Investing in property can be both hard and daunting, especially if you are looking at becoming a first home owner. Like everyone else before we make these life changing decisions we turn to those closest to us for advice, and dare we say it sometimes their advice can be a little bit askew. So before you take the plunge have a read of a few of our pointers to help guide you in the right direction.
Queensland has started to see some upward changes in the property market of the last 6 months and this is due to:
Increase in jobs
Cost of living contained
Increase in interstate migration outweighs home loan approvals causing rentals and prices to grow
TIP 1: Buy in a popular, central location
When purchasing always look at investing in prime, central neighbourhoods. If you have to, always chance the property and not the location, because where the property is located is the key to your success. Definitely avoid locations that are dependant on a single industry as it can be fairly risky; if the industry fails, everything related topples as well
TIP 2: Active or passive investment?
First consider how much time, effort and money you want to invest in on an ongoing basis when looking to buy. When you buy property it is not an asset you can just forget about: to a certain degree you will always need to be involved with the management of you property, even if you choose to appoint a property manager. Yes the maintenance and upkeep of an apartment with an on-sight manager is going to call for less involvement then a large house that is going to demand ongoing upkeep. Always consider this when you begin planning your property investment.
TIP 3: Strong rental market
Ideally when looking to invest you want to buy in a suburb where the level of rental listings and vacancies are low, and the demand for rental homes is high. Generally if the vacancy rate is high (above 3-3.5%) it is considered to be weak which may affect your ability to rent. Always look for suburbs that have at least 30% of local residents renting to ensure a steady stream of renting potential.
TIP 4: Look for the ability to add value
Dozens of strategies can be used for investment properties to add value and ensure you get ahead. Through simple or elaborate renovations, many investors manufacture price growth by helping to improve the property’s intrinsic value and assist in rental return. A few simple cosmetic changes to a house can increase the value, whilst property bought on large land has the opportunity for future development.
This post by no means gives you all the answers to a successful investment but it can assist in planning and ensuring you are making the right decisions. Investing in property in Australia is essentially a business decision and should always be treated with care and well thought out plan and strategy.
Architects; the people who bring amazing cities to life with their artistic and creative flair to the buildings and structures that make up our urban jungles. It is a career (or to architects, a lifestyle) that gives individuals the autonomy to experiment and creatively express their ideas through pursuing the artistic embodiment of project parameters. When travelling, different aspects of a foreign country appeal to different people. For some it is the people they meet, the food they taste, the history or culture that make up a community; for me it is the buildings. From the size and dimensions of a building, right down to the minute details in the lighting and intricate interior details.
Bar Harbor is a town along Maine’s Frenchman Bay on Mount Desert Island. When walking the streets of this town that is like something out a fairy tale, it allows us to slow down and appreciate the world and life we live in. The architecture of this entire town works brilliantly with the natural surroundings of the mountains and ocean, seamlessly blending the history of the town for tourists and locals. Surrounded my hills and mountains, the setting of this town can range from glistening sunlight to thick fog and mist; it is a lifestyle, an inspiration and a unique place. One guy who has found his muse and inspiration from this incredible town is an artist by the name of Sam Shaw. An artist by nature and builder/ architect by hobby, he skilfully brings his drawings to life creating a real life set like something from a Tim Burton film.
Nestled in the village of Islesford on Little Cranberry Island, anyone who stumbles across his works of art would think they stepped into what would seem like a fictional novel that we use to read as children. Think Hans Christian Anderson, a small cottage from one of his stories shielded from the elements by the surrounding trees with a tiled pointed roof that fits like a hat on a cottage with large arching windows, a faint glow illuminated from the fireplace inside, stone paths winding through the thick of the forest under arching timber entrances; this is the scene Sam creates with his work. From overhanging lamps perfectly placed on surrounding trees, to the impossible yet quirky lopsided twisting houses, his ability to essentially bring what would seem like a child’s drawing of a house to reality is second to none and inspiring. His works of art take you on a journey and brings out the inner child in all of us. Bar Harbor and the works of Sam flawlessly go hand-in-hand, taking anyone who has the privilege to experience this special place on an incredible journey.
Inspiration and influence come in all forms, at any time. It happens with the music we hear; the people we meet; the culture and city in which we choose to surround and immerse ourselves in. Travelling the world pushes our imagination as we are taken out of our comfort zone and learn to see the world under a different light. History and culture help shape a city with these influences present in the architecture and urban planning. I love taking these newly discovered designs as inspiration and investing them into future projects.
My latest travels to the States saw Boston take the stage and boast its many delights and hidden treasures, and as expected it did not disappoint! The redbrick Boston homes nestled along tree lined streets showcase the architectural combination of mother nature vs man. Many of the homes exterior elaborately covered in vines as if mother nature herself was the designer. As one of America’s oldest cities, it is a perfect example of new meets old as the history and the remnants left behind blend with ease into a very modern, fast-moving city; a splendid balance of old characteristics with a modern twist.
Every day Boston sends you on a journey, it lets you step back in time to the earlier days of America. A beautiful city soaked in historical buildings and venues alongside gleaming high rises as you get lost in the beauty of it all. The thought and strategy implemented in the urban planning of this city is second to none; from the preservation of the cities rich heritage and architecture to the unique neighbourhoods and public green spaces. Although it is an intertwining maze of terrace homes, high rises, retail, transport and nature, each building, structure and object stands alone adding it’s own unique touch to Boston’s canvas.
Retired? Treat yourself to living in the Sunshine State. Now is the best time to get into the property market in Brisbane. Choose from one of our luxurious apartments a stone’s throw away from Brisbane CBD.
Brisbane is Australia’s New World City. Its proximity to Asia and a progressive and open business environment makes Brisbane a city of choice for doing business in the Asia Pacific region. Key locality benefits include:
- closest capital city on eastern seaboard to Australia’s three largest export markets – China, Japan and South Korea
- similar time zone to the major trading nations of South East Asia
- Brisbane Airport is conveniently located less than 20 minutes and 12 kilometres from the city centre
- The Port of Brisbane is one of Australia’s largest-growing container ports and Queensland’s largest general cargo port
- international Networking opportunities with Council’s sister cities
Below are some featured projects that will help take Brisbane to new heights.
1. Queen’s Wharf (Above And Below)
Queen’s Wharf Brisbane is set to attract new visitors and investment as it reconnects the activity of Brisbane’s defining parts of the city like the Botanic Gardens, the Queen Street Mall, the Cultural Precinct, South Bank, the Parliamentary Precinct and the Brisbane River.
It is being delivered by Star Entertainment Group , Far East Consortium (Australia) and Chow Tai Fook Enterprises in order to facilitate the planning and delivery of the Queen’s Wharf Brisbane Integrated Resort Development, and is expected to create more than 2000 construction jobs and 8000 ongoing employment opportunities when the Integrated Resort Development is operational in 2022.
Queen’s Wharf will include:
- Five new hotels– including premium brands like the Ritz-Carlton
- Three residential towers
- A new department store
- About 50 food and beverage outlets
- A riverfront moonlight cinema
- A Queensland Hotel and Hospitality School in partnership with TAFE Queensland.
The development is expected to deliver $1.69 billion annual increase in tourism and 1.39 million additional tourists per annum, along with $4 billion to the Gross State Product.
2. Northshore Hamilton (Below)
Owned by Economic Development Queensland (EDQ), Northshore Hamilton is Brisbane’s largest urban renewal precinct, spanning 304 hectares and will have an important role to play in helping the city position itself for the future.
In the next 20 years, Northshore’s primarily industrial area will be transformed into a $5 billion vibrant riverside precinct over the next 20 years. It will cater for 15,000 residents and become an employment hub for about 15,000 workers in retail precincts and office parks.
Northshore will include 2.5km of dedicated riverfront, with a mixture of parkland and community space. These spaces will complement the combination of residential, retail and commercial opportunities on site.
The initial works on this project have included 700 apartments across five towers and also include retail and commercial space.
3. Brisbane Airport Redevelopment (Below)
Brisbane Airport Australia is currently on the way to delivering the country’s best runway system with the $3.8 billion New Parallel Runway Project (NPR) for Brisbane Airport. While the airport has about 100 other projects in the works for the next 10 years, this NPR is considered the biggest aviation project in Australia.
Building the NPR will involve utilising 360 hectares of marshland by pumping 11 million cubic metres of sand onto the site. Over time and with the help of 330,000 wick drains funneling the water to the surface, the weight of the sand will create a solid base for construction on the runway.
The runway’s pavement will be 3.3km long, 60m wide and will have 12km of taxiways. It will create 2700 construction jobs to complete by 2020.
4. Howard Smith Wharves (Below)
The Howard Smith Wharves project covers a 3.43 hectare riverside precinct that will connect the New Farm Riverwalk and the CBD and revitalise Petrie Bight
The project is intent on respecting the area’s heritage and will incorporate the heritage-listed buildings into the redevelopment. The new parkland will also enable a pedestrian and cycle connection through the site to link the city centre with Riverwalk at New Farm.
Events such as cultural and food festivals will be hosted at the exhibition complex, which will include restaurants and bars.
The Howard Smith Wharves project’s key features include:
- A dining, retail and tourism centre utilising the existing heritage-listed buildings
- New public open spaces that may be used for markets and festivals
- A 64-room, five-star Art Series boutique hotel
- A hotel facade that blends into the cliff face with natural tones and textures to keep the iconic Story Bridge as the main focus
- Underground carpark for about 350 vehicles
- A 1500sqm exhibition space.
HSW Nominees is undertaking the revitalisation of Howard Smith Wharves.
5. Brisbane Quarter (Below)
Located at 300 George Street and developed by Taiwan’s Shayher Group, Brisbane Quarter is the city’s first integrated, world-class mixed use precinct.
Brisbane Quarter encompasses a complete city block with Brisbane River views and will include Australia’s first purpose-built W Hotel, two levels of riverside dinning and luxury retail shopping beneath a 40 storey Prime Grade office tower, as well as an 82 storey luxury residential apartment building.
Tenants of the hotel will have direct access to Brisbane Quarter’s food and beverage precinct with alfresco dining overlooking the Brisbane River, some of Brisbane’s most exciting bars and restaurants, spa facilities and a rooftop park land.
The retail portion of Brisbane Quarter will likely attract international and interstate visitors and become a high-profile location opportunity for locals looking for a signature destination.
6. Brisbane Metro (Below)
While still in its early stages, the Brisbane Metro Subway system was a commitment by Brisbane City council to provide a reliable high-frequency transport system that will reduce CBD bus congestion, cut travel times and allow for the redirection of buses to improve services in the suburbs.
Brisbane Metro would run on a dedicated route linking Woolloongabba to Herston, utilising sections of the South East and Inner Northern Busways, and would remove up to 200 buses per hour in the morning peak from the Victoria Bridge.
When complete, the metro would be able to carry up to 30,000 passengers per hour and will run every two minutes, providing seven kilometres of safe, reliable, smooth and quick travel from Herston to Woolloongabba.
7. Brisbane Live (Below)
Brisbane Live is Australia’s response to New York’s Madison Square Garden in New York City, as a 17,000 seat world class arena which will showcase international superstar concerts and performances as well as world sporting events.
The complex will be built above Roma street rail lines and would make use of public transport facilities making it accessible to everyone in Brisbane.
Brisbane Live’s masterplan, which belongs to AEG-Ogden, a subsidiary company of AEG and the world’s largest entertainment venue operator, revealed that it will feature a sliding front wall that opens to reveal live acts on stage, and the $450 million arena will also include a 4000-capacity rock club and be surrounded by multiplex cinemas, restaurants and bars, and a giant screen and amphitheatre catering for around 15,000 people.
The Lutwyche Project is finally complete and open for RENTALS.
It consists of 31 Apartments nestled in the inner northern suburb of Lutwyche located within 5km of Brisbane CBD. These luxury set of units boasts quality and elegance, perfect for the young professional.
Are you a young working professional looking for a pad to call home and but not have to travel too far for work and social life. This is the perfect place for you.
Zephyr is located at 38 & 42 Lowerson Street, Lutwyche. The project consists of 31 Apartments, mostly 2 bedroom 2 bathroom single car accommodation. Zephyr is nestled in a quiet street on top of the hill at Lutwyche – a stones throw from all the amenities. The property catches wonderful breezes (and thus the project name) and is located within 200m of the new Lutwyche Busway Station and is in an infrastructure hot spot. The property has direct pedestrian access to the Centro Lutwyche Shopping Centre 75 metres away, and is close to the Brisbane Airport link tunnel, Clem 7, parks, bikeways and schools.
It is centred around Lutwyche Shopping Village and other commercial developments on Lutwyche Road, part of a major traffic route linking the CBD with the northern suburbs and Bruce Highway. Residential development in the suburbs consists of a mixture of character housing and low rise apartment buildings of various ages and quality. In recent years, as with most inner suburbs, Lutwyche has undergone significant rejuvenation with the construction of further multi unit and townhouse developments, and the construction of the Lutwyche Busway Station and the transport link tunnel. The area is within walking distance of railway stations at Albion and Wooloowin.
For more information on how to rent one please contact us.
By Nila Sweeney
Saving is never an easy thing to do and saving for a deposit on a home is twice as hard. However, with the right strategy in place, your savings can grow and grow, cutting the waiting time to your own home in half.
In recent years house prices have skyrocketed, making the size of the deposit required for most home buyers substantially larger and just that much harder to get together. As a result homebuyers need to be shrewder when it comes to their saving and banking habits.
There are two ways to save your deposit faster: Save more or spend less. It’s that simple. Here are some ideas to get you started on the path of home ownership.
Work out your budget
The hardest thing about saving is doing it systematically. You don’t mind putting your spare change in a jar each week but it’s very hard to motivate yourself to save for a deposit because it usually means giving up things that you like. The key here is to budget sensibly by putting together a realistic savings plan that doesn’t compromise your family’s lifestyle too much.
This step shouldn’t take too long – a couple of hours at most. Work out your monthly income and expenses. Estimate your regular expenses such as transport, groceries, lunches, childcare and so forth. Don’t forget any debts, which you may be carrying including credit cards, car loan or anything else that you have to make a repayment on.
The hardest part is identifying and cutting out unnecessary expenses. Work out what luxuries you enjoy that you can reasonably afford to give up. You don’t realise how much money you waste on consumer goods that do not really add value to your lifestyle. Think about things such as newspapers, coffee, lunches, snacks and a million other things that you waste your money on. Add it up and you’ll be shocked.
You don’t want to give up everything but even cutting back on say a newspaper (read it on the net), bringing lunch from home three times a week, avoiding the chocolate bar (it’s fattening anyway) and reducing your alcohol intake by one drink a night means you will save about $2700 a year. Cut out the coffee break and a packet of cigarettes a day there’s another $3500 a year just there. Not bad for just a few slight changes in your spending habits. And you’ll be healthier too.
Manage your debts
There is no doubting the convenience of credit cards when you are running a little short. They’re handy to use and accepted almost everywhere. While it’s surprising just how easy it is to get one, it’s not so surprising to understand that there are a lot of people out there that cannot manage and reasonably afford to use a credit card.
But do you really need one? If so, how many are you using? And what about personal loans, car loans and interest free purchases? Face it, without credit you wouldn’t own half the stuff you do but on the plus side, think about how much bigger your deposit would be if you hadn’t spent all that money on consumer goods.
Remember, you can’t save effectively if you are paying off debts. So cut down on those credit cards, consolidate your debts and do everything you can to become debt free. For tips on debt management see our article “xxx” starting on page xx.
Sort out your banking
It’s a commonly known, though rarely thought of, fact that most banks charge fees on most of their accounts. The most popular form of saving for first homebuyers just starting out, is to open up an at call deposit account. These are available from most traditional lenders, such as banks, building societies and credit unions.
The advantage of at call accounts is that your money is available whenever you want it. Avoid putting your money away in just any bank account. While it’s great to choose an account which pays a good interest rate, there are other factors like account keeping fees, transaction costs, when interest is calculated and accessibility that you should also consider.
|FIVE THINGS TO KNOW ABOUT BANK ACCOUNTS|
|Interest calculated daily – Make sure the interest in your account is calculated daily. Some bank accounts still pay interest on the monthly balance, which really means you will get interest calculated on your minimum monthly balance.
Interest paid frequently – The more frequently interest is paid, the better the return on your savings. This is because the interest ‘compounds’ or accumulates on itself.
Don’t fall for stepped accounts – Many banks have deposit accounts, which pay the full interest rate on every dollar in your account. This is good. Some however offer different interest rates on different portions of your account and should be avoided unless you can be sure that you will always have a balance big enough to attract the highest interest rate.
Fees and charges – Fees and charges for writing cheques, making deposits or withdrawals all add up. Look for an account which is free of charges or which allows a number of free withdrawals each month.
Transaction accounts – If you’re likely to make a number of transactions each month what you really need is a transaction account with low or nil charges.
When you are ready to do some serious saving
Once you have saved a few thousand it’s time to move to the next stage of your saving strategy – the term deposit. While you don’t have the same access to your money as you do with at call accounts, the interest rate is better which means you are saving up for that magical home loan deposit a whole lot faster.
These accounts typically offer a fixed interest rate for a fixed deposit amount over a fixed term. What this means is that you put your money into an account and effectively leave it there for an agreed term – anything from seven days to five or more years. You are able to access it if you really need the money but generally you only have access at the expiration of the term.
|BENEFITS OF TERM DEPOSIT ACCOUNT|
When you are saving remember that every little bit counts. A good saving strategy is like a marathon, it doesn’t matter what you do in the short term as long as you finish the race – save sufficient deposit to buy your own home. Here are some trips to help you save more effectively:
- Develop a budget and savings strategy
- Start as early as you can. The sooner you start, the more time compound interest will have to kick in and help build up your savings
- Every little bit counts so make sure you maximise your opportunities to save
- If you are renting, try to get out of rented premises as soon as you can. Rent is wasted money
- Try and save at least 20 per cent of the purchase price so you can avoid paying lender’s mortgage insurance
- Make sure you have a demonstrated savings history – lenders will not lend you money if they don’t know you are responsible when it comes to finances
- Pay off your debts. Yu can’t save if you are paying of other loans
- Give something up that you don’t really need. Work out ways to save small sums of money regularly and add them to your savings. If will help establish a savings history and boost your savings
- Find the right account. Remember you can get better returns over a mid-long term period of time with non-banking financial institutions but must balance risk against return – and you may not get a positive return.
- Share returns historically outperform other investment types over time but are volatile and may have large establishment fees. If you have time before you buy, it’s an option worth considering
PARENTS HELPING THEIR CHILDREN
There’s nothing more satisfying to a parent than being able to give their child a head start in life. With house prices going through the roof, it’s a big ask to expect parent to stump $50,000 or even $50,000 in cash to help their children buy a place of their own.
But what if the parents had started putting a little bit aside from when the child had been born? Just imagine how much could have been saved in all that time. The illustration below says it all:
Initial investment amount – $1,000
Additional monthly amount – $100
Terms: 10, 20 and 30 years
Investment: 5 per cent (cash); 10 per cent (growth assets)
Tax and inflation: N/A
|Return (5%)||$31,788||$67, 279||$125,089|
First homeowners grants
Most first homeowners are eligible for the First Homeowners Grant of $7,000 tax-free and that’s a nice bit of help in anyone’s language. The requirements are fairly simple:
- You can’t have received the grant before
- You must be at least 16 years old
- You must be an Australian citizen
- You can’t have previously owned a residential property; and
- You must occupy the home as your principal place of residence within 12 months of settlement or construction.
There may also be other state scheme’s you might qualify for, so ask about those too. For example, in New South Wales, you may be eligible for the First Home Plus initiative, which provides substantial exemptions or concessions (on a sliding scale) on stamp duty, so they’re worth checking out. Check out our stamp duty calculator to see how much you may need to pay.
Parents and family
Parents and family are usually a good source of assistance, whether monetary or otherwise. Parents or other family members may be able to help you get a deposit together either by way of gift or interest-free loan. Even a few thousand will be a tremendous advantage to your savings strategy so never scoff at a helping hand.
Another tangible way family can help is by providing you with rent-free accommodation. For example, if you are paying $300 a week in rent, 3 years of rent-free accommodation adds up to $46,800. This is a gift worth its weight in gold so if you have the opportunity to take advantage it, do it.
If you don’t have the advantage of rent-free accommodation, there’s something almost as good. It’s called house sitting and it allows you to live in and maintain another person’s home in their absence in return for (normally) rent-free accommodation.
A typical arrangement may last from a few days to a few weeks through to 12 months or even a few years. The cost to you is minimal – worked out on a case by case basis –
and may involve you having to look after the owner’s pets or garden. Usually you only have to pay the standard utility bills (electricity, gas, phone), or for longer arrangements some of the long-term bills such as council rates and water rates and perhaps a token rent.
You will be required to pay a deposit which is refundable when the owners return to their home – provided of course that it is in the same condition they left it. Many houses are in beachside suburbs or the better parts of town and it doesn’t get any better than that.
If you are interested in house-sitting or learning more about house-sitting opportunities, you can get more information from the following services:
- Housecarers House Sitting Directory by telephone 1800 502 502.
- Peoplebrokers: www.peoplebrokers.com.au or via telephone on (03) 9826 6800.
- Happy House-sitters: www.happyhousesitters.com.au, and
- Housesit World is a world-wide online directory for house-sitters: www.housesitworld.com.au
If you want to really get ahead in saving a deposit you need to everything you can to save. This may mean cutting down on your expenses, moving in with your in-laws and even getting a second job. There’s no easy answer to the question but if persevere you’ll be years ahead that if you didn’t do anything.
Whether you are looking to buy your first home, move home, refinance, or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork – plus there is no charge for this service
by Scott Pape> on November 19, 2016
A couple of years ago I hosted a 13-week prime time television show.
Don’t remember it?
There’s a reason for that … it was axed after the second episode.
I found out about its premature death via a text message (!) from the network. It started out promising — “We LOVE the show” — but went quickly downhill — “And we’ll play out the rest of the series on one of the digital channels … sometime.”
Television is a brutal game.
Then again, so is the property market, which is what the show was about.
If we’d made it to the later episodes, you would have seen a young couple making a life-changing mistake.
Spurred on by her father, the couple were half-heartedly bidding at an auction on an absolute dump of a joint. You could tell they didn’t want it, and you could also tell that they really couldn’t afford it.
And then the unthinkable happened … the bloke they were bidding against suddenly put his hands in his pockets and shook his head, and the auctioneer turned around and shouted “SOLD!” to the shellshocked couple.
Real Estate Mistakes
So let’s talk about the two biggest mistakes that first home buyers make.
The first mistake they make is they buy a home they can’t afford. They’re often spurred on by the ‘advice’ of family, friends, real estate agents and bank managers — none of whom have the responsibility of repaying the debt for the next 30 years.
That explains why I’m a stickler for saving up a 20 per cent deposit. Yes, a good deposit means that you don’t have to pay Lenders Mortgage Insurance (LMI), which can cost homeowners upwards of $13,000 simply to insure their bank. And yes, it also means you’ll be able to negotiate a cheaper rate with the bank. But the main payoff from saving a 20 per cent deposit is that you will have proven to yourself that you can handle a huge mortgage.
How long does it take to save up a 20 per cent deposit? Well, the average full-time pre-tax wage in Australia is $78,832 or $5,000 a month in the hand (excluding super). So a couple both earning average wages could live off one income (very frugally) and save a $100,000 deposit in 21 months.
The second mistake first home buyers make is … buying the wrong home.
It happens every weekend. Property prices in our capital cities are so insanely high that many young couples get worn down by being continually outbid on places. Some get so desperate they wind up behaving like a boozed-up bloke at a nightclub when last drinks are called … “You’re here; you’ll do”.
I get emails from people most weeks saying things like, “We know it’s tiny, a little dumpy, and totally not in the area we want to end up … but it’s only temporary.”
Haemorrhoids are temporary … a $650,000 home is anything but.
Trust me on this. The biggest purchase of your life shouldn’t be a chew-your-arm-off-in-the-morning moment. You should only buy a home that you can happily live in for at least 10 years.
Reason being, the costs of buying and selling (hello stamp duty and agent’s fees) mean that you will likely be out of pocket if you plan on selling within a few years. Also, the idea of turning your home into an investment property and upgrading is generally a bad idea from a tax (and investment) point of view.
The bottom line is that if you can’t commit to a 10-year timeframe then you’d be better off renting.
Yet that doesn’t mean you should hold off buying until you can afford to live in a trophy suburb. Far from it. When my wife and I went looking for our place in the country, we decided to rent there for a year. “You should rent in the country for a while… make sure she doesn’t miss her soy lattes”, my father wisely advised. It was good advice, given my wife, Liz, was brought up in North Fitzroy where even the ducks have their own bike lanes.
In that year of renting we got a feel for the joint. Not only did we become part of the community, we also got to study the market. I made friends with local real estate agents and even did a letterbox drop of places I wanted to buy.
In the end, the day we bought our home was one of the best days of my life. Not only could we afford it, but we knew it was the home we’d never leave (well, until it burnt to the ground). I actually sealed the deal by proposing to Liz on the verandah.
Okay, so you may not go that far, but I guarantee you that every first home buyer feels a sense of freedom from finally being able to delete the Real Estate app from their phone. Not only did Liz and I get our weekends back, but we now had a place to call home.
As my mum says, “Life doesn’t always turn out like it does on TV”. And thank God for that.
Tread Your Own Path!
It’s never an easy decision knowing when the right time is to purchase a property.
At present, there is uncertainty around property markets due to the Federal Election in July.
There are concerns about the Opposition’s housing tax policy and many who are planning their next purchase, are wary of how these new policies will affect property.
For many property investors, holding off on purchasing their new investment until after the election may be considered a wise decision, but is it necessarily a smart strategy?
Firstly, before one can make a decision, it’s best to understand what the proposed changes are and how they will affect the property market.
If Labor were to win the election, they will stop negative gearing of established investment properties bought after 1st July 2017. Capital Gains Tax will also be increased on the sale of any invest property bought after July 1st 2017 from 50% to 75% of any capital gains accrued when the property is sold.
The reason for the policy changes are to increase the housing supply to ensure housing affordability for those yet to enter the market.
Those against Labor’s policy believe the real tactic is to raise more tax revenue and save $32 billion to the budget over the next decade, with no thought to the first time investor at all.If history gives an indication of what affects affordability, its house prices and wages growth which counter affects how much the banks will lend.Unfortunately neither party in the election have suggested an improvement on wages or increase housing affordability.
If Labor wishes to make housing more affordable for the first-time buyers, it will need to reduce the value of homes to ensure the small group of first time buyers can buy a home they can afford or provide affordable properties, which are usually in outer suburbs, and away from the city where most work opportunities and services are available.
It’s a difficult situation for the first time buyer to face when wanting to get their foot into the great Australian dream of having their own home.
Labor’s intention of removing negative gearing may not be the answer. If Labor does win the election and the policies are put in place, it is forecast that there will be a miniboom in established properties as investors purchase up before July 2017 and then there will be a lull as demand for properties fall.
Similar lulls have followed after the removal of stamp duty concessions and First Home Owner grants.
We may also see an increase in property developments, which if history repeats itself, may over supply dwellings in outer suburbs or high-rise apartments that offer low capital growth and little rental interest.The knock on effect will have investors sell up, losing money by selling lived-in properties that have fallen in value as owner occupiers not investors will be interested in purchasing them.
The worst effect could be on young owner occupiers who purchased a home in the same suburb as the investor, to find the value of their home brought down as the investors sell for what they can get.
With all this potential activity, it’s not easy for the property investor to know what to do.
The best thing is to make an informed decision and not make an irrational and emotional buy due to panic. All the changes are supposed to impact property’s performance, but many well-located properties have risen in value in the past when changes have been made to the property market.
Those that are looking to make a long-term gain with their property investments, tend to be the investors that thrive.
At present, the property cycle is at a mature stretch and it’s highly probable that all capital city property markets will end up higher at the end of the year than they are currently now. This will be driven by a number of factors including steady economic growth, mild wages growth, population growth, falling interest rates and rising consumer confidence which comes after an election.
If you have the finance approved to buy your next property – whether it be a home or investment, now may be the right time to do it, rather than waiting until after the election. There will always be a risk of uncertainty, no matter who wins the election. But uncertainty can often bring unexpected opportunity.