Posts Tagged ‘property’

HOME sellers could be forced to publish their reserve price under proposals discussed yesterday to stamp out underquoting.

Interesting post in the Herald Sun today (http://www.news.com.au/heraldsun/story/0,21985,25810291-2862,00.html):

The Real Estate Institute of Victoria was summoned by Consumer Affairs Victoria boss Claire Noone to discuss ways to stop agents who deliberately underquote.

The meeting follows a Herald Sun investigation that revealed many properties were passed in at higher than advertised prices.

The State Government move comes two days after the Australian Competition and Consumer Commission said home owners would face fines up to $220,000 for underquoting.

Under new laws to come into force on January 1, home hunters who are duped will be able to ask for the return of pre-purchase costs if a property is underquoted.

Stockdale and Leggo chief Peter Thomas said deliberate underquoting was a serious problem that needed to be stamped out.

He said despite decades of experience in real estate he, too, had been duped and wasted time viewing properties that had been advertised for less then they were worth.

Last month, a REIV committee rejected a proposal that would have forced vendors to publish their reserve price before auctions.

But pressure to clean up rogue estate agents continues to mount.

Bennison Mackinnon boss Iain Carmichael said forcing owners to publish their reserve price would put an immediate end to underquoting.

"Make the publication of reserves mandatory and overnight, underquoting ceases," said buyers advocate David Morrell. "Overnight, dummy bidders disappear."

REIV chief executive Enzo Raimondo described yesterday’s meeting with the Consumer Affairs as useful.

But the REIV is believed to have declared its opposition to laws that would force vendors to publish their reserve price.

"The REIV will continue to work with CAV to outline best practice to its members and increase the provision of education to consumers," Mr Raimondo said.

Consumer Affairs spokeswoman Heather Abbott said the department would continue to work with the REIV.

"Both organisations share the same objectives — that is, compliance within the industry," she said.

"CAV will continue with its real estate compliance and enforcement program."

With affordability at its lowest level on record, first-home buyers have to think outside the square.

The home-ownership dream rarely used to feature a sibling in your bathtub and a parent on your certificate of title. These days though, first-home buyers are prepared to be flexible.

Housing affordability fell to record lows in the March quarter this year according to the latest Housing Industry Association-Commonwealth Bank report.                Mortgage payments now account for 30.7 per cent of total first-home buyer income!

Generations X and Y are also settling down later meaning for many home ownership is a solo battle.

It’s not surprising then that increasing numbers of first-home buyers are teaming up with siblings, parents or friends in a bid to break into the property market.

“There has been a noticeable trend towards family members buying property together, as property prices are still very high, particularly for first-home buyers,” says Aussie Home Loans boss John Symond.

The number of family members taking out mortgages together has jumped from about 1% of all loans originated by ‘Aussie’ to 5 per cent over the past two years!   Mortgage Choice has reported a similar trend. A survey carried out by the company last year revealed more than 6 per cent of people who bought property within the past two years had done so with family or friends. And of those who intended to buy property within the next two years, over 8 per cent intended to do so with family or friends!

INVESTORS own around two million homes in Australia and every year thousands claim deductions they’re not entitled to and fall foul of the Australian Taxation Office.

The result can be a kindly warning or a significant fine and large interest bill.

The tax office says it is investors’ responsibility to get their tax returns right and they can’t blame their accountant or plead ignorance if they get it wrong.

One of the most common mistakes investors make is claiming items that should be depreciated over several years.

According to the tax office, initial repairs to fix damage, defects or deterioration that existed when a property was bought are capital expenses that should be claimed as capital-works deductions over either 25 or 40 years.

Capital improvements such as re-modelling a bathroom or adding a pergola should also be claimed as capital-works deductions.

Other mistakes include:

Interest

Taxpayers sometimes use loans for investing and private purposes — for example, to buy or renovate a rental property or to buy a motor boat.

The interest expense on the private portion of the loan (the boat) is not deductible!

Legal expenses

Conveyancing expenses incurred when buying and selling a property are not deductible. These form part of the cost for capital-gains tax purposes.

Travel expenses

If you take a holiday and visit your investment property while you’re there, you cannot claim a deduction for the full trip.

The tax office says you may claim only those expenses directly related to the property inspection and a proportion of accommodation expenses.

Property investors should be planning ahead to take advantage of the next upturn in the property cycle, that’s according to quantity surveying firm Asset Economics.

“Property booms never last and neither do property busts,” the firm says in its latest newsletter.

To take advantage of the next boom, investors really need to ensure they’re buying for long-term capital growth and take in account the ripple effect.

“As our next property cycle comes around, it‘ll be the most desirable sought-after areas that start growing first, and these are generally the most affluent areas too.”

From there, capital growth starts to “ripple outwards!!”

Increasing rents have boosted the housing component of the Consumer Price Index (CPI) by   0.9 per cent for the quarter and the overall annual increase to 5.5 per cent, that’s according to Australian Bureau of Statistics (ABS) figures released this week.

The CEO of Real Estate Institute of Australia has said, “The majority of this increase in the housing component was driven by rents, which increased nationally by 1.7 per cent over the quarter and 8.4 per cent over the year. The cities where rents increased the most were Perth and Darwin with annual increases of 10.9 per cent and 13.5 per cent respectively!”

This rent increase in the recent quarter reflects low vacancy rates and the scarcity of rental properties across capital cities, combined with the decrease in building approvals and housing finance for investment.

The National Rental Affordability Scheme should hopefully relieve this figure, however the impact won’t be felt for quite some time.

“With an underlying demand for additional housing at around 200,000 dwellings per year and commencement of new dwellings of 147,000 in 2008, Australia will need to build significantly more houses than what has occurred to meet rental demand.”

Whilst housing affordability improved since the Reserve Bank rate cuts, there’s really been very little   flow-on benefit to those in the rental market.

“With lower interest rates and greater affordability, now would be an almost perfect time for those in the rental market to consider the purchase of their own home.”

VICTORIAN property values have plummeted about $40 billion in the past six months.

Melbourne’s median house price of $450,000 mid-2008 is now down to $427,500, according to estimates.

And house price expectations across Australia have sunk to an all-time low, a new report says.

Victoria’s $800 billion residential property market has dropped 5 per cent - or $40 billion - overall since July, according to BIS Shrapnel calculations prepared for the Herald Sun.

The trend has opened the door for potential borrowers desperate for cheaper housing.

Read the full article here: http://www.news.com.au/heraldsun/story/0,21985,24881569-5013926,00.html

MELBOURNE’S last big auction day of 2008 ended with a mad scramble from buyers and sellers hoping to get contracts signed before Christmas.

The weekend clearance rate of 57 per cent from more than 600 auctions was still low, but up on the previous week.

Industry experts said the scramble, fuelled by interest rate cuts, showed that the property downturn might be easing.

Read the full article here:

http://www.news.com.au/heraldsun/story/0,21985,24799115-5013926,00.html

Mark Forytarz

Times are tough but some experts believe we’re through the worst of it.

Can you hear it? It sounds like a distant ring, a peal of bells, not of Yuletide bonhomie but of changed fortunes in that most solid of staple investments, bricks and mortar. Shares are so yesterday. Stockbroking’s a dirty word. Nobody’s talking margin loans. But could the property market be a bellwether of better times?

At least some of the notes are on song. The Reserve Bank dropping the cash rate to 4.25 per cent and perhaps going even lower. Figures this week from the nation’s largest mortgage broker, AFG, indicate NSW first-home buyers are back in the market, with November’s loan approvals up 113 per cent on August. And Sydney house prices - despite all the doomsday scenarios - actually gained 0.51 per cent in the October quarter. There was also a 1.6 per cent increase in the number of loans for established homes in October.

"The property market has moved through the bottom of its cycle," says RP Data’s head of research, Tim Lawless.

Read the full article here:

http://www.domain.com.au/Public/Article.aspx?id=1228585093137&index=NationalIndex&headline=Long%20daze%20on%20market

Mark Forytarz

Australia’s central bank will hold off on further rate cuts until at least February, according to its December meeting minutes, allowing time for recent rate cuts to work their way through the economy and spur growth.

Read the full article here:

http://www.domain.com.au/Public/Article.aspx?id=1229189661521&index=NationalIndex&headline=RBA%20to%20take%20rate-cut%20holiday,%20minutes%20suggest

Mark Forytarz