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PUBLISHER Century 21 Australia Pty Ltd

M A R K E T P U L S E

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CONTRIBUTORS Charles Tarbey Tim Lawless Eliot Hastie Chris Gray Bradley Beer

EDITORIAL ENQUIRIES Century 21 Australia (02) 8295 0600

ADVERTISING ENQUIRIES Century 21 Australia

WELCOME TO

THE MAY 2018 ISSUE OF

C21 MARKET PULSE

(02) 8295 0600

DISCLAIMER We have in preparing this information used our best endeavours to ensure that the information contained therein is true and accurate, but accept no responsibility and disclaim all liability in respect of any errors, inaccuracies or misstatements contained herein. Prospective buyers and sellers should make their own enquiries to verify the information contained herein. All information contained in the CENTURY 21 Australia Pty Ltd website is provided as a convenience to clients. All links to property prices displayed on the website are current at the time of issue, but may change at any time and are subject to availability. For more information on our Privacy Policy please refer to: www.century21.com.au/privacy


C O N T E N T S M A Y

CHAIRMAN STATEMENT

02-03

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TAX TIME TIPS

Australian Property Market in Winter

BMT’s Top ten Tips for Tax Time.

Century 21 Chairman, Charles Tarbey.

BMT Tax Depreciation, Bradley Beer.

CORELOGIC NEWS - MARKET TRENDS

04

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

05

KNOW YOUR NEIGHBOURHOOD

National Capital and Regional City Dwelling

Get to know your new neighbourhood before

Values

buying

SECURING A PROPERTY

06-07

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

selling season.

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.

AGENT SELECTION

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 –

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 ‘time’ 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

respectively.

Market Indicator.

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,

respectively.

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

respectively.

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

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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

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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

www.yourempire.com.au, www.chrisgray.com.

– such as a buyers’ agent, building

au and follow Chris on Twitter:

inspector, valuer and strata

@ChrisGrayEmpire.

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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.

entitled to.

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

deductible.

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

service.

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

works.

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

INCREASE SECURITY

“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

graffiti throughout.

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

found.

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

at bay.

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

potential property.

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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