No surprises with interest rates.

The property market will continue its steady course following today’s announcement by the Reserve Bank of Australia to keep interest rates on hold, leading real estate network LJ Hooker said.

The Spring selling season has had an encouraging start in most Australian markets as buyers look to upgrade their existing home and investors seek out rental opportunities.

LJ Hooker Chief Executive Officer Grant Harrod said the RBA’s policy of stability over the past year has aided the economy by offsetting the fall in mining investment. Interest rates are likely to remain on hold until the end of 2015.

“Economic growth should remain at trend levels over the next two years which is partly due to property, including residential construction,” Mr Harrod said.

“It has been an encouraging start to the Spring market and while buyers are aware rates won’t stay at historic lows forever, like investors, there is continued confidence about the market which is reflective of the stability in policy.

“However, while markets such as Sydney and Melbourne have performed well, there are many other markets which have softened or experience more modest results.’’

Demand for property in Sydney and Melbourne has continued to drive prices at the start of the Spring market. While stock levels have risen in the past few weeks, demand is stronger resulting in fierce competition.

LJ Hooker National Research Manager Mathew Tiller said there are a number of indicators the RBA will be monitoring such as inflation and employment to determine which action to take.

“It is definitely not one way or the other,” said Mr Tiller. “The most likely outcome is that the market will continue to enjoy this period of stability.

“Any major rise to unemployment or a significant softening in business investment could see interest rates actually fall again.”

While the RBA is considering measures to slow down house price growth, Mr Tiller warned it risks having a negative impact on residential construction which is crucial for the economy.

“Off-the-plan sales continue to be strong and are driving strong levels of construction, helping the boarder economic outlook. Any changes could do more harm to the economy than good,” Mr Tiller said.

Market’s price growth rate has peaked: LJ Hooker

The rate of price growth in the housing market has peaked, with prices to grow modestly over the fourth quarter and beyond, according to LJ Hooker’s Buyers’/Sellers’ Market Index.

Sellers were in favour over the third quarter, but now it’s buyers that may be given the upper hand.

In New South Wales, Victoria and Queensland, the third quarter recorded the ninth of favourable selling conditions. This is indicated by statistics that show sales outstrip listings.

Meanwhile, in Western Australia and the ACT the markets remain balanced, while Tasmania has been in favour of buyers.

While sellers were still in favour in the third quarter, LJ Hooker national research manager Matthew Tiller said that it was important to note that the index was a record result for sellers and may have reached its peak.

“According to the ABS [Australian Bureau of Statistics], the rate of growth of finance commitments peaked in the second quarter after considerable growth over the last three years,” said Tiller.

“As price growth returns to a more sustainable level and listings come on to the market for the spring and summer selling seasons, we forecast a gradual shift back towards a buyers’ market,” he said.

Western Australia, Tasmania and ACT offer immediate future and opportunities for house growth, according to LJ Hooker head of real estate Christopher Mourd.

“LJ Hooker’s network of offices are commonly reporting that many owners are viewing the low interest rate environment as an opportunity to upgrade,’’ said Mourd.

“However, many won’t commit to listing their home until they’ve found their next home. This preference has created a shortage in supply, and heavily weighted the index in favour of sellers going to market now,” he said.

download

 

 

 

 

 

 

Source: LJ Hooker, Article: Property Observer

What does the ‘unbelievable’ boost in employment mean for the property market?

Some surprising set of news last week as the Labour Force data showed total employment leaping by an outlandish 121,000 in the month of August, the greatest net gain in the history of the data series which runs all the way back to 1978.

Most of the gains were of the part-time nature, reported full-time employment increased by 14,300 and part-time employment by 106,700.

Of course, the data represents only a survey and therefore the results are necessarily volatile and should not be taken too literally. The huge variance against expectations will do little to enhance the credibility of the survey’s accuracy.

Nevertheless, such a large gain in employment must be reflective of at least some good news in the economy.

Read more here

The RBA has continued its ‘wait and see’ approach leaving interest rates unchanged, at the record low of 2.50%, during its August meeting.

The Reserve Bank of Australia’s decision to keep a “wait and see” approach to interest rates is good news in the lead up to the busy spring selling season, according to the nation’s biggest real estate network LJ Hooker.

Chief Executive Officer, Grant Harrod said today’s announcement to leave the cash rate unchanged at a historic 2.5 percent will keep mortgage repayments affordable and investor demand strong.

“It’s a finely balanced domestic economy that has made the RBA reluctant to shift its current ‘neutral’ monetary policy position,” he said.

“It now looks likely interest rates will remain on hold for the rest of the year, barring any unforeseen events and it should boost consumer confidence as we approach spring.

“There is some speculation rates could be dropped even further if the Australian dollar remains high.”

Read more here

Darren Palmer remains ambassador for myLJHooker.

In a coup for LJ Hooker The Block’s Darren Palmer has re-signed as ambassador for myLjhooker.com for another 12 months.

Mr Palmer who came on as the face for Australia’s leading property library last year has committed to work with the brand until the end of 2015.

“I am extremely happy to be working with LJ Hooker. I love real estate and really enjoy providing information around improving a client’s home from my personal experiences,” Mr Palmer said.

“I am so impressed with the way LJ Hooker are helping and educating their customers through myLJHooker, and it is a real honour for me to be part of this great network.”

According to Marcus Freeman, director of myLJHooker the re-signing of Darren Palmer is a real coup for the brand and is a testament to the quality of property library.

“There is a new Block TV series hitting our TV screens on Channel 9 in the coming months, and Darren will also be central to future marketing campaigns that are currently in the works”, said Marcus Freeman, Director of myLJHooker.

“A huge congratulations goes out to all the offices who have embraced Darren and the new myLJHooker…the results have been brilliant!”, he said.

Enjoy Darren’s exclusive articles every month here and don’t forget The Block: Glasshouse starts Sunday 6.30pm on Channel 9.

DP-02.jpg

Can cosmetic renovations really make money? Q&A with Cherie Barber

A portion of property investing is often related to creating equity in a property – through developments, subdivisions and even renovations.

It’s unsurprising, especially with shows such as The Block and House Rules, that renovating is a much discussed aspect of real estate for both home owners looking to improve their properties, and investors looking for bang for their buck.

Property Observer’s Tuesday Q&A is with Renovating for Profit’s Cherie Barber,  where they ask about essential renovation skills, the experts you can’t do without and whether you can really make money from a quick cosmetic fix up.

Interview here.

 

Can cosmetic renovations really make money? Q&A with Cherie Barber

NEW FINANCIAL YEAR BUT NO CHANGE TO RATES

The Reserve Bank of Australia’s decision to keep interest rates at historic lows today is unsurprising as it tries to balances the economy, according to leading real estate network LJ Hooker.

LJ Hooker’s Chief Executive Officer, Grant Harrod, said the start of a new financial year, combined with the traditionally quieter winter market, made any immediate changes unlikely.

“The continued stability of rates will give buyers extra confidence, even with speculation an increase will eventually come,’’ he said.

“We have seen property price growth soften as the market heads into winter but, even still, demand is strong as seen in the volume of sales and auction clearance rates around Australia’s various markets.’’

LJ Hooker National Research Manager Mathew Tiller said local inflation remains within its target band of two to three percent while unemployment levels remain stable at 5.8% despite concerns about the retail and mining sectors.

International economies, however, could start to have an impact here and possibly lead to even lower mortgages.

“In the US and EU, rates are set at close to zero and are not expected to move till mid-2015, while the risk of deflation in Europe has seen the European Central Bank introduce negative interest rates for bank deposits,” Mr Tiller said.

“Major lenders here may look to tap into this cheap source of debt.”

Mr Harrod said the driver behind the ongoing decision to keep interest rates stable at its historic low of 2.5% is the consistent balance of the economy in the wake of the offset in mining and resources investment.

“The ongoing lack of housing stock is continuing to keep the market buoyant and demand remains in place across all price points,” Mr Harrod said.

“Demand is particularly strong from investors looking for off-the-plan apartments in major CBD locations.”

An apartment with no bedroom listed for $2.6M

It has a walk-in wardrobe and separate kitchen, but $2.6 million doesn’t stretch far enough to get a separate bedroom in this apartment.

The 87sqm apartment on West 12th Street, in the West Village New York only has three rooms — a grand room, which has a bed in one corner and lounge area, a bathroom and a kitchen.

While there is no separate bedroom in the apartment which costs more than $30,000 a square metre, there is a substantial walk-in wardrobe.

To put it in perspective at Kurraba Rd, Neutral Bay in Sydney a three-bedroom apartment is listed for offers over $2.55 million.

Read the full article here: Daily Telegraph

641939-6f2f3750-fcde-11e3-9463-539ac6ca705b

The End of Financial Year.

The end of financial year is a rare chance for property investors to try and claim back some hard earned capital from the tax man. As such, today we discuss tax depreciation…

What is tax depreciation?

As an investment property owner you’re entitled to claim depreciation on your property and its fixtures & fittings. Claiming depreciation is a significant tax benefit, and one which many investors are unaware of. Depreciation is a non-cash deduction – you do not need to spend any money to claim it.

What is property depreciation?

As a building gets older and items within it wear out, they depreciate in value. The ATO allows investors to claim a rental & investment property depreciation deduction related to the building and plant and equipment items contained within it. There are more than 1,500 items identified by the ATO as depreciable assets.

How do you claim these deductions?

In order to claim depreciation deductions, enlist a Quantity Surveyor to complete a comprehensive, personalised tax depreciation schedule. A depreciation schedule outlines the deductions available on a specific property for the life of the property and is used by your accountant when preparing a tax return.

To learn more about what depreciable items you may be able to claim, click here.

To organise a depreciation schedule from our friends at BMT Tax Depreciation Quantity Surveyors, click here.