Landlords urged to keep eye on New Year’s Eve parties
Posted on Friday, December 11 2015 at 11:54 AM
’Tis the season to be jolly, but landlords are being warned to make sure the ensuing folly doesn’t hit them in the pocket.
New Year’s Eve rental property
parties can leave an expensive financial hangover for unsuspecting landlords
warns landlord insurance specialist Terri Scheer Insurance.
Executive manager Carolyn
Parrella says New Year’s Eve parties are a source of stress for many landlords.
“While tenants should be
responsible for the rental property, invited party guests, who often have no
attachment to the property, may not treat it with the same respect as they
would their own home.
“New Year’s Eve parties that
get out of hand can leave landlords susceptible to costly damage and clean-up
bills.”
She does say, however, that
there are a number of steps for landlords to “New Year’s Eve-proof” their
properties.
Screen tenants
“Prevention is often better
than the cure,” Parrella says. “Tenants are entitled to enjoy their time at the
property, however it must be done with respect and consideration for the
landlord.
“Including lifestyle questions
on the lease application can help to identify and minimise future issues. Does
the applicant have regular visitors or guests? What type of activities will be
undertaken at the rental property? Landlords can use such questions to help
filter potentially troublesome tenants.
“Renter history checks can also
identify any past issues of accidental damage that may be attributed to
out-of-control partying.”
Enforce lease agreement
“Setting the ground rules
upfront and in writing can help avoid future headaches,” she says.
“A rental agreement may allow
landlords to enforce noise restrictions, such as no loud music after 10pm, and
a maximum number of guests at the property at any one time.
“It’s a common oversight by
landlords not to use the formal rental contract as a way to outline a tenant’s
responsibilities. This can help prevent the likelihood of parties and trouble
arising on New Year’s Eve. As the holiday season approaches, it’s also an
opportunity to remind tenants of their obligation set out in the rental
agreement.”
Maintain relationships and communication
“Maintaining a positive, open
and transparent relationship with tenants will help put landlords in good stead
ahead of New Year’s Eve festivities,” Parrella explains.
“Responding quickly to queries
and concerns can help build a good rapport with tenants, making them more inclined
to treat the property as though it were their own.”
Conduct property inspections
“Property inspections should be
non-negotiable and should be scheduled both before and after the holiday
season.
“Regular inspections can
provide early indications of a tenant that may fail to fulfill their rental
agreement obligations if accidental or malicious damage is identified.
Likewise, post-New Year’s Eve inspections can help identify any accidental
damage incurred during the holiday season.
“This also shows the tenant
that the landlord has an active interest in the care taken with their property
and helps reinforce the conditions under which the tenant has leased the
property.”
Review insurance coverage
“The holiday season is a time
that can carry a heightened risk of accidental damage to investment properties,
making a specialised landlord insurance policy all the more important,”
Parrella continues.
“Too often property investors
overlook risk management until after a tenant has moved in or when something has
gone wrong.
“Maintaining
a specialised landlord insurance policy can protect investors from the many
risks associated with owning a rental property and provide peace of mind if the
unforeseen should occur.”
Article source: http://feedproxy.google.com/~r/API_Property_News/~3/2CdqiN6XcUo/landlords-urged-to-keep-eye-on-new-years-eve-parties
Melbourne vacancies defy affordability pressures
Melbourne vacancies defy affordability pressures
Posted on Wednesday, December 09 2015 at 1:26 PM
Melbourne-based non-government organisation Prosper Australia has released a report indicating more than 80,000 habitable properties could be vacant across Greater Melbourne.
Prosper Australia’s 2015 Speculative Vacancies Report suggests that
up to 18.9 per cent of investor-owned property is vacant, with the speculative
vacancy rate increasing by 22 per cent in 2014.
The annual report looks at
abnormally low water consumption over 12 months as a proxy for vacancy when
determining its speculative vacancy figures.
Karl Fitzgerald, project director at
Prosper Australia, says there are incentives for investors to keep investments
out of the rental pool.
“The findings prove we do not have a
housing supply crisis, we are literally locked out.”
Fitzgerald says capital gains
accelerated in 2014 and this saw the number of vacant properties held for
speculative investment rise.
The results were determined by identifying
households using less than 50 litres of water per day.
“According to our most conservative
measure, those using zero litres of water increased by a concerning 70 per
cent,” Fitzgerald says.
“Up to 18.9 per cent of all
investment properties lie empty.
“This report demonstrates over eight
years that hoarding is magnified in periods of increased speculation.”
Fitzgerald has called on the government
to look at the demand and supply imbalance and pursue policies to address the
issue.
“When there are three times as many
empty houses as there are homeless people, we know the policy focus is just
wrong.”
Fitzgerald says the report only
covers Greater Melbourne, and believes the research should be applied
nationally.
“This key economic data simply must
be collected by government and we call on PM Malcolm Turnbull to fund the ABS
to officially measure speculative vacancies.”
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Affordability’s improving in Perth
Affordability’s improving in Perth
Posted on Friday, December 04 2015 at 4:23 PM
Housing affordability has further improved in Perth according to the Real Estate Institute of Western Australia (REIWA), with the latest preliminary data showing that Perth’s median house price is at $535,000 for the three months to November 30.
REIWA president
Hayden Groves says the median house price was consistent with the Real Estate
Institute of Australia/Adelaide Bank Housing
Affordability Report, released yesterday, which showed that housing
affordability in WA had improved across the September quarter and also the
year, with the proportion of income required to meet loan repayments now at
23.8 per cent.
“Perth hasn’t
been this affordable for homebuyers for several years, with our latest
preliminary data for the three months to November 30 showing that 42 per cent
of sellers are adjusting their selling price in order to sell.
“Further analysis
also shows us that the most significant adjustments across price ranges in the
Perth metro area for the rolling three months to November 2015 is happening in
the $360,000 to $500,000 range, which is traditionally the first homebuyer
market, and in the over-$725,000 range, which is consistent with what REIWA
members have reported in the current market,” Groves says.
The official
abolishment of the First Home Owner Grant (FHOG) for established homes in
October has predictably had a direct impact on sales volumes for the three
months to November, which came in at 1,768 – a drop of 13 per cent over the
last three months.
The total number
of listings for sale in Perth as at November 30 came in at 16,475, but peaked
during the month of November at 17,078.
“This is up 18
per cent over the three months to November and up 23 per cent on the year to
November 2014 but the recent fall in listings could indicate that listing
levels have peaked,” Groves says.
Rental market
Rental
affordability in Perth has continued to improve over the last three months too,
with the latest reiwa.com data showing rents at more affordable levels.
“The overall
median rent price for the three months to November 30 now sits at $395 per
week, a minor adjustment of $5 over the last month but a significant $45 on the
same time last year,” Groves says.
The median house
rent is now $400 per week, while rent prices for units sit at $375 per week.
“These current
weekly rent prices are also consistent with the results of the Housing Affordability Report, which
found that rental affordability in WA had improved in the September quarter,
with tenants now spending around 21.5 per cent of their income on rent,” Groves
says.
Rental listings
in the Perth metro area have increased 16 per cent over the last three months,
to 9,448, providing tenants ample choice.
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NSW goes digital with rental bonds
NSW goes digital with rental bonds
Posted on Wednesday, December 02 2015 at 2:23 PM
The New South Wales Government has launched an electronic system for the lodgement and refund of rental bonds.
Victor Dominello, NSW Minister for Innovation and Better
Regulation, says bringing the process into the digital age provides enormous
efficiencies.
“Each year NSW Fair Trading processes around 540,000
paper-based applications for the deposit and refund of residential bond monies.
“We are doing away with this cumbersome process by cutting out
the middle man and enabling tenants to lodge their bond directly to NSW Fair
Trading through an electronic transfer system.”
NSW’s Rental Bonds Online is the only scheme in Australia
where tenant bond money is deposited directly to the government, according to
Dominello.
“The new scheme provides tenants with greater confidence that
their bond money is securely held in trust, from the moment the payment leaves
their account.”
A pilot of the scheme began in July this year. Since then, more
than 2,000 real estate agencies and private landlords have signed up to the new
service, with more than 7,000 active accounts established and more than $5
million worth of bond money lodged.
Electronic lodgement is voluntary, with tenants able to choose
paper lodgement if they wish.
The service also allows tenants to record and save their bond
history online, which they can opt to use to support future tenancy
applications.
“Rental Bonds Online is expected to reduce red tape for
tenants, private landlords and real estate agents by approximately $20 million
per year,” Dominello says.
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No cut, as RBA leaves rate unchanged
No cut, as RBA leaves rate unchanged
Posted on Tuesday, December 01 2015 at 1:41 PM
Once again, the Reserve Bank of Australia has chosen to leave the cash rate at 2.0 per cent, meaning no more rises for 2015.
Governor Glenn
Stevens said in his message: “At today’s meeting,
the Board again judged that the prospects for an improvement in economic
conditions had firmed a little over recent months and that leaving the cash
rate unchanged was appropriate. Members also observed that the outlook for
inflation may afford scope for further easing of policy, should that be
appropriate to lend support to demand.”
He added: “The
available information suggests that moderate expansion in the economy continues
in the face of a large decline in capital spending in the mining sector.
“While GDP growth
has been somewhat below longer-term averages for some time, business surveys
suggest a gradual improvement in conditions in non-mining sectors over the past
year. This has been accompanied by stronger growth in employment and a steady
rate of unemployment.
“Inflation is low
and should remain so, with the economy likely to have a degree of spare
capacity for some time yet. Inflation is forecast to be consistent with the
target over the next one to two years.
“In such
circumstances, monetary policy needs to be accommodative.”
Stevens also mentioned that growth in
lending to investors in the housing market has eased and that supervisory
measures are helping to contain risks that may arise from the housing market.
The topic had been predicted by CoreLogic RP Data, which reported a 1.5 per cent fall
in capital city dwelling values over the month of November and a 0.5 per cent
fall over in values over the past three months.
While
the cash rate remained on hold, a less buoyant housing market is likely to
provide the RBA with a greater degree of flexibility in adjusting interest
rates without as much risk of over stimulating the housing market as they’ve
faced over previous months, a spokesperson says, adding that while the Reserve
Bank is likely to welcome a slowdown in the rate of home value appreciation,
the overriding objective would be to avoid a significant downturn in the
housing market, which would act as a weight on economic growth and potentially
affect financial system stability.
Despite
the stable rate setting, mortgage rates remain close to record lows, which
should continue to act as an incentive for homebuyers and investors considering
a property purchase.
The
first Reserve Bank board meeting of 2016 will take place in February.
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Study shows property prices unaffected by flight path
Posted on Monday, November 23 2015 at 12:15 PM
Aircraft noise has had minimal if any impact on property prices in suburbs near or under the flight paths to Brisbane Airport, a Queensland University of Technology (QUT) analysis of 26 years of property sales, rental and investment performance has found.
In fact, the study, commissioned by Brisbane Airport
Corporation, found property prices in some high-value suburbs with high noise
complaints increased at a greater rate than other similar suburbs unaffected by
aircraft noise.
Property economist
Professor Chris Eves and Andrea Blake from QUT’s School of Civil Engineering
and Built Environment and the QUT Air Transport Innovation Centre analysed
price, saleability, investment performance and capital growth from 1988 to 2014
of residential properties in 40 Brisbane suburbs either near the airport or
under a flight path.
“It is the most detailed and comprehensive analysis of
the impact of aircraft noise ever undertaken in Australia,” Eves says.
“In total we looked at more than 180,000 sales
transactions in 40 suburbs ranging from those whose residents recorded the
highest number of noise complaints to those which reported minimal or no
aircraft noise.
“Our findings suggest that factors such as proximity
to transport, the Brisbane CBD, schools, recreation facilities, the airport and
other services, far outweigh any negative impact experienced as a consequence
of being under a flight path or from aircraft noise.”
Eves explains the suburbs were classified by the
number of aircraft noise complaints recorded by Air Services Australia over the
past five years. These suburbs were classified as having high, moderate or
minimal/no noise complaints.
“Our analysis shows very little difference in growth
of house prices across high-value suburbs regardless of where they were
situated or their exposure to aircraft noise.
“For example, Bulimba, which is under an existing
flight path and records moderate noise complaints, has capital returns slightly
higher than New Farm, which isn’t subject to any noise complaints.
“The capital returns for Ascot and Balmoral, which are
currently not under a flight path, are less than the capital returns for
Bulimba.”
Eves says units and townhouses under Brisbane flight
paths also showed no impact on investment performance from aircraft noise.
“Rental properties under the existing main southern
flight path, which attracts the highest level of noise complaints, have a
rental market increasing at the same percentage as properties not located under
an existing flight path,” he says.
“In fact, over the 26 years, units and townhouses in
the high noise complaint suburbs showed an average annual capital return of
7.66 per cent, which is higher than the capital returns in the moderate noise
complaint suburbs of 7.40 per cent, but slightly lower than capital return for
no noise complaint suburbs.
“In higher value, middle socioeconomic suburbs, two of
the highest average annual capital returns for the 26-year period for houses
were achieved by Camp Hill (9.52 per cent) and Cannon Hill (9.72 per cent).
“Each of these suburbs is under the main southern
flight path and subject to high noise complaints. In contrast, Bardon, with
minimal/no noise complaints, achieved 9.02 per cent.”
Eves says Hendra, another higher value middle
socioeconomic suburb, adjoining the airport, had recorded moderate noise
complaints but outdid them all and achieved an average annual capital return of
10.9 per cent.
“Hendra is not currently under a flight path but will
be when the New Parallel Runway opens in 2020,” he says.
“Even when we looked at the only two lower-value,
middle socioeconomic suburbs in the study, we found similar effects.
“Mount Gravatt East, which records moderate noise
complaints under the existing flight path, had, at 7.93 per cent, a higher
average annual capital return than the Brisbane median of 7.72 per cent.
“In contrast, Chermside West, which has minimal/no
noise complaints under the existing flight path, had below the median growth of
6.46 per cent.
“Overall the study found that the value and price of
housing and units in Brisbane located under flight paths are determined by a
range of factors other than aircraft noise.”
Eves says that when the new proposed flight paths open
in 2020 there would be many suburbs that had less noise because aircraft
movements would be shared.
Brisbane Airport Corporation (BAC) corporate relations
head Rachel Crowley says the potential negative impact on property values was a
cause of concern for people living near an airport or under a flight path.
“We’re pleased that this study may provide some
comfort to people who may be anxious about whether or not their property value
is constrained by their location under a flight path,” she says.
“We also hope this study may convince property
developers, vendors and real estate agents that being open and transparent
about the presence of a flight path should not negatively impact sale price.
“Airports are essential national infrastructure and
the importance of their ability to operate unencumbered cannot be over-stated.
“Queensland is in the fortunate position of having its
major gateway airport both well-located and well-protected by a
significant buffer of industrial land, which protects residents from the worst
aircraft noise experienced in cities that have residential development far
closer to the airport.”
Suburbs
in the study
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Ducted air con and solar power best for depreciation
Ducted air con and solar power best for depreciation
Posted on Monday, November 16 2015 at 3:55 PM
Analysis by BMT Tax Depreciation has shown that ducted air conditioners, floating timber floors and solar power systems are the assets that generally have the highest depreciable value for property investors.
“Based
on our experience preparing thousands of property depreciation schedules, we’ve
found that these assets will average a combined depreciable value of
approximately $27,000 in a residential property,” BMT CEO Bradley Beer says.
“In
the first financial year alone, these three items could result in about $3,400
in deductions for the owner.”
While
these assets generally result in the highest depreciation deductions for
property owners, there are other items that BMT finds more frequently.
“The
three depreciable assets we find most often during a site inspection are hot
water systems, split-system air conditioners and bathroom accessories,” Beer
says.
“We
find that these assets have a combined average depreciable value of around
$5,000.
“For
an investor, these three items could result in a first financial year deduction
of $1,100 and a cumulative deduction of around $3,500 over five years.”
There
are also a number of assets investors easily miss and fail to maximise
depreciation deductions for, including smoke alarms, garbage bins and exhaust
fans.
“The
depreciable value of these items will usually total $1,200 and as these smaller
ticket items are often valued less than $300 each, they could also entitle
their owner to claim the full amount as an immediate write-off in the first
financial year,” Beer explains.
“The
deductions for assets found in an investment property add up and it pays for an
investor to understand how depreciation works and which items can be
depreciated.
“When
preparing a depreciation schedule for a property investor, specialist quantity surveyors
will complete a detailed site inspection to ensure no assets are missed,” Beer
adds.
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Perth tenants in the rental driver’s seat
Perth tenants in the rental driver’s seat
Posted on Wednesday, November 18 2015 at 1:40 PM
The latest Real Estate Institute of Western Australia (REIWA) analysis shows rents in metro suburbs fell again during the third quarter 2015.
Damian Collins, president of
REIWA, says Perth’s overall median rent price of $400 reflects a fall of $20
over the quarter and $50 for the year to September.
“When we break this down
further we see that the median house rent price is $420 per week, a drop of $10
over the quarter and $30 for the year to September, while the median unit rent
price is $395 per week, which is a decline of $5 over the quarter and $35 when
compared to the year to September.”
The biggest drops were seen
in Wanneroo South, Belmont and Stirling East.
While this isn’t great news
for landlords, improved affordability is a positive for tenants, Collins says.
He predicts softening to
continue in the near future, but is more bullish about the city’s long-term
prospects.
“As more large scale
multi-residential developments come onto the market, we will see an increase of
rental stock in the short-term providing tenants with plenty of choice, however
over the long term, with population trends forecast to increase, the Perth
rental market should adjust.”
Collins recommends landlords take time to assess their portfolio to ensure
their holdings are attractive to tenants.
“REIWA members are reporting
that while overall enquiries had dropped off, well-presented properties at
realistic prices are still being leased.
“They also reported that
properties that offer better amenities like air conditioning are in a better
position to find good tenants.”
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Rental rates showing little signs of increasing
Rental rates showing little signs of increasing
Posted on Friday, November 13 2015 at 2:48 PM
Rents can be a key indicator for property market conditions across Australia’s capital cities.
The
CoreLogic RP Data rental review, distributed each month and released recently covering
October’s rental market activity, provides a deep-dive analysis into the impact
rental rates may or may not be having on capital city property markets.
The October
analysis shows rents across the combined capitals were virtually unchanged in
October, down by -0.1 per cent over the month, with rents lower in four of the
eight capital cities. The annual rate of change has increased slightly from 0.5
per cent in September to 0.6 per cent in October.
CoreLogic RP
Data research analyst Cameron Kusher says: “The data points to an ongoing
softening of rental growth, particularly throughout this year. With just two
months remaining to year’s end, it seems that rental growth will be very soft
over 2015.”
Kusher points
out that the construction boom across the capital cities, coupled with slowing
population growth, low mortgage rates and the recent heightened level of
activity from investors, are the major contributing factors to the slowing
rental growth.
“Sydney,
Melbourne and Brisbane continued to record rental rises over the past year,
however each city is seeing a slowing in the pace of rental growth relative to
12 months ago,” he says. “Clearly, the increase in investment stock is
providing landlords with little scope to lift rental rates while the low
mortgage rate environment provides little incentive to push yields higher.”
National overview:
- Dwelling rental rates across the combined capital cities
are recorded at $483 per week and they have increased by just 0.2 per cent over
the first 10 months of the year while they’ve risen by 0.6 per cent over the
past 12 months. - Weekly rents across the combined capital city measure fell
by -0.1 per cent in October, but on an annual basis they recorded a slight rise,
taking annual rental growth to 0.6 per cent. - Only Sydney and Melbourne have recorded rental increases
greater than 2 per cent over the year. - Rents have fallen over the year in Perth and Darwin, while
the remaining capitals have seen rents rise by less than 2 per cent over the
year. - Currently combined capital city rental rates are $487/week
for houses and $463/week for units. - It’s anticipated that the
rate of rental growth will continue to slow over the coming months due to
increased supply of housing and rental stock and slower migration rates.
Looking
across the individual capital cities, over the past year Sydney and Melbourne
have recorded the greatest increases in weekly rents. Over the past month,
weekly rents have moved lower across every capital city except Sydney, Hobart
and Canberra, where they rose, and in Melbourne where they were unchanged. Over
the past three months rents are lower in all capital cities except for Sydney
and Melbourne.
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Tasmanian town planning laws to be simplified
Tasmanian town planning laws to be simplified
Posted on Wednesday, November 11 2015 at 5:09 PM
The Tasmanian Government is introducing legislation to simplify the state’s planning process.
Peter Gutwein,
Tasmania’s Minister for Planning and Local Government, says new laws will
ensure 80 per cent state-wide consistency across its Local Government Areas.
At present,
there’s only 15 per cent consistency across Tasmania’s 29 councils, a system
Gutwein describes as a “nightmare”.
“The [new] planning
system will be faster, fairer, simpler and cheaper, which will encourage more
confidence for those looking to invest and expand,” he says.
Mary Massina,
executive chair of the Tasmanian Planning Reform Taskforce, says the changes
have been a long time coming.
A single state-wide
planning scheme will remove what Massina calls the “single biggest barrier to
investment and job creation”.
“The creation of
a single set of planning rules will take Tasmania from the worst to first,” she
says.
Brian Wightman,
Tasmanain executive director of the Property Council, says the state had been
ranked last in his organisation’s Development
Assessment Report Card 2015, but the new reforms should change next year’s
result.
The reforms will
deliver consistency, drive improvement and “lead to the state moving off the
bottom rung of the planning ladder”, Wightman says.
“The property
sector is a major player in the state’s economy, contributing $2 billion in
Gross State Product, employing seven per cent of the workforce and driving a
significant resurgence of activity across Tasmania.”
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