Harry Charalambous – Plan Assist Property Update

More Generation X parents are rejecting the suburban dream to raise their family closer to the city, fueling steep housing price rises.

The trading-up market is already seen as one of the strongest in Sydney’s property market, particularly among four-bedroom houses in inner-ring suburbs, according to the Australian Property Monitors economist Matthew Bell. “Most of those housing upgrades have been selling into what has been a strong first-home buyers market in previous years and the ripple effect of that is flowing upwards.”

That market has also been boosted by a lack of stock.

APM figures show the median price for four-bedroom houses in inner-ring suburbs has increased 12.4 per cent in the year to June (to $1,595,000), compared with only 6.3 per cent (to $520,000) for similarly sized houses in the outer ring.

Inner suburbs well stocked with four-bedroom properties showed among the best median price growth in the past year, such as Longueville (up 43.75 per cent), Lane Cove (35.3 per cent), Randwick (31.25 per cent), Queens Park (21.2 per cent), South Coogee (36.9 per cent), Haberfield (10.9 per cent) and Marrickville (19.2 per cent).

The figures reflect comments by the demographer Bernard Salt about Generation X, aged in their 30s and early 40s, forming a “critical mass” of parents choosing to remain close to the city rather than move to fringes.

“Gen X are very lifestyle driven,” research director of RP Data, Tim Lawless said. ”They tend to want to work and play in the same area … the city usually. Gen X don’t want a yard to maintain. They want a short commute, with friends and retail nearby.”

The demand for larger houses in inner areas is heightened by a trend among emptynesters to hold onto family homes for longer to sell in a hopefully stronger market as a quasi superannuation fund, the chief executive of Raine & Horne, Angus Raine, said.

(By: Lucy Macken, July 24, 2010)

Property prices in mining towns are once again on the rise, following the settled debate over the Resources Super Profits Tax (RSPT).

Property prices in mining towns are once again on the rise, following the settled debate over the Resources Super Profits Tax (RSPT).

Ray White joint chairman Brian White says while results in the mining cities had been very average over recent months, “those cities reported a quick upswing as soon as the new Prime Minister declared that an agreement had been reached with the mining companies.”It seems that now might be an opportune time for buyers to invest in mining town property. With the uncertainty removed, investors now know where they stand and with a combination of market knowledge and good timing, significant returns can be made.

According to Cameron Kusher, RPdata research analyst, the strong resurgence in commodity prices over the last year “will mean a higher level of demand for housing in what are generally chronically undersupplied markets.”He identifies a number of stand-out regions that will likely offer strong prospects for property buyers: Roebourne Local Government Area (LGA) in WA, and the coal-rich LGA of Isaac and the Western Downs region, both in Queensland.

In Roebourne LGA, for example, the median house price sits at $880,000, only 3.3% below peak prices experienced in 2008. With a huge demand for iron ore and a limited scope to expand the existing township, house prices in the region are being pushed up.

Kusher says it isn’t just the prospect of growth in house prices that makes Roebourne attractive, with the median weekly advertised rents recorded at $1,575, suggesting an indicative gross rental yield of 9.3%.Isaac LGA is experiencing similar trends, while Western Downs is likely to become a quick moving, resource-driven market of the future.

Kusher does warn property buyers that mining and resource-rich towns do hold an inherent risk due to their dependence on what is often a singular commodity.

When it comes to refinancing, almost half of borrowers turn to a mortgage broker for advice, the latest research shows.

According to Mortgage Choice’s 2010 Refinancers Survey almost half (45 per cent) of the 1,028 respondents surveyed said they had used a mortgage broker to help them refinance.

South Australians were most likely to enlist the help of a mortgage broker with one in two South Australians opting for a broker.

The survey also found that borrowers are motivated primarily by interest rates and bank fees when it comes to making a refinancing decision.

Almost one quarter of respondents said their main motivation for refinancing was to switch to a cheaper loan.

With the recent spate of rate rises and the possibility of more before 2011, as well as a renewed focus on mortgage exit fees Plan Assist’s Loan Advisor Anton Hamer said this was “no surprise”.

According to the survey the majority of borrowers – almost nine in 10 – who did refinance were saving at least $50 per month with 23% of borrowers reporting savings of more than $300 per month.

(By: Staff Reporter, Wednesday, 11 August 2010)

The federal government and the federal opposition party have ruled out the prospect of abolishing negative gearing.At a debate held at the National Press Club in Canberra last week, both parties said they would not consider abolishing the investment strategy.Real Estate Institute of Australia (REIA) president David Airey welcomed the government’s unanimous stance.”This is fantastic news for renters, affordable housing and real estate investors,” Mr Airey said.

Mr Airey added that negative gearing for the purpose of property investment was necessary as it addressed the supply of rental accommodation, which benefited the overall industry.

“The Hawke Government abolished negative gearing for property in 1985 only to have it reinstated in 1987,” he said.”During that period rents increased by 57.5 per cent in Sydney, by 38.2 per cent in Perth and by 32.0 per cent in Brisbane.”At the same time building approvals fell by 13.8 per cent,” he said.

According to Mr Airey, when negative gearing was reinstated, the government said that any tax advantages conferred by negative gearing were countered by the CGT regime when capital gains were realised.”To amend the current negative gearing provisions for housing as some critics have suggested would be treating real estate differently to other asset classes and create a resource misallocation,” he said.

(By: Staff Reporter, Wednesday, 11 August 2010)

1. Get to know auctions

Go to as many auctions as you can so you become familiar with how auctions run and what happens. The more prepared you are the easier it will be when you place your bid on auction day.

2. Have your finance ready

You should have a clear indication of how much you can borrow before you bid at auction.

3. How to bid

Once the auction starts you can make a bid at any time by raising your bidder’s registration card and calling out your bid.

4. What to take

Take your driver’s licence with you as you will need to register to bid. You will also need a deposit so take your cheque book along with you.

5. Stick to your limit

Set your limit before the auction and bid with confidence on auction day.”

To arrange a pre-approval before you bid, talk to one of our Home Loan Specialists on 02 9449 2333 or open up a new browser window and visit www.planassist.com.au