Category

Economy

Dec 15
0

Will we see Apartment prices drop in Sydney and Melbourne?

By | best investment, Building, chinese investment, foreign investment, Uncategorized | No Comments

The Sydney and Melbourne unit markets in particular have been buoyed by Chinese investors, but six months on from a bank clampdown on foreign lending, will we see apartment prices drop in Sydney and Melbourne?

The word has been that apartment prices in Sydney and Melbourne may drop because of over-supply but the real danger may be the thousands of Chinese property investors who bought apartments in Australia are now scrambling to save their investments. Already, a number of apartments bought off-the-plan by Chinese investors have failed to settle due to the buyers being unable to secure finance for settlement.

(Please contact us at info@limepropertysolutions.com.au for further information or the chance to discuss this and other issues in the comfort of your own home.

In these cases, the developer is entitles to keep the 10% deposit paid at exchange of contract and on-sell the apartment. In many cases it makes sense to reduce the price of the apartment for a quick sale. With possibly hundreds of new apartments being on-sold ‘below original cost’, this would soon affect the whole city-wide apartment market. Read more: http://www.abc.net.au/news/2016-11-28/chinese-property-investors-worried-after-big-banks-change-rules/8062530  Related Story: Tough new loan laws see Chinese investors opting for private lenders

In mid-year year, the major lenders stopped lending to offshore investors in a bid to reduce  risk. Lenders were worried by some applications with fraudulent proof of income, and wanted to rein in lending to avoid being too reliant on Chinese borrowers. These changes are now having a major impact on the property market, particularly in the foreign investor’s favourite locations in Sydney and Melbourne property investment hotspots. For the estimated 50,000 Chinese buyers involved there has been crushing disappointment. It is estimated that up to 30,000 investors are affected.

As well as our Australian lenders, China’s banks have cracked down on money heading abroad, so investors have been left trying to borrow from other Asian banks. With up to 30,000 units unable to settle, it is difficult to see why this will not affect the major city apartment markets. We are more than likely see Apartment prices drop in Sydney and Melbourne over the next couple of years.

If you want to know more about safe growth investment over the next few years contact: info@limepropertysolutions.com.au.

Dec 05
0

Stamp Duty Must be Reduced

By | best investment, Economy, Financial, Investment, Negative Gearing, News, Property Solutions, stamp duty | No Comments

Stamp duty must be reduced

NSW Planning Minister Rob Stokes has recently broken ranks with his Liberal colleagues and suggested that the federal government should make changes to negative gearing. It’s all part of the Sydney ‘affordability’ debate but it is a reduction in stamp duty which is a much better way to improve affordability. Most studies into negative fearing show that its removal is unlikely to drop property prices by any more than half of one percent, yes just 0.5%.

(Please contact us at info@limepropertysolutions.com.au for further information or the chance to discuss this and other issues in the comfort of your own home.

On a very low-priced Sydney home at $550,000, the stamp duty payable to the State Government is over $20,000. Ion the same property, it would likely reduce in value by just $2,750 if negative gearing incentives were removed.

Mr Stokes argued that adding new supply to the market would not make property affordable on its own and suggested changing tax benefits for investors should be changed. In our view, it’s a pity Mr Stokes could not do the arithmetic in the last paragraph and then realise that he and his party can actually do something now to assist affordability rather than doing the political usual of putting it in the ‘too hard’ basket then passing the problem off to someone else. Read more : http://www.domain.com.au/news/stamp-duty-adding-years-to-the-depositsaving-plans-of-sydneys-home-buyers-20161202-gt2jjz/

Property Council of Australia chief of policy and housing Glenn Byres says the $40,000 an average home buyer in Sydney pays on top of their purchase price in stamp duty is a concern. In just four short years, the NSW Government’s stamp duty revenue has doubled from $4 billion to $8 billion. Stamp duty must be reduced if we are to help first home buyers.

If you want to know more about how you can save on stamp duty buying a new property investment contact: info@limepropertysolutions.com.au

Nov 14
0

Will Donald Trump burst the Australian housing bubble?

By | best investment, Economy, Investment, Market, News, Property Research, Research | No Comments

Will Donald Trump burst the Australian housing bubble?

Speculation is rife on everything financial, with Donald Trump at the wheel of the world’s largest economy; the biggest of these questions for the property investor is will Donald Trump burst the Australian housing bubble? Read more: http://www.smh.com.au/business/the-economy/is-donald-trump-going-to-burst-australias-housing-bubble-20161111-gsnee0

Will Donald Trump affect Australian property prices?

Will Donald Trump affect Australian property prices?

It was written at the weekend, “given his propensity for lying, exaggerating and generally raving, nobody can know what Donald Trump will actually do as president. He probably doesn’t know himself.” The article does not confess to general raving and exaggerating itself in that there is absolutely no evidence of an Australian housing bubble! Australia is the largest island nation in the world, it includes WA and FNQ, Tasmania, SA and everything between. There is a possibility of a ‘housing bubble’ in our two largest cities, but in many other places, prices are less than what they were 10 years ago. This is in Australia and we can’t talk about an Australian bubble, that’s Donald Trump talk!

(Please contact us at info@limepropertysolutions.com.au for further information or the chance to discuss this and other issues in the comfort of your own home.

According to the bond market reaction, Trump may burst the Sydney/Melbourne housing bubble by causing interest rates to rise.

The Trump plan, in its essence, is very simple and markets clearly believe it will work. He is planning a major infrastructure investment and, unlike Australia, he won’t let public servants constantly get in the way of the infrastructure momentum. But he will re-fire the American steel furnaces, because he doesn’t plan to use Chinese steel.

Trump also plans to lower the US tax rate and suck the enormous sums that American corporations are holding overseas back into the US. Along the way he will make it harder for Canadian, Mexican and Chinese exporters to tap the US market. He says that will be done via higher tariffs. The world is going to move from an increasingly globalised one to one where nations will look more inwards. But given today’s communication and transport systems there is a limit to this change.

The more common fear is that he could start a trade war with China that would cause a global recession which would obviously affect Australia. That would not be a good way to achieve lower housing prices. Hopefully there is enough sanity left in Congress to prevent such madness and just consider the more benign interest rate story.

The last Reserve Bank board meeting was forecasting another RBA rate cut or two by the middle of next year. Trump’s policies, if implemented, will cause a period of inflation resulting in RBA increases and that could certainly cool down the Australian housing market.

So will Donald Trump burst the Australian housing bubble? The media are always looking for stories which may deliver this result, time will tell but maybe they are on to something here that will see prices stabilise in Melbourne and Sydney.

If you want to know more about possible ‘property bubble bursts” or discuss buying new property investment,   contact: info@limepropertysolutions.com.au.

Nov 10
0

Is it really time to be asking for a rental decrease?

By | best investment, Economy, Real Estate, rent | No Comments

Is it really time to be asking for a rental decrease?

This attached recent article from Jessica Irvine of sometime ABC fame, is suggesting renters should now be asking for rental decreases but is it really time to be asking for a rental decrease?

I believe that while there is some truth in the story, it is not the time for a huge number of renters to be asking for a decrease.

Read more here: http://www.smh.com.au/money/why-its-time-to-ask-for-a-rent-reduction-20161107-gsjq6i

The data she uses is all sourced from NSW, particularly the NSW Tenant’s Union and of course, this data seems to support the fall in rentals in Perth and the likely fall in rentals in inner Brisbane and Melbourne!

(Please contact us at info@limepropertysolutions.com.au for further information or the chance to discuss this and other issues in the comfort of your own home)

I’d suggest to any renter looking for a new property or a new lease that they use their own common sense when negotiating. In Sydney and Melbourne in particular, yields for landlords (yield being rent paid) are now at their lowest ever. Landlords are not inclined to lower their returns even more. Common sense, in this instance, just means having a look around your area and on real estate web sites for comparable property for rent. If you are looking at a unit, then perhaps in some areas you may find that there are many similar units available for rent. In the knowledge that you can easily find another place if necessary at maybe a lower rental, then you MUST try and negotiate a decrease on your current rent or try for a decrease in the advertised rent. If the landlords are desperate, they will negotiate.

If you are sitting in a nice little townhouse or villa, or even a house and land close to the city or even in the middle suburbs of your city, you may find that you are lucky to have the property you are currently renting. There are many areas with plenty of rental properties, but make sure you are comparing apples to apples. It can still be very difficult in many areas of all our east coast capital cities to find the type of home you wish to rent, particularly if it is not a unit, and if there is a scarcity, be prepared to pay for it. Your landlord will easily find someone else who is prepared to give them what they want if you won’t! Maybe it is not time to be asking for a rental decrease.

If you want to know more about rental yields in certain areas or discuss buying new property investment,   contact: info@limepropertysolutions.com.au.

Nov 07
0

Buying your first home is not easy, Bernard Salt

By | best investment, Economy, Investment, News, property cycle, Real Estate | No Comments

Buying your first home is not easy, Bernard Salt

Buying your first home is not easy, Bernard Salt, some of our younger generations, Gen X and Gen Y, seem to miss the humour of one of our best known demographers, Bernard Salt, who has now written two articles over the last couple of weeks suggesting firstly, that they might like to stop buying expensive avocado lunches and save for a home or even give up their overseas holidays and save instead for a house deposit! Like me, Bernard is a “baby-boomer”, one of the lucky who just drifted through life buying cheap properties and having a ball!

(Please contact us at info@limepropertysolutions.com.au for further information or the chance to discuss this and other issues in the comfort of your own home)

While his recent articles should not be taken too seriously, or rather too literally, I do feel some annoyance at how hard the world is perceived to be to some of the younger generations trying to jump on the first step of the property ladder. It has never been an easy step to take, Buying your first home is not easy, and it can be annoying when we baby-boomers are reminded just how easy it was for us to get started.

Read more Bernard Salt article here: https://goo.gl/wGnqiK

My first home was bought in the UK. I was a 21 year-old teacher and the very small two-bedroom duplex I purchased was around eight times my annual income. I managed the deposit through working for the previous four years, sometimes up to 126 hours per week during all the long university breaks and saving by staying at home. On a couple of occasions, I did take lower paying jobs which offered me free accommodation and free meals in holiday destinations like France and the Channel Islands. While I didn’t save much on these jobs, I at least had the opportunity to explore and enjoy a different culture. Travel expenses were absolutely minimal as I hitch-hiked most of the time.

When I eventually moved in to my first home, I had most of the basics from presents from a large family. I had a bed, lounge suit and necessary kitchen-ware and linen. I made most of the ‘furniture’ from cheap melamine sheets and watched a black and white television gifted to me as most people were switching to colour. I did have an old car that was serviced by me with the help of a friend. I had to take on another evening part-time job to help make ends meet. The only time I could ever afford to eat-out was at family gatherings where usually, my parents were paying. Every couple of weeks, if the budget allowed, we may have had a bottle of wine. Eight years after buying the house, I had my first 10 day trip overseas.

This was a lifestyle very typical to all my friends, it did not seem ‘hard’ and it certainly was not unusual. The older generation thought, quite rightly, that we never had it so good.

In speaking to older Australians, including many European immigrants from the 50’s and 60’s, it seems their life was similar. Many tell stories of building their own first home with the help of friends and sleeping on mats on the floor until they could afford a proper bed.

I’m very glad the world has changed and our standard of living has improved immensely since the 1970’s but I do think Mr Salt, tongue in cheek or not, is putting out a very important message; it is not easy to get on to the property ladder buy it never has been! It does often take some sacrifice in current lifestyle and it does involve living on a tight budget …. and always has!

‘Affordability’ is always an issue after a period of cyclic growth. Buying your first home is not easy and never has been. The same stories emerge after every growth cycle. We had the same discussions in Sydney in 1989 and again in 2003 after the last two major growth cycles. After a few years, income increases, borrowing rates change and things become easier – affordability increases! If we make the necessary sacrifices and budget/lifestyle changes now, then there may be a good chance that advantage can be taken during the next phase of more-affordable housing. It will happen, it always does, just be ready for it and don’t expect to start off with everything that your older neighbours have; it’s taken them all their life to get to where they are!

If you want to know more about this or discuss buying new property investment, a great way to ‘save’ towards your own first home, contact: info@limepropertysolutions.com.au.

Oct 26
0

Affordable Housing fix is years away

By | best investment, Economy, Investment, News, Properties, Property Research, Real Estate, stamp duty | No Comments

Affordable Housing fix is years away

Don’t you get fed up reading about the latest ideas on affordable housing? Now we read again something we all know, the affordable housing fix is years away!

The latest government inquiry, costing thousands of dollars again has been abandoned and placed in the ‘too hard’ basket yet again, good and not surprising news to the property investor but not so good news for the first home buyers in our major capital cities.

(Please contact us at info@limepropertysolutions.com.au for further information or the chance to discuss this and other issues in the comfort of your own home)

It’s reported today, “Treasurer Scott Morrison’s speech on housing affordability might look like an improvement on his predecessor’s “get a job, a job that pays well” advice. It’s not. In practical terms, it’s nothing at all.”

It’s reported as one of the government’s favourite sort of problem, “one they can flick responsibility for onto the states and spend some years “thinking” about it without actually doing anything constructive.”

So the problem is all about supply, or is it state land use regulations, or is it tax policy and something to do with the cost of supplying expensive social housing? Maybe it’s all about changing our capital gains tax rules or getting rid of negative gearing or just moderating the rules on new land releases? It might also help to charge developers more for appropriate infrastructure around new releases or developments, (struggling to understand this one?) or just a simple case of easing the huge amounts of stamp duty payable on the purchase of a property?

Of course, the answer may just be reviewing the first home owners grants, introduced in 2000 to assist with the additional costs in building caused by the introduction of the GST or maybe it’s just about lowering interest rates even further and keeping them low?

Now you know what some of the issues are you should have some idea of how easy this is to rectify! For a fuller explanation, you might like to try and understand this article: https://goo.gl/pE6vAR

I really think it is fair comment to assume that property investors have little to fear in the future about what government can or will do to make owning a property more affordable. The one thing that is very true and understandable about the issue is that affordable Housing fix is years away, if ever.

If you want to know more about how to make money out of the ever increasing price of property, contact us at info@limepropertysolutions.com.au.

Oct 24
0

Empty bedrooms? Put your money where your mouth is!

By | best investment, Economy, Financial, Investment, News, Property Research, Real Estate, Research | No Comments

Empty bedrooms? Put your money where your mouth is!

Apparently Sydney now has 20 years of future housing stock in empty bedrooms? Put your money where your mouth is NSW if you want to utilize more of this ‘space”.

Houses roofs

Downsizing is too costly for many older Australians

The first point of this new argument must be defining who has these ‘extra bedrooms”?   While some bedrooms in the homes of empty nesters may be empty some nights of the week, many do not have empty bedrooms gathering dust.  After years of being cramped with children, it’s a later life treat to own enough space for a study or an area to pursue a hobby. These rooms can also be used as exercise rooms to keep ageing bodies trim. Most are also grandparents who require bedrooms for visiting children and grandchildren; they are perhaps underused but certainly not empty.

(Please contact us at info@limepropertysolutions.com.au for further information or the chance to discuss this and other issues in the comfort of your own home)

 It’s also time to review the massive disincentives placed on older Australians to downsize. Many empty nesters will never consider downsizing because the appropriate type of housing is just not being built. Sure, we are constantly being warned about the forthcoming glut of apartments in most of our east-coast city markets, but many older Australians are not prepared to give up their gardens or a small private area where they can allow their ‘fur-children’ some space to run around outside the home. A smaller garden is often an attractive proposition but no garden at all is a deal-breaker. We need more villas and town homes in the established suburbs where the majority of these older Australians currently live.

 

The financial penalties for retirees downsizing can be enormous. Just imagine, an older retired couple in a slightly above average (larger) home worth $1.5 million. The home sale, including marketing and legal costs will cost them around $30,000. They buy a smaller town house at around $900,000 and they say goodbye to another $40,000 in stamp duty, another $2000 on legal fees and probably around $10,000 in removal expenses and buying some new furniture that ‘fits” their new surroundings. Basically, they would need to budget around $100,000 of their, (in most cases) diminishing wealth just to move.

 

Having made the move, they find that they have an additional $400,000 in the bank. This may be enough to stop many of their senior benefits, including pension payments. The argument, of course, is that they don’t need any government funding now but this misses the point that older Australians do love their children and grandchildren and they see it as an essential legacy to leave an inheritance to their family.

 

It will always be difficult to persuade older people to move out of their family home to free up empty bedrooms for the younger generations but as long as our governments insist on penalising such a move, the bedrooms will stay “empty”. Read more https://goo.gl/jBePqx

If you want to know more about appropriate house type investment contact us at info@limepropertysolutions.com.au.

Oct 18
0

Forecasts for Housing Price growth

By | best investment, Economy, Investment, News, property cycle, Research | No Comments

Forecasts for Housing Price growth
We seem to be by bombarded by various forecasts for Housing price growth, or maybe I should say, in some cases, housing crashes or bubbles bursting.
If you are feeling in a particularly negative mood, or perhaps you are a first home buyer waiting for the market to crash in order that you can buy, then its best to try and get a hold of the many international companies, looking at the Australian housing market from the outside, to find the doom and gloom price crash scenarios. Just last week, Deloitte Access, (not for the first time) tipped property to be the ‘worst investment’ over the next few years; I’m sure they’d love to get it right just once!
If you are interested in hearing a more positive forecast for real estate prices, you can usually depend on the Real Estate Industry itself, particularly some of the better known, (not necessarily more accurate!) organisations like Domain or Hotspotting “ guru” Terry Ryder, who infamously wrote that there was ‘no mining boom’ a few years ago and high prices, high rents and growth would continue in some of our mining boom towns!
(Please contact us at info@limepropertysolutions.com.au for further information or the chance to discuss this and other issues in the comfort of your own home)
Probably, by far, the most dependable forecasts we have are those done by BIS Shrapnel on behalf of QBE, the most recent being the Australian Housing Outlook Report 2016-2019. This report is published in October each year and the latest has just recently been released.
While the press report on this release loves the opportunity to use phrases and words like “The Boom is over” and “Prices Plummet”, the experienced property investor will find absolutely nothing out of the ordinary or unexpected in the report. In summary, Sydney has hit the top of its growth cycle and we may see a small correction in the price of units and an even smaller correction, if at all, in house prices; exactly what happened after the 1988 and the 1993 Sydney ‘booms’ but maybe not as much as the small corrections of the last two booms – just don’t expect any price growth over the next 3 years. The forecasts for Melbourne are very similar although we may see a slightly larger correction in unit prices and a small correction in house prices.
Brisbane is forecast to see a drop in unit prices due to the very high level of unit development in the CBD and fringe but house price growth will continue, making the Brisbane house market the strongest growth market in Australia over the next 3 years.
Take away the emotive language of this daily mail article and the truth behind it shouldn’t hurt any property investor in our east coast cities too much and, in fact, should see Brisbane house investors continue to smile! Read more https://goo.gl/a6XArr
If you want to know more about the QBE Forecasts for Housing Price growth or find out more about growth suburbs contact us at info@limepropertysolutions.com.au.

Oct 17
0

Brisbane suburbs where house prices have doubled

By | best investment, chinese investment, Investment, Properties, property cycle, Property Research | No Comments

Brisbane suburbs where house prices have doubled
It’s interesting to read about the number of Brisbane suburbs where house prices have doubled over the last 10 years.
(Please contact us at info@limepropertysolutions.com.au for further information or the chance to discuss this and other issues in the comfort of your own home)
The news always seems to be centred on the Sydney market with the occasional comment on what is happening in Melbourne. We read about property investors (and maybe a few home owners) almost buying out a brand new release in Macquarie Park in Sydney at the weekend but one story you will find very difficult to find is about Sydney suburbs that have doubled in value over the last 10 years – there are none. It’s a slightly different story in Melbourne where we do have a few suburbs that have doubled in value in the last ten years but we read and hear so little about Brisbane.

Well, according to Domain Group Data, here are the suburbs in Brisbane that have more or less doubled in value over the last 10 years:-

• South Brisbane*
• Newmarket*
• Wishart* (*have more than doubled in value, according to Domain Group data)\
• Macgregor
• Cannon Hill
• Northgate
• Sunnybank
Apparently the growth is not all about people paying more to get into a suburb. Simon Pressley said, “While someone in South Brisbane may have bought for $500,000 and now their home is worth $1 million, they might have spent $800,000 on the home.”
Sunnybank has attracted a very large number of residents from a Chinese background and like many of the well-populated Chinese Australian areas in Sydney, prices have just grown and grown.
Probably not surprisingly, seven of the top ten of the biggest growth suburbs are located within five-kilometres from the CBD.
According to Andrew Wilson from Domain, most of the growth had occurred in the past three years. Similar to the claims being made about the growth in Melbourne and Sydney, low interest rates over the past few years are being attributed to the cause of much of this growth.
It is interesting to note that BIS Shrapnel’s annual housing report released last week is still predicting house price growth to be stronger in Brisbane than in any other capital city over the next few years, so look out for more additions to the list of Brisbane suburbs where house prices have doubled over the last 10 years. Read more here: https://goo.gl/4ChtqG
If you want to know more growth suburbs in Brisbane and how they may affect your property investment choices contact us at info@limepropertysolutions.com.au.

Sep 30
0

What Sydney Housing Bubble?

By | best investment, Economy, Investment, mortgage rates, News, Properties, Real Estate | No Comments

What Sydney Housing Bubble?

Another international story about “The Bubble” – what Sydney housing bubble? Should be he title!  It seems that every month or so we read of overseas ‘experts’ (and very occasionally some local ‘expert economist”) telling us here in Sydney that doom is on the horizon for house prices in Sydney. Instead of peering over price growth charts in their far-away offices on the other side of the world, maybe they should just try finding a property to buy or rent in our great city before predicting yet another housing price crash!

Highlights from the recent UBS Global Real Estate Index Report place Sydney as the fourth-biggest housing bubble in the world. A bubble is something that is about to burst so this suggests that our young in Sydney actually will have no problem at all in entering the housing market as prices tumble when the bubble bursts. How many people do you know who actually believe this is close to coming true?

Bubbles burst when a city ends up with a major over-supply, populations decline and/or when loan repayments become impossible. With all the warnings of bubbles bursting in Sydney over the lifetime of anyone reading this article, it has never happened! Sure, towards the end of a boom period, we have seen prices correct by a few percentage points but no-one alive can ever tell you about the time the Sydney Real Estate market bubble burst.

If you actually believe this overseas take on the Sydney market, then you must also believe the following is about to occur:-

  • Sydney’s building boom is about to leave us with a massive oversupply of new stock
  • Sydney’s population boom is about to come to a screeching halt
  • Sydney is about to be hit with a very large unemploymnet problem
  • Interest rates are about to increase dramatically leaving home owners unable to pay their mortage

If you are concerned about interest rate hikes, read this: http://dailym.ai/2dno9k3 – they are likely to remain low for decades! As for the likelyhood of the other factors – forget it!

 

It would be great for our younger generation trying to make their first step on the housing ladder  if there was the slightest element of hope in our non-existant bubble bursting- what Sydney Housing Bubble – and maybe the topic makes for a little light banter around the BBQ but I’m convinced anyone who knows this great city also knows the story of the bubble bursting is just pie in the sky.

Read more: https://goo.gl/fAhbYi

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