accelerator connected to a
brake (the exchange rate).
This mechanism
would have been better supported by
a reduction in interest rates.
In fact, the
RBA continued increasing interest rates
for approximately one year after the 2007
emergence of an overseas fi nancial crisis.
The stimulus was unnecessary and has left
us with considerable debt. The government
forecasts that the budget will be in surplus
shortly, but this forecast appears to be
based on very optimistic assumptions and
a new tax with a very uncertain future.
The government has not helped this
problem by rushing out a cobbled together
revision of the taxation arrangements for
mining companies.
The government calls this proposal ‘tax
reform,’ although it is a far cry from the ‘root
and branch reform’ promised by the Prime
Minister. It does not treat different businesses
equally and it is retrospective. The latter is
poison for international investors. Also, all
commentators agree that the bond rate is a
very defective indicator of a normal return in
a risky business such as mining. As a result,
the mining industry tax rate (around 58%)
is too high and makes us uncompetitive
on an international basis. This is no time
for a government to engage in amateurish
tinkering with the tax system.
The recent strength of the economy can
be attributed to the increase in commodity
prices which have almost returned to the
levels of June 2008. It appears we have
benefi ted from a fi scal stimulus – the
Chinese fi scal stimulus. However, the
economy is far from back to its best and
there remain signs of weakness in the
employment market. It is likely that the RBA
has moved too quickly to raise interest rates.
Australian interest rates do not infl uence
global commodity prices, and increases
impact mainly on the lagging sectors of the
economy.
Investment possibilities
Long-term investors (that is, those who will
not need access to cash in the near future)
should invest in so-called growth assets
such as property and/or shares. Over long
periods, these asset classes have yielded
higher average returns than alternative
choices. At the moment property may be
a better choice than shares for nervous
investors, with the price of the latter very
sensitive to overseas developments and the
vagaries of government policy making.
A ‘bubble’ in property prices has been
suggested, whereby an increase in price
is not justifi ed by the fundamental pricing
determinants. This does not appear to be
generally true. While there may have been a
small bubble at the lower end of the market,
it can more likely be attributed to the New
Home Owners’ Grant, part of the stimulus
package.
Current projections of population suggest
that demand continues to grow steadily, and
will do so into the future. There are supply
constraints which mean that there is likely
to be a continuing property shortage. State
governments have restricted the release of
land and their levies have increased the cost
and slowed down developments.
One of the many incorrect conclusions
drawn from the GFC is that leverage
(borrowing to invest) is dangerous. It is
true that many investors were over-geared
in that period, but judicious borrowing is
an important tool in investment. Property
is ideally suited for this purpose because
property loans do not involve margin calls,
but provide considerable fl exibility.
It is impossible to time your investment
purchases so that you always buy at the
lowest possible price and sell at the highest.
Instead it is more important to acquire quality
assets which will perform well over time. For
this, you need to make use of competent
professional advice.
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