M A Y
P U L S E
2 0 1 8
M A R K E T
PUBLISHER Century 21 Australia Pty Ltd
M A R K E T P U L S E
CONTRIBUTORS Charles Tarbey Tim Lawless Eliot Hastie Chris Gray Bradley Beer
EDITORIAL ENQUIRIES Century 21 Australia (02) 8295 0600
ADVERTISING ENQUIRIES Century 21 Australia
THE MAY 2018 ISSUE OF
C21 MARKET PULSE
(02) 8295 0600
C O N T E N T S M A Y
2 0 1 8
TAX TIME TIPS
Australian Property Market in Winter
BMTâ€™s Top ten Tips for Tax Time.
Century 21 Chairman, Charles Tarbey.
BMT Tax Depreciation, Bradley Beer.
CORELOGIC NEWS - MARKET TRENDS
SQUATTERS AT BAY
Clearance Rates Rise
How to Keep Squatters at Bay
Real Estate Business Journalist, Eliot Hastie
Terri Scheer Landlord Insurance.
CAPITAL CITY DWELLING VALUES
KNOW YOUR NEIGHBOURHOOD
National Capital and Regional City Dwelling
Get to know your new neighbourhood before
SECURING A PROPERTY
How to Secure a Property Before it Hits the Market Your Empire CEO, Chris Gray.
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C H A I R M A N STAT E ME N T
HOW IS WINTER SHAPING UP FOR THE AUSTRALIAN PROPERTY MARKET?
BY C H A R L E S TA R B E Y
CHAIRMAN CENTURY 21 AUSTRALASIA
As winter approaches the property market is continuing to slowdown, with values falling 0.1 per cent in the month of April. This number is even more
active real market for many reasons
significant when you look solely at
but in recent years, we have
combined capital cities. Corelogic
witnessed little seasonality in real
data shows that on an annual basis,
estate with one season seemingly
the combined capitals recorded
blending into the next. This
the first decline in dwelling values
situation often saw many agents
since late 2012. Darwin has seen
busy all year round and many
an -7.7 per cent decrease in values
sellers happy to take the plunge in
reductions and uncompleted sales.
over the last twelve months which
the cooler months.
In winter this year, less listings may
I suspect this phenomenon will
mean your property has a chance
is followed by Sydney at -3.3 per cent.
well and truly end this year with
LESS COMPETITION One of the biggest challenges of selling a property is competing against rival properties in and around the market in question. This situation can often lead to price
to really stand out. There will still be buyers around but perhaps less
In contrast, regional areas continue
many sellers choosing not to brave
to be strong performers, with
the cold in the face of moderating
competition working against you.
regional areas up 0.4 per cent in
prices but opt to showcase and sell
April and 7.7 per cent year-on-year.
during the typically busy spring
However, this shouldn’t mean you
While the country is experiencing
should immediately over price your property and expect that it will just sell yourself. And this is where
‘markets within markets’, with many
However, those people considering
areas still recording strong growth
selling right now might be surprised
numbers, a slowdown is likely
by some potential benefits of
play – a focused agent.
underway and may be compounded
selling in winter.
Here are my top three potential
An environment which sees low
when winter hits. Winter has traditionally not been an
advantages of selling this winter:
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another advantage may come into
listing levels (typical of winter) may
see many agents actively compete
first home buyers are becoming
working to ensure you property
for your business and also go the
increasingly active in the market.
will be attractive to first home
extra mile to help you attract the best price for your property. They may have a reduced client load this season which can equate to your sale having one hundred per cent of their attention. While most good agents do this already, in busier months they may be juggling many listings at the one time. This might not be the case this winter which has the potential to benefit a vendor enormously.
FIRST HOME BUYER ACTIVITY IS INCREASING
ABS Data shows that the number of loans to first home buyers rose to a five-year high in November, 2017, to account for 18 per cent of total owner-occupied home borrowings. In the last quarter of 2017, NAB analysis suggested that first home buyers accounted for almost two in five sales in new housing markets and around one in three in established markets. If you intend to sell a property that may be perfect for first home buyers due to its price
If you are contemplating a sale this
point, location or property type â€“
winter, it might be worth noting that
consider marketing it as such, while
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buyers. Consider installing modern technologies, such as Smart Home systems, and ensuring the property is safe for small children. While it is often dangerous to look to â€˜timeâ€™ the market, there may be some advantages to selling this winter depending in what market you are in. A good first step would be to review your local market (including listing and sales numbers) and speak to your local Century 21 agent to help decide whether selling this winter may hold more pros than cons for your sale.
C L E A R A N C E R AT E S R I S E A F T E R YE A R LY L OWS
CLEARANCE RATES RISE Nationwide clearance rates increased to 63.5 per cent after the lowest rate of the year the week prior at 60.3 per cent, according to new CoreLogic data.
BY ELIOT HASTIE, J O U R N A L I S T AT R E A L E S TAT E BUSINESS
experiencing the dip.
Perth was the high-end exception
Brisbane, Adelaide and Perth all remained flat with 0 per cent
for both units and houses at 7.3 per cent and 7.8 per cent, respectively.
change recorded. Houses remained slightly more popular than units, with the median time on market increasing, although
Despite the increase, the trend in
Hobart, Canberra and Melbourne
auction clearance rates shows a
yet again were the top performers
clearly downward trend, according
at 29 days, 30 days and 32 days,
to the latest CoreLogic Property
The worst performers for houses
The higher clearance rate could
were Brisbane, Darwin and Perth
be attributed to the lower auction
at 60 days, 88 days and 72 days,
volume of 2,280 auctions,
compared to the week prior with 2,577 auctions.
In Darwin and Sydney, houses performed worse than units, with
Individually, it was a slower week
the average time on market for
for new listings, with the biggest
Darwin houses being 88 compared
increase in Darwin and Melbourne
to 60 days for units; and in Sydney,
at 14.0 per cent and 4.1 per cent,
the house average was 40 days and
the unit average was 28 days.
Most of the remaining cities experienced a decrease in new listings, with Hobart having a -12.0 per cent drop and Canberra a -8.6 per cent drop. Perth fell by 5.7 per cent, Brisbane by 1.6 per cent, Sydney by 1.1 per cent, but Adelaide had a 1.5 per cent increase.
Vendor discounting across most capital cities was between 3.9 per cent and 7.3 per cent for houses and between 4.4 per cent and 8.8 per cent for units. Hobart and Canberra were the low-end exceptions for houses, at 3.9 per cent and 3.6 per cent,
Home values in the marketplace
respectively, and Melbourne was
remain mostly unchanged with
the low-end exception for units at
a -0.1 per cent dip in the week,
4.4 per cent.
with Melbourne and Sydney both C21 MARKET PULSE
The story New CENTURY 21 office expands after just two months of opening first appeared on Real Estate Business (REB). Article Link: https://www.realestatebusiness.com.au/ breaking-news/17228-clearance-rates-riseafter-yearly-lows
C A P I TA L C I T Y DW E L L I N G VA L U E S
CAPITAL CITY DWELLING VALUES National dwelling values nudged 0.1% lower in April, the seventh consecutive month-on-month fall since values started retreating in October last year according to the CoreLogic April home value index results. Similar to previous months, CoreLogic head of research Tim Lawless found that the declines were concentrated within the largest capitals, while regional dwelling values edged 0.4% higher. Capital city dwelling values were 0.3% lower over the month, driven by larger falls of -0.4% in Sydney and Melbourne and a smaller decline in Brisbane values (-0.1%). The falls were offset by flat conditions in Perth and subtle rises
BY CENTURY 21 AUSTRALIA
has slowed from -3.0% last year to
Across the most expensive quarter
-2.3% over the past twelve months.
of the market, dwelling values have
A reversal of longer term trends Mr Lawless said, “At a macro level, the latest trends are virtually the opposite of what we have become used to over the past five or so years. Regional areas are now outperforming the capitals and units are outperforming houses. Also the most expensive properties are now showing weaker conditions than the more affordable ones.” The past five years has seen combined capital city dwelling values appreciate at the annual rate of 6.8% which is almost double the annual rate across the combined regional markets at 3.5%. The past twelve months has seen capital city dwelling values fall by 0.3% while regional values are 2.4% higher.
in Adelaide (+0.1%), Darwin and Canberra (both +0.6%). Hobart was the only city where dwelling values rose by more than 1% in April. On an annual basis, the combined capitals recorded the first decline in dwelling values since late 2012, with values slipping 0.3% lower, driven by falls in Sydney (-3.4%), Perth (-2.3%) and Darwin (-7.7%). The only capital city to see an improvement in annual growth conditions relative to a year ago is Perth, where the rate of decline C21 MARKET PULSE
increased at almost twice the pace of the most affordable quarter over the past five years, up 8.2% per annum compared with 4.4% per annum. As conditions have slowed down, it’s been the most affordable end of the housing market where values have remained resilient to falls, trending 1.9% higher over the past twelve months while the most expensive quarter of properties has seen values fall by -1.6%.
SECURING A PROPERTY
HOW TO FIND AND SECURE A PROPERTY BEFORE IT HITS THE MARKET Finding and securing a property before it hits the market is becoming increasingly challenging for investors, not to mention first-time investors wanting to get a head start on the property ladder.
B Y C H R I S G R A Y, YO U R E M P I R E C E O
If you’re interested in gaining access to unlisted properties this year, here are some of my top tips:
CONSIDER YOUR LONGTERM OBJECTIVES It is important to consider your long-term objectives, particularly if you want to secure a property before it hits the market. This
Australia’s most desirable
includes your finance, family,
investment properties – those in
career and lifestyle goals. It is
the inner city, at the median price
important to prioritise these factors
for their area, and close to transport
because each one of them will
– tend to attract the strongest
inevitably impact on your long-
buyer interest and competition,
term capacity to repay debt.
and tend to sell at a higher price
the competition does is critical. With that said, if you’re looking to maximise your investment opportunities this year, purchasing a property before it goes to the market – known as a ‘silent sale’ – is an excellent strategy.
estate agents can be excellent business contacts with a reservoir of property knowledge. While you never know where these conversations may lead, asking a real estate agent tactful questions can open up some great opportunities for property purchases. The better you know the agent, the more likely you will hear about silent sales, as agents often reveal a property to their closest contacts before advertising it to the general public. It’s important to to maintain that relationship and
objective is to purchase a property access to these properties before
If you’re buying property, real
keep in regular contact, however,
than the true market value. If your at or below market value, gaining
REACH OUT TO YOUR REAL ESTATE AGENT
“If you’re buying property, real estate agents can be excellent business contacts with a reservoir
to show the agent you’re really serious.
DO YOUR HOMEWORK ON FINANCING OPTIONS When locking in a property purchase, organisation is key. The intricacies of financing a property can go much further than simply securing the lowest interest rate
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before the property goes to market.
inspector – to help you secure your
Fixed and variable rate loans each
property. A professional team will
have levels of risk and potential
help leverage your time by enabling
rewards. A fixed rate gives security
you to delegate to experts. This
and certainty, although it could also
leaves you with more time to find
incur substantial costs if you need
the investment that’s right for you.
to break the loan early. A variable rate enables more flexibility, and while this can help you save money, the repayments are at the behest of any rate fluctuations. At
ABOUT THE CONTRIBUTOR
the end of the day, your financing
Chris Gray is CEO of Your Empire, a buyer’s
solutions should be based on
agency which builds property portfolios for
factors such as your financial
time-poor people – searching, negotiating, renovating and managing property on their
position, the predicated duration of
behalf. Chris’s team buys 1-2 properties
your investment and current and
a week and often spends $5m+ a year
projected market conditions.
renovating on others’ behalf, providing a unique insight into market conditions and buyer and seller sentiment. Chris hosts
BUILD A PROFESSIONAL TEAM
“Your Property Empire’ each Friday on Sky News Business channel, where he interviews various heads of property research
If you haven’t done so already, it is
companies and major industry figures. Chris
important to build an established
is a qualified accountant, buyer’s agent and mortgage broker. For more information visit
network of industry professionals
– such as a buyers’ agent, building
au and follow Chris on Twitter:
inspector, valuer and strata
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BMT’S TOP TEN TIPS FOR TAX TIME
BMT’S TOP TEN TIPS FOR TAX TIME It’s a new financial year and therefore it’s time to start getting your income tax return in order. Preparing your annual tax return is a great opportunity to take stock of how your investment property is performing and to make sure you’re claiming everything you’re entitled to We thought we would share our top ten tips to help you get the most from your investment property this tax time.
1. CLAIM DEPRECIATION TO MAXIMISE RETURNS Any investment property that generates income may be eligible for thousands of dollars in depreciation deductions. In fact, most investors can claim an average of $5,000 - $10,000 in deductions in the first full financial year alone. Property depreciation is often missed as it is a non-cash deduction; that is, the investor does not need to spend money in order to claim it. In fact, research has
BY BRADLEY BEER, B M T TA X D E P R E C I AT I O N
shown that 80 per cent of property
properties are able to generate
investors are missing out on the
some deductions so it’s always
depreciation deductions they’re
worth enquiring about.
5. USE A SPLIT REPORT TO INCREASE DEDUCTIONS
2. ORDER A TAX DEPRECIATION SCHEDULE
Do you co-own a property? Then
A BMT Tax Depreciation Schedule
it’s usually more beneficial to
outlines all the deductions you
order a split report in order to
can claim for your property. It
maximise the returns for each
lasts for forty years and the fee
owner. To ensure that clients who
for preparing it is 100 per cent tax
co-own investment properties
are maximising deductions, it
3. AMEND PREVIOUS TAX RETURNS Investors can amend two previous tax returns to recoup any missed deductions.
is important that Accountants recommend their clients obtain a split report. A split report calculates each owner’s percentage of ownership of the assets within a property before applying
4. CLAIM FOR NEW AND OLD PROPERTIES
depreciation deductions. This
Investors who are unsure whether
accelerated depreciation and
they are eligible to claim deductions due the age of their property or the items within it should seek the advice of a specialist Quantity Surveyor*. While newer properties generally do attract higher deductions - due to the higher starting value of a building’s capital works and the items within it – most
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usually qualifies more assets for gives the owners greater returns sooner. Accountants also need to be aware that co-ownership will affect the way deductions should be calculated for assets which are eligible for an immediate write-off and accelerated depreciation.
in tax depreciation. Only a tax
6. DO YOU ONLY LEASE YOUR PROPERTY OUT FOR A PORTION OF THE YEAR? THEN MAKE SURE YOU MAKE A PARTIAL YEAR CLAIM FOR DEPRECIATION.
8. CLAIM FOR RENOVATIONS AND IMPROVEMENTS
The Australian Taxation Office
can be claimed in full in the same
10. THE BMT GUARANTEE
(ATO) allows investors to make a
financial year they are completed.
- Be confident when ordering
claim for depreciation based on
An improvement, on the other hand,
your schedule from BMT Tax
the amount of days a property was
is when you improve the condition
Depreciation. BMT offers a
available for lease. This could be
of an item or property beyond that
guarantee to all clients that if
if you’ve only recently purchased
of when it was purchased. Such
we can’t find double our fee in
on investment property and only
improvements are capital in nature
deductions in the first full financial
have one month to claim for, or
and must be depreciated over time.
year, we won’t charge for our
you use your home as a holiday
For this reason, if you’ve made any
rental for part of the year. A BMT
renovations or improvements to
Tax Depreciation Schedule makes a
your property in the last financial
partial year claim like this easy for
year, you should seek the advice of
you and your Accountant.
a Quantity Surveyor to ensure this
7. MAKE USE OF TECHNIQUES THAT MAXIMISE DEDUCTIONS EARLY
There is a difference between a repair and a capital works improvement and this will affect your claim. The full cost of repairs
is in your claim correctly.
depreciation specialist such as BMT can be relied on to maintain detailed knowledge of all current ATO Tax Rulings relating to depreciation.
*Under new legislation outlined in the Treasury Laws Amendment (Housing Tax Integrity) Bill 2017 passed by Parliament on 15th November 2017, investors who exchange contracts on a second-hand residential
instant asset write off. A Quantity
9. ENSURE YOU USE A SPECIALIST QUANTITY SURVEYOR TO PREPARE YOUR TAX DEPRECIATION SCHEDULE
Surveyor will be able to determine
Quantity Surveyors are one of the
plant and equipment assets they purchase
which assets qualify for accelerated
few professionals recognised by
and directly incur the expense for. Investors
depreciation and this will put
the ATO to have the appropriate
who purchased prior to this date and those
more money back into your pocket
construction costing skills to
who purchase a brand new property will
sooner. Read more about how this
estimate building costs for
still be able to claim depreciation as they
depreciation. However, not all
were previously. To learn more visit www.
This includes low value pooling and
Quantity Surveyors specialise
property after 7:30pm on 9th May 2017 will no longer be able to claim depreciation on previously used plant and equipment assets. Investors can claim deductions on
bmtqs.com.au/budget-2017 or read BMT’s
comprehensive White Paper document at www.bmtqs.com. au/2017-budget-whitepaper
To obtain a free estimate of the deductions available for any investment property, contact the expert team at BMT Tax Depreciation on 1300 728 726.
ABOUT THE CONTRIBUTOR Article provided by BMT Tax Depreciation. Bradley Beer is the CEO of BMT Tax Depreciation. Please contact 1300 728 726 for an Australia-wide service. https://www.bmtqs.com.au/
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H OW TO K E E P S Q U AT T E R S AT BAY
HOW TO KEEP SQUATTERS AT BAY Unwanted guests or squatters can cause considerable damage to rental properties and leave landlords with a large clean-up bill, according to leading landlord insurance specialist, Terri Scheer Insurance.
BY TERRI SCHEER INSURANCE
“Depending on the circumstances, there may be a delay between a squatter leaving the property and before the property can be re-let again, which can result in additional
cause major headaches for landlords. “If a squatter breaks into a vacant rental property and lives there illegally, it can potentially result in damage to the property and subsequent loss of rental income for landlords while the
property is occupied or not, security should be front of mind,” Ms Parrella said.
“This can be extremely costly for
“Install deadlocks on external
the landlord both in terms of repairs and the loss of rental income,” she said.
doors and fit security screens to accessible windows, as they can deter unwanted guests from breaking in. “Having an active local or back-
Manager, Ms Carolyn Parrella said be targeted by squatters and
“Regardless of whether your
costs for the landlord.
Terri Scheer Insurance Executive unoccupied rental properties can
“WE HAVE SEEN SITUATIONS WHERE A SQUATTER HAS BROKEN DOORS AND WINDOWS TO FORCE ENTRY INTO A PROPERTY”
to-base alarm system in place can also help keep your property secure while it is vacant.”
VISIT THE PROPERTY REGULARLY “Landlords should formally conduct a final property inspection when a tenant leaves the property,” Ms Parrella said. “Outgoing condition reports with
damage is being repaired.
supporting photos and videos can
“We have seen situations where
be used as evidence if there are any
a squatter has broken doors and
further outstanding issues once the
windows to force entry into a
Ms Parella said there are a number
tenant has vacated the property.
property, punched holes in walls,
of preventative measures that can
ripped up carpet and sprayed
be put in place to reduce the risk of
“If the property is vacant for an
squatters at your rental property.
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extended period of time, make it a priority to visit regularly to ensure it
remains in good condition. “Consider hiring a gardener to regularly maintain the exterior of the property. “Long grass, excess leaves covering pathways and overgrown foliage can make it obvious that the property is unoccupied, and may make the property an easy target for squatters.”
“Installing automatic motionsensors or timed lighting systems are a good idea for landlords, as they will give the impression that someone is home when the lights turn on.” “Clearing old newspapers in the front yard and uncollected mail are a simple way of preventing the home looking unoccupied.
MAKE THE PROPERTY LOOK LIVED IN
“Landlords may also want to tell a
“Unwanted guests may scope
out properties that look empty to occupy,” Ms Parrella said. “If your property is vacant, it’s best to give the impression the property
trusted neighbour that the property is vacant while a suitable tenant is
“They can keep an eye on the property and alert you to any suspicious behaviour.”
APPROPRIATE LANDLORD AND BUILDING INSURANCE “A good landlord insurance policy should protect landlords against malicious damage to the property, such as damage to carpets or blinds,” Ms Parrella said. “However, damage to the building itself may be at the landlord’s expense unless they have a suitable building insurance policy in place. “Building insurance may offer protection of a landlord’s rental income if the property is damaged and can’t be tenanted for a period of 1 week up to 52 weeks. “If you’re concerned there’s a
is being lived in to keep squatters
squatter living at your rental
property, contact the police immediately.”
ABOUT THE CONTRIBUTOR The information contained in this article is intended to be of a general nature only. Terri Scheer does not accept any legal responsibility for any loss incurred as a result of reliance upon it. Insurance issued by Vero Insurance. Read the Product Disclosure Statement before buying this insurance and consider whether it is right for you. Contact Terri Scheer on 1800 804 016 or visit our website at www. terrischeer.com.au for a copy.
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KNOW YOUR NEIGHBOURHOOD
GET TO KNOW YOUR NEW NEIGHBOURHOOD BEFORE BUYING There are several features about an individual property that can influence your decision to purchase it. It is for this reason that many prospective buyers will visit numerous properties, and then a property of interest on a few different occasions, before finalising their purchase decision. And while the attributes of a home are very important, so too is the area in which it is situated. After all, they don’t say ‘location, location, location,’ for nothing. The area surrounding a home, including physical landscape, and access to public transport and lifestyle facilities, can have a sizeable impact on how suited a property is to your needs and situation. Location should therefore be considered to ensure your purchase is a successful one. There are a number of different ways by which you can look to investigate a suburb of interest. One such method is to visit the
area at different times of the day
individual features of a home,
and night and over a weekend. This
as well as the area in which it is
will give you an indication about
located, buyers can better ensure
the traffic the area experiences, for
that their property purchase is a
example, in morning and evening
successful one. By investigating
peak hours. It will also help you
elements such as accessibility
to see if the area is a busy one,
to public transportation, lifestyle
and give you some idea of the
amenities and the general feel of
demographics of the residents who
an area, buyers will likely be able to
live in the area.
form a more holistic opinion about a
If access to public transportation
is important to you, such as for
For more indepth information about
travelling to work, you may like to
properties available for purchase, as
test out the area’s various services
well as regarding an area of interest,
before committing to a purchase.
please feel free to contact your
This might include driving to
local CENTURY 21 real estate office
your area of interest one day and
for professional, expert advice.
catching a bus or train to and from work – as though you live in the area. This should help paint a picture of travel times, conditions and accessibility to you. If lifestyle is an important consideration for you, you might like to visit a local dining precinct and investigate an area’s restaurant, café, and pub and bar offerings to see what you would be able to enjoy if you were to live in the suburb. All in all, by considering both the
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