Landlords urged to keep eye on New Year’s Eve parties

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


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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


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    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


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      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

        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


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        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


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          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


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            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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              Article source: http://feedproxy.google.com/~r/API_Property_News/~3/0Ip9PNJawXk/tasmanian-town-planning-laws-to-be-simplified