Posts Tagged ‘Glenelg Real Estate’

It angered pundits and mortgage holders alike, but Angus Raine, CEO of Raine & Horne, says the decision by the big banks to hike up variable interest rate mortgages is not the end of the world for the Australian real estate market.

“There is still more than enough good news around for the Australian real estate market,” says Mr Raine. “A rate rise is never good news for those with a mortgage or aspiring first home buyers.”

“However market sentiment is stronger than this time last year and as a consequence we’re seeing more homeowners in some markets across Australia listing their homes for sale.” At the same time, Mr Raine confirms that buyer and investor enquiry is also stronger than this time last year.

Moreover Mr Raine advises that the full benefits of the Reserve Bank’s decision to cut interest rates in November and December 2011 are yet to filter through to the property market. “The property market is a slow moving boat and it takes time for macroeconomic factors such as interest rates to flow through,” he said.

In an interesting twist, leading financial comparison website www.ratecity.com.au is urging borrowers to demand their own personal rate cut from their lender. Damian Smith, RateCity’s CEO, said borrowers could trim more than 1% off their variable home loan rate if they asked for a discount. “We’re seeing lenders offering discounts of up to 1% off their standard variable rates for basic home loans and many lenders – including the big four banks – have said they are willing to negotiate to retain their share of the home loan market,” said Mr Smith.
Away from interest rates, and owners of premium properties should take note that increasing numbers of the world’s expatriates are looking to head Down Under than anywhere else in the world. According to the world’s largest survey of expatriates, the HSBC Expat Explorer, more expats are attracted by Australia’s healthy outdoor lifestyle, friendliness and work/life balance. And once in Australia, HSBC states that expatriates are more likely to lengthen their stay or settle permanently.

Despite the earning potential being less in Australia, expatriates around the world selected Australia as the top destination for their next assignment, out-ranking other markets including the US, Singapore, Hong Kong and Canada. Of those surveyed, 71% chose Australia because it was perceived to offer a better quality of life compared to expatriates who chose the US and UK based on the perceived financial gain (54% and 55% respectively).

This blog post is brought to you by Raine & Horne Glenelg your Glenelg Real Estate Agent and Glenelg Property Management Expert.

Moving inter-state or from country to country is harder than moving round the corner in the same suburb, or to another suburb in the same town, which is one of the reasons most people don’t move far when they move house.

Some people lose money, especially if they move from an upwardly mobile area to one where prices don’t change much, and find themselves unable to buy back into their original location if they change their minds. What steps can they take to make this process more financially secure?

Many people like to buy their new place of residence before they make the transfer. This way they experience a smooth transition from one home to another – with the emphasis on ownership and avoidance of renting at all costs. They see no problem arising from selling their old home and cutting their ties with their old life.

While such a strategy may be organised and efficient in the short term, it doesn’t always turn out to be the most successful in the long run. Many people find it hard to carry out property inspections when they live far away. Often they give themselves too little time to find a new home. They forget that moving round the corner means that a lot of the market knowledge they need is already taken for granted. (Busy roads, proximity of services, exposure to adverse season-dependent weather conditions to name a few.) Many find that the property they bought to start with seems less desirable as their local knowledge deepens.
Others find it harder to settle into a new life than they anticipated. The schools aren’t as good as the old ones, clubs and other networks don’t exist or simply don’t seem as familiar as what they left behind, the weather is too windy, wet, hot, cold – or any of the hundreds of reasons people find for not settling into a new place that is simply not “home”.

Those who have no choice – the ones who have to stay because they have been transferred and are under contract – eventually settle in, but just as many are in a position to change their minds and many of those wish they had kept their options open.

Those who decide to move back to where they came from could have reduced the financial cost of moving by not selling their home and buying another one – only to do it all over again when they return to where they came from. In hindsight, many realise that they could have chosen to rent temporarily while they explored their new territory.

Selling up before moving becomes especially likely to cause heartache if the area left is an area of greater capital growth than the area of re-location. Buying back in becomes difficult if prices go up faster in the original location than in the new one.

Naturally, not everyone decides to move back to where they came from. Some simply realise that in the hurry to get settled they chose the wrong house or the wrong area in which to buy, that round the corner or in the next suburb would have been more convenient, more appealing, more likely to go up in price.

Of course, retaining a home, renting it out and eventually selling it at a distance poses its own set of challenges. But many people find it’s the conservative option – the one more likely to maximise financial success and offer the greatest number of options further down the track.

This blog post is brought to you by Raine & Horne Glenelg your Glenelg Real Estate Agents and Glenelg Property Management Experts

“Many investors embarking on leasing out their first rental property hold out for the highest rent possible before letting the property, thinking the sky is the limit in a competitive rental market.” said Ms. Monika Bonet – Principal of Raine & Horne Glenelg.

According to Ms. Bonet “many do this even if this means losing several weeks rent. What does this mean for their overall return on the property?”

Experienced property investors report that the best way to maximise the return on their investment properties is to keep the property let – in other words to mimimise vacancy. But it is not always easy to decide to lower the rent. It is tempting to hold out for “just another week” and before you know it, another one goes by. But experienced investors say that doing the sums shows that holding out for a high rent is counter-productive; if the property is never going to let for $400 a week anyway, losing $350 for even two weeks is $700 that, spread over a year, will lessen the overall weekly return to less than the $350 the property will actually eventually be leased for.

Furthermore, tenants talk to other people in the rental market and those paying top dollar are the first to notice a downturn in the rental markets, often reacting by moving out to a cheaper property when their lease expires – a further opportunity for vacancy while the landlord chooses again to go for top rent before accepting the changed circumstances. Higher turnover of dissatisfied tenants is a further opportunity for lost income.

Experienced property investors aim for long term occupancy by asking for 95% of market value, thus avoiding tenants moving to greener pastures when the rental market slows down. And when they do have a vacancy, they work by the rule that (provided the property is clean and presents well and is well-maintained) if a tenant is not secured by day ten of the leasing campaign, the asking rent should be reduced by ten percent. This takes the agony our of the decision, enabling the property owner to distance themselves from the process by working to a tried and tested system.

This blog posting is brought to you by Raine & Horne Glenelg your Glenelg Real Estate Agents and Glenelg Property Management Experts

Quick… watch this Youtube video and be the first to inspect before it’s open to the public…

Come and inspect this stunning three bedroom two story residence executive residence at 45 High Street, Glenelg. Situated in the heart of thriving Glenelg. This residence offers smart, sleek & exceptional living just a few steps away from Jetty Road &, Glenelg Beach.

This property is presented by Monika Bonet, Principal of Raine & Horne Glenelg, your Glenelg Real Estate Agent

When media reports start talking about static or falling home prices, many homebuyers think that it’s a good idea to watch the market and wait for it to reach the bottom. They feel that if they postpone their purchase long enough, they are likely to see prices fall further and snap up a ‘real bargain’. 

While bargains do exist, of course, for people who are in the right place at the right time, there are often more people who miss out by using this strategy than gain.  Most homebuyers buy their family home and live in it for, on average, seven to ten years.  And when we’re looking at averages, the property market continues, in the big picture, to rise. Based on historical property cycles, property may undergo periods of static growth and periods of galloping growth, but on average, well-located, well-selected residential property doubles in value every ten years or so. Certainly, if we could always pick the lowest time to buy and the highest time to sell we would do very well indeed, but the only buyers who need worry about the immediate state of the market are the real estate speculators who wish to buy then sell again straight away, or those who are too highly geared or who have entered into unrealistic amounts of debt. For everyone else, the chances of strong long-term capital gain are virtually assured, provided they buy well-selected property in well-selected locations.

It’s famously difficult to pick the ‘bottom’ of the market. Often buyers who wait find themselves having little to choose from as listings get scarce – and a sudden flurry of competition for the few desirable properties actually on the market for sale often causes them to sell for higher prices than expected, even in a market described as a difficult one for sellers.  Buyers end up paying more than they bargained for if they  keep on watching and waiting;  because the ‘flurries’ they waited out were signalling an upturn in the market or the end of the halcyon days for buyers.
 
Purchasers who wait too long for a ‘bargain’ or the ‘lowest point of the market’ often only realise that the lowest point has already been reached once they can look back on it with the 20/20 vision of hindsight.

This blog post is brought to you by Raine & Horne Glenelg, your Glenelg Ragement Expertseal Estate Agents and Glenelg Property Management Experts.

Raine & Horne South Australia CEO, Kevin Magee answers the top real estate questions every month including “HOW’S THE MARKET?” in South Australia and “WHAT DOES THAT MEAN FOR ME?” in the process identifying real estate opportunities, clarifying trends and providing property market tips for Raine & Horne members, Buyers, Sellers, Investors (Landlords) & Tenants.

For ongoing & concise property updates, media scoops and tips follow Kevin on Twitter @rhSA_CEO or contact Raine & Horne Glenelg, your Glenelg Real Estate Agents and Glenelg Property Management Experts.

Many Glenelg homeowners are holding off from putting their property on the market as the media continue to report a market downtown and uncertain financial times. But the ‘best time to sell’ is often not what it seems. 

Some people sell to retire and buy something smaller. This blog post does not refer to them. But the majority of sellers at any given time are trading up to a bigger property to house their growing family or reflect their increasing wealth. These home owners will pay more for their next home, than they will get for the one they are selling ….and actually do better when the market is on the decline. The fact that they are spending more money second time round gives them an opportunity to make money on the transaction.

If the reason they think it’s ‘not a good time to sell’ is because they ‘will not get a good enough price’ for their home, then the logical next step is to realise that if the market prevents them from getting the price they want, it will also affect the sellers of the property they are trading up to…and the bottomline net gain remains with the person who is trading up. If you get $603,000 for your home in a cheaper suburb (which has been valued at $670,000), you may feel you are ‘losing’ $67,000 or around 10% of the value of your asset.

But if you (say) buy a more expensive home in a more expensive suburb such as Glenelg, which is (say) valued at $850,000 in the same market. Then the owners of that home will also ‘lose’ 10%, as you also will not be paying more than the current declining market value.

In paying 10% less for the Glenelg Property you will pay $765,000, ‘saving’ $85,000 – thereby ‘making’ $18,000 on the transaction. In other words you ‘saved’  more on the next transaction, than you ‘lost’ on the sale of your current home, so you are ahead by $18,000.

In fact, there are other advantages to trading up in a buyers’ market.

Because prices are stable and properties often take longer to sell, once vendors have sold their original property there is no rush to buy. They can take their time choosing and negotiating their next purchase without having to watch the gap between the price they got for their original property and the price they have to pay for their next one increasing at an alarming rate.

This blog post is brought to you by Raine & Horne Glenelg, your Glenelg Real Estate Agents and Glenelg Property Management Experts.

“You can claim a deduction for certain expenses you incur for the period your property is rented or is available for rent”  Monika Bonet, Principal of Raine & Horne Glenelg said.

Ms Bonet further noted “However, you cannot claim expenses of a capital nature or private nature – although you may be able to claim decline in value deductions or capital works deductions for certain capital expenditure or include certain capital costs in the cost base of the property for capital gains tax (CGT) purposes.”

Types of rental expenses

Ms Bonet stated that there are three categories of rental expenses – those for which you:

• cannot claim deductions
• can claim an immediate deduction in the income year you incur the expense
• can claim deductions over a number of income years.

For a detailed understanding of all rental property expenses Ms Bonet  recommend that you visit the following web link of the ATO and download a copy of their 2008

http://www.ato.gov.au/content/00131327.htm

This guide explains how to treat rental income and expenses, including how to treat more than 230 residential rental property items.

This blog post is brought to you by Raine & Horne Glenelg, your Glenelg Real Estate Agents and Glenelg Property Management Experts.

Watch this Video to hear from Raine & Horne SA’s CEO Kevin Magee, to find out what is happening in the SA Real Estate Market in March 2011.

This blog post and video is brought to you by Raine & Horne Glenelg, your Glenelg Real Estate Agents and Glenelg Property Management Experts

Watch this Video to hear from Raine & Horne SA’s CEO Kevin Magee, to find out what is happening in the SA Real Estate Market in January 2011.

This blog post and video is brought to you by Raine & Horne Glenelg, your Glenelg Real Estate Agents and Glenelg Property Management Experts