Tag Archives: Real estate

10 Reasons the Residential Market will be 5-10% Higher by the end of 2013

 

WORDPRESS SOLD

10 Reasons the Residential Market will be 5-10% Higher by the end of 2013
A word from John McGrath:

1. The Australian share market is recovering quickly & this will generate (& replenish) great wealth for many Australians

2. China is on the surge with an 8% anticipated growth rate this year (and beyond) & we will benefit more than any other country

3. We have record low interest rates with existing & new borrowers reaping the benefits making property more affordable

4. We have a nationwide housing shortage & will for some time, so demand will outstrip supply in an improving sellers market

5. Cash & term deposits are becoming far less attractive & many people will see the time is right to switch from cash into growth assets

6. Rents will continue to climb in the face of the housing shortage providing investors increasing yields over the next few years

7. Self-managed super funds (SMSF) investing directly in residential property is the biggest change I’ve seen in the last 12 months

8. Luxury homes are back by 20%-40% in value & will provide great buying for the recovering professional market buyers (read Palm Beach weekenders are about to become mega popular again!)

9. Most experts are tipping a landslide change in Federal Government which will give great confidence to the business community

10. As all the above happens in our connected community we’ll see a surge of confidence & FOMO which will stimulate continued investment over the next 3-5 year cycle.”

Cairns is continuing on a recovery track as business and economic activity continue to build, the progress to date has been significant and more good news about new projects starting up creating long term jobs.

5 New Year resolutions for buyers

 Is 2013 your year for property? Are you getting serious about entering the market? Whether it’s your first time around the block, or a second lap, you’ll want to stick to these resolutions.

 Get your financial house in order

Too many of us have over committed ourselves in recent years, letting dreams get dangerously out of touch with realities.

If you want to buy a property in 2013, make sure you’re ready financially, and you have a rational plan that doesn’t over extend your capacity. It’s no use living in a palace and scrounging to eat!

Pay down bad debt (credit cards and other high interest loans); get a hold of your credit history and assess it; draw up a budget and stick to it; identify where you can be saving even more for a deposit.

Make sure you have a solid savings plan, and enough saved for a back up plan if things go wrong. Check your insurance status. If something happened to you, could you still afford the mortgage repayments you’re looking to take on?

Get financial advice from a professional and understand exactly how much money you can borrow and repay comfortably before you start falling in love with properties. Remember that prices are often indicative and the market is competitive. Don’t set yourself up for disappointment by giving yourself no room to move when you’ve found the perfect property.

Fiscal irresponsibility isn’t just bad for you, it’s bad for the market overall, so make sure you’re in control of your money and it’s not in control of you. Peace of mind is priceless.

Get to know the neighbourhood

Resolve to learn about the place you’re thinking of moving. Don’t just look it up on Wikipedia, really get to know it.

Use Suburb Profiles to get a sense of the property market in that area. Look at median prices, demand and supply ratios, demographics, how long properties are on the market, and other useful data.

Research local publications, bloggers and other voices that give you an understanding of the area.

Go beyond the facts and sample the experience of being there. Take a trip and mix with the locals (not the tourists). See what they get up to, and chat to them about the best places to eat, drink, shop, work, play, learn and relax.

Field work isn’t so you can feel warm and fuzzy about potential neighbours (though you might). Sometimes you can only see a suburb’s best and worst aspects in person. What looks good on paper might reveal itself differently when you’re seeing it with your own eyes, so get the full picture before investing in that location’s future.

Shop around

We look for reviews, ask questions and compare notes on almost everything we buy, especially if it’s expensive. Yet we still usually sink more time into comparing the best deal on a new television than a home loan product.

Mortgage brokers are great for helping you compare notes, but remember they work on commissions. That doesn’t mean they’ll give you bad advice, but it does mean you need to ask hard questions about disclosing any commercial agreements that might influence their recommendations.

Long before you find your perfect property, shop the market up and down to learn which deals and home loan products are best for your financial situation and property goals.

Comparison websites like ratecity.com.au, homeloanfinder.com.au and iselect.com.au are among the best tools to help you make an informed choice. They list more than 100 lenders and give a blow-by-blow comparison of loan product features. Use them to make a shortlist of deals right for you, and follow-up with lots of pointy questions for those lenders.

Assemble a superhero team

Buying a property is a little like going into battle. You need a world-class squad of ninjas to help you pull off the mission. No matter how smart and seasoned you are, it’s not something to do on your own.Do your homework and select a great real estate agent, conveyancer, lawyer and accountant (if you don’t already have them in your life).

Invest the time in finding these people. Ask for personal recommendations, check online reviews and interview them with a list of questions you’ve prepared earlier.

Enjoy it

Home buying is serious, intimidating stuff. It’s a big commitment that involves a lot of paperwork, furrowing and heightened emotions.

You’ll hear how you should try to take the emotion out of the process as much as possible, so you don’t get yourself into a bad deal, or make a choice in the heat of the moment you’ll later regret.

It’s sound advice, but let’s face it – buying a home, especially your first ever, is a life adventure you want to live to its fullest.

There is real joy in searching for a forever home, choosing walls and a roof that don’t just do a job, but reflect who you are in the world at that moment.

Give yourself the time and space to enjoy the search, the discovery, and the moment it becomes yours. Let yourself be proud of what you’ve achieved!

Source: realestate.com.au

Homebuyer confidence rises. 2013 outlook is promising

5 Years from now

The number of Australians who believe it’s a good time to buy a home surged 11.5 per cent over the December quarter, reaching highs not seen in three years.

CommSec chief economist Craig James says the Westpac/Melbourne Institute’s latest index shows more people are keen to park their money in bricks and mortar.

“Real estate was regarded as the second wisest place to put new savings, with that reading just below seven-year highs,” James says.

Housing finance commitments slid slightly by 0.2 per cent in October, new data shows, but total home lending for the year is up four per cent.                                   Loans for land blocks rose by 17.5 per cent over 2012, which is the strongest pace of growth in three years.

“All the pointers suggest there are better times ahead for the housing market, representing good news for builders, tradespeople, material suppliers and a raft of retailers.”

On the wider economy, James says there’s good momentum moving into the New Year. In particular, forecasts for the resources sector show Australia is set to “reap extraordinary earnings” over the coming year. James says the outlook is far brighter than the “doom and gloom school would have you believe”.

Export volumes are predicted to increase substantially and the reason for a forecast drop in export values is due to the drop in commodities prices.        While general consumer sentiment fell by 0.2 points to 100 on the index, loans to buy new or used cars hit a record 1.23 billion in October.

James says the drop is disappointing at first glance but digging deeper shows “sharp divisions across the country” are to blame.  “In short, conditions are very mixed and how you feel depends on where you live and your housing status,” he says.

He believes the data suggests the Reserve Bank may opt to stay on the interest rate sidelines in the early part of 2013, preferring to see how the economy responds to rate cuts.

Source: Australian Property Investor

Negative gearing and its impact on the housing market.

HOUSEIn its most simplistic form, negative gearing for investment housing allows investors to deduct their losses against their personal taxable income.  These losses may occur when the investor incurs costs such as interest on a home loan as well as maintenance and other small expenses on an investment property. However, it is important to note that negative gearing is not unique to the property asset class; it also applies to businesses and shares in Australia.

The most important thing to realise about asset negative gearing is that it is fundamentally off-setting a loss.  Although you can claim that loss on your tax return, the investor must carry the cost of that loss throughout the year.  Ultimately, when investing, most purchasers would be hoping that rental rates increase over time and result in the asset moving from a loss-making one to an income producing one.

It is also important to note that between September 1985 and September 1987, negative gearing laws were changed.  The government quarantined negative gearing interest expenses on new transactions.  As a result, investors could only claim interest expenses against rental income, not other income.

Given that negative gearing provides a benefit to investors, we look at the impact these changes had on the investment market over the two-year period.  The first component is the impact the changes had on the rental market.

According to the rental component of CPI data, rents across the capital cities rose by 21.8% over the two years to September 1987 (the period during which negative gearing laws were changed).  The increase in rents was most pronounced over the period in Sydney (26.1%) and Perth (31.1%).  As a comparison, over the two years to September 1985, rental costs rose by a lower 17.0%.

The data clearly shows that rental growth was present over this period and it was greater than it was over the two year period directly preceding it (The above chart shows the period for which the negative gearing rules were changed and are bolded black).  Here you can see that rental growth was well above average, particularly recent averages, but it was not unprecedented with rents growing by a greater amount on an annual basis in late 1982 and early 1983.

Another important determining factor is the demand from investors over this period.  Unfortunately the Australian Bureau of Statistics does not provide information on the number of loans to investors; rather it provides the total value.  The total value of investment finance commitments in September 1987 was 41.5% higher than in September 1985.  These figures seem to suggest that at that time there was no weakness in demand for investment housing however, a clearer outcome would be apparent based on the number of loans rather than the value.

The reason why negative gearing was reinstated in September 1987 was that it was proclaimed that rents rose sharply on the back of a fall in housing market investment.  However, it doesn’t look as if investment in the housing market dried up throughout this period. Rents clearly did rise quite sharply throughout as demonstrated.

Many in favour of removing negative gearing from property say that it should occur due to the fact that housing is an unproductive asset class.

My argument is that given that housing provides shelter, if investors don’t purchase these assets, it would then be the responsibility of the Government to provide this shelter.  Ultimately, that would mean that anyone that pays taxes would be funding housing for those who can’t afford it themselves.

One of the arguments against negative gearing is that the tax deductions afforded to investors in the housing market reduces government revenue.  However, if investors did not provide shelter to those that can’t provide it to themselves, government revenue would already be reduced due to the fact that this responsibility would fall on the Government.

If we look at the recent Australian Bureau of Statistics (ABS) dwelling approvals data, it is interesting to see just how much of the new housing supply is created by the private sector as opposed to the public (government) sector.  According to the ABS dwelling approvals series which began in July 1983, between July 1983 and October 2012, 4,355,266 dwelling approvals have been given to the private sector compared to just 228,843 to the public sector.  Over the last 29 years (give or take a few months), public housing approvals have accounted for just 5.0% of all dwelling approvals.  This is less than 8,000 approvals by the public sector each year!

Over the 12 months to October 2012, 145,515 dwellings approvals were granted to the private sector (98.6%) compared to just 2,065 to the public sector (1.4%).

The most recent Census data shows us that of those homes occupied, 29.6% are rented (investment properties).  Based on this data, if we assume that without the private sector building homes for investment purposes, the public sector would have to account for 29.6% of all dwelling approvals to cover those in rental accommodation.  Over the past 12 months this would have equated to 43,684 dwelling approvals.  If we also consider that the median home price across Australia as at October 2012 was $386,000, and if the Government had to buy the land and build 43,684 homes, this would cost the Government of the day $16,861,900,480 based on the number of approvals and the median home price.

Of course this is a rather simplistic calculation and if the Government were to build homes on their own land it would cost them less as that figure includes land and building.  Also, it is unlikely that private investment in residential housing would cease without negative gearing but I would expect that it would fall.

The most recent taxation statistics data shows that over the 2009-10 financial year, $4.81 billion in net rental deductions were claimed by taxpayers.

In order for the Government to break even to allowable deductibles from tax returns they would have to be building those 43,684 homes at a cost of $110,100.  Based on the current median home price across the country at $386,000, they would have only been able to build 12,461 homes over the past 12 months or 8.4% of the total building approvals over the past year.  It should be noted that not all new builds are for investment purposes but if we assume that 29.6% are there is a significant short-fall.

When you look at these figures it is obvious why negative gearing is unlikely to be removed.  Whether the removal of negative gearing impacted investment or not, and whether it lead to an increase in rents is a secondary concern relative to how much it would cost the Government to supply public housing for the almost 30% of Australians that don’t own their own home.

These figures are not to suggest that if in the case negative gearing was removed, there would be no investors in the market however, the appeal of negative gearing is part of what attracts many investors to the market.  Without negative gearing it is likely that there would be fewer investors and therefore less private developers delivering new homes coupled with a greater need for the public sector to provide housing.  The flow on effect may also be that there would likely be lower demand for housing credit.  Although some proclaim removing negative gearing would cause house prices to fall, I would expect that new housing supply would be even tighter as developer’s struggle to achieve pre-sales for new development, this may in-turn force prices higher than they otherwise would be.

By looking into the figures in more detail, it makes good economic sense for the government to allow housing investors to negatively gear their properties so that the significantly greater cost of providing social housing is not borne by the Government and ultimately the Australian taxpayer.

Source: Cameron Kusher. RP Research

Reasons selling over Christmas can cheer buyers

Don’t fret if you’re trying to sell your home as the tinsel’s going up. There are some little known advantages to selling through Christmas and new year.

There are challenges to selling your property through Christmas and the new year. Many agents close up shop and have a break, people get distracted with presents and parties, and let’s face it… most of us are just plain exhausted.

But if you find yourself selling over the holidays, don’t despair. In some ways, it can be a good thing. You just need to know where your advantages lie.

Spring Fallout
The Spring selling season is winding down, and many who’ve parted with their home are now on the hunt for their next property.
If the season was competitive they’ll be a good number of people who missed out on their dream home and need to close the deal before the end of the year.

Buyer Accessibility
Though it’s a busy time of year, most people have more time up their sleeve to scout properties they’ve had an eye on.
Normal work schedules make viewing lots of properties a challenge. As workload and commitments slow down, motivated buyers have much more time to search through properties that appeal and get out to see them.

Less Competition
Selling at the height of Spring or Autumn means you’ll need to work hard to stand out from a crowd. There are usually less properties on the market over Christmas and New Year, meaning motivated buyers will have fewer prospects to tempt them.
By January and February, property listings are surging once more, and demand for your place may dip.
Milk the fact you’re one of a special few.

How We Feel
With less work and more merriment, people generally feeling happier and more relaxed over the holidays. When buyers are cheery, they’re in a better mood to negotiate and more likely to act. The process should be easier on all parties.
Starting a new year and wrapping the previous one makes most people reflective. We think about what we did and didn’t do, our goals and dreams. How we did on that New Year’s resolution list from last year. It’s a time of taking stock and reinvention – the perfect state of mind for moving on to a new home and a new chapter of life.

Auction Aversion
They’re a great way to produce top prices for properties in certain areas, but auctions can be intimidating for a lot of buyers out there.
Auctions tend to shut up shop over Christmas and don’t pick up until the new year. If you’re selling through that period, more than likely you’ll be selling via private treaty, which will put many buyers at ease.

Romantic Appeal
Depending on where you live and how you decorate, a home can have a unique appeal during the Christmas season. If your target market is families, you can tastefully dress your property so it lives and breathes the perfect family Christmas.
Buyers can get more emotional over the holidays, so appealing to the heart strings isn’t as taboo as usual. Embrace the season and you’ll connect with others who love it.

Rental Transition
The rental market gets noisy this time of year. Leases are up, and people are working out their next step – new place to rent, or, for many, time to finally buy. Catch them while they’re in transit.

Paperwork
Tax requirements or strategic maneuvers, end of year bonuses, administrative headaches…

There’s a bunch of reasons buyers might want or need to get their paws on a new place before Auld Lang Syne kicks in. Make it a smooth proposition for them and bundle your property as the solution to their problems.

May Santa deliver the perfect buyer for you!

Source: realestate.com.au

Rate cut likely next week, and here’s why.


THE Reserve Bank will probably cut its official interest rate next week. That will take it back to the historic low-point of 3 per cent.

This was reached at the peak of the global financial crisis. It would though, be neither surprising nor shocking if it didn’t.

Not surprising, because like all the rate decisions in recent months, this one is again finely balanced. It could reasonably go either way.
Not shocking, because the – fully understandable – bleats from retailers aside, it really would not be the end of the world, if the RBA didn’t cut.
We all get terribly fussed over 25 points, which ultimately are neither here nor there.

Another 25 points off the official rate – perhaps 20 points off most home loan rates, but also it is very important to emphasise, 20-25 points off rates on deposits which also are key to spending, as well, is not going to unleash a spending binge.
Yes, it would probably give the critical three weeks to Christmas and the two weeks through the new year a boost.
But it’s not going to miraculously save the retail industry from its much more fundamental and much more intractable structural problems.

In particular, that we were already ‘overshopped’ in the good old days before the GFC. And both the post-GFC switch from spending to saving and the explosion in online shopping – more what it does to bricks and mortar margins than the actual dollar sales lost – have made it very tough at the retail coalface.
The 25 points off the cash rate, even adding it on to the 150 points of cuts already delivered, is not going to wash away all those really fundamental structural negatives.

Now the recommendation that governor Glenn Stevens will take to the board meeting next Tuesday was formalised yesterday afternoon, as it always is.
The recommendation, in the overall board papers, however, only goes out this afternoon, so it could be changed if there was shocking new information.

On the assumption that the recommendation was to cut, ‘something’ would have to suggest we were about to be ambushed by a sudden and unexpected boom. To persuade the RBA to stay its hand again. Some commentators have suggested that today’s capital spending numbers will be critical to the rate decision.

In practical terms, that could only be in one direction – indications that capex spending intentions were slowing faster than the RBA already anticipates. That is to say, to confirm the recommendation to cut.

As Terry McCrann explained two weeks ahead of the Cup Day meeting – at which the overwhelming majority of commentators expected right up until the day of the meeting, to see a cut – that there was in fact no way the RBA would cut after the too-high underlying inflation revealed in the September quarter figures. That was confirmed by Stevens in his statement on the day of the meeting, referring to “prices data slightly higher than expected.”

That was repeated in the subsequent formal minutes. And then in a speech last week, Stevens explained the Cup Day decision to leave rates unchanged with: “in addition, the latest inflation data, while not a major problem, were a bit on the high side.”

Simplistically this might suggest that Stevens would now want to see the next quarter’s inflation data before opting for a cut. That would postpone things to the first meeting back for the new year – in February.

A series of points counter that. First, the inflation genie didn’t even stick its head out of the bottle, far less leap out – it was only a “bit on the high side.”

Stevens needed to separate another cut from the inflation data, but only needed an immediate separation. A rate cut decision would go straight back to being ‘live’ at the next meeting.
That’s on the absolutely critical assumption that the RBA believed a further cut or cuts was likely to be necessary or even just appropriate.
And that was said precisely in the minutes: “Members considered that further easing may be appropriate in the period ahead.”

As Terry McCrann explained two bits of data would be critical. The jobs and jobless numbers and the wage inflation data. The jobs data was softish without being dreadful. It didn’t demand a rate cut, but it certainly ‘encouraged’ one. Provided wage increases were not threatening.
The subsequent wages data was lowish enough to allow the RBA to cut if it wanted to. But not that low, without being threatening, to make a cut a certainty.

Add it all together, a cut next week – rather than leaving a four-month gap from the last cut in October to the next meeting in February – is the ‘no regrets’ option.

Source: Terry McCrann Herald Sun

For Sale Christmas Style

Living in a popular holiday destination like Cairns, means that your on-the-market home could attract visitors, not only of the family and friends variety, but of the potential buyer kind who are looking to relocate from interstate or overseas.

At this time of year the word ‘declutter’ seems unspeakable when placed in the same sentence as ‘decorations’, ‘holidays’ and ‘family’. However, the reality for you this year is that your home is on the market and it’s a game-changer. You don’t want all of your hard work preparing your home for sale to go to waste over the holiday period.

So how do you balance presenting your home to potential buyers and welcoming your family and friends during December and January?

‘On the twelve days of Christmas my agent said to me…’

1. Creativity is Key
Less is more when styling your home for sale so look at everything with a ‘half as much is twice as good’ attitude this year. Your focus is on inspirational ideas that halve the spatial impact whilst delivering double the benefit to family, friends and onlookers alike.

2. Setting the Scene
Potted colour by the front door is often recommended when styling a home for sale. At this time of year a vibrant door wreath can serve just as well to show a clear path to the front door for first-look drive-by viewers.

Door wreath viewed at http://retrorenovation.com

3. Colour Fusion
Christmas colours complement every palette from beachy blues to earthy tones and everything in between. When selling your home during the festive season, remember to use a colour palette indoors that blends with your existing colour scheme rather than a boldly contrasting one.

4. Star Attraction
This year, your home is the star, not the colourful decorations. Christmas accessories, such as your Christmas tree, decorations and lighting should accentuate the size and features of the rooms without overcrowding them.

5. Deck the Walls
Instead of pulling out the large traditional tree perhaps try inexpensive Christmas wall decals that make your living room look larger, fresher and modern. (Cutely decorated baby optional.)
Christmas Wall Decals from http://www.babyology.com.au

6. Religious Relief
Christmas is a wonderful time of year that is enjoyed by many Australians regardless of their religious origins. Celebrating the season without overtly religious overtones in your home-for-sale will add appeal to the broadest number of potential buyers.

7. Decor’ations
Simple vases and platters are inexpensive ways to add consistent style during and after the celebrations. The trick is to find items with year-round appeal that won’t be out of place in the wake of Santa’s sleigh.

Florals courtesy of http://www.floralimages.com.au

8. Lightening over Lighting
Remember, less is more when presenting your home to the market. Overdoing festive lights can detract from the features of your home inside and out. Far better to invest in washing windows and replacing interior bulbs with the highest energy-efficient wattage. These will show your home in the best possible light to potential buyers.

9. Candle Power
No other decorator item says Christmas quite like candles. They effortlessly blend your on-the-market home’s style with your celebrations. It’s recommended that you place candles at least 3.8 cm apart to make sure they burn evenly. Candle displays are also effortlessly restyled after the festivities.

Candles available at http://www.partylite.com.au

10. Storage Solutions
You want to be able to respond quickly to potential buyer requests to view your home, so enlisting the support of guests and having a place to store their bedding and belongings during the day is essential. Quick storage solutions will help you stay in control of your home’s presentation whilst on the market over the holiday period.

11. Glamour finishes
Can’t help yourself? Satisfy your Christmas styling urge this year by wrapping your gifts in glamour colours and metallic finishes. Go crazy with gold, silver, bronze and copper papers, ribbons and bows.

12. Giving Double
While not strictly a styling idea, gift cards or vouchers are a great gift idea when time and space are restricted. They take up a fraction of the floor space as traditional gifts but may be worth twice as much to your loved ones once the Boxing Day sales kick in.

Source: http://showsell.com.au

Are the RBA cuts finally beginning to change consumer sentiment ?

Australians are beginning to respond to interest rate cuts earlier in the year, with consumer sentiment surging to its highest point in 19 months.
The Westpac Melbourne Institute Index of Consumer Sentiment for November, released on Wednesday, rose 5.2 per cent to an index level of 104.3 – its highest point since April 2011.

A reading below 100 indicates more consumers are pessimistic than optimistic about the economy.
Westpac chief economist Bill Evans said the result was unexpectedly positive, given sluggish performance of the previous readings.
“After a long 16-month period when it held below 100 for 14 of those months, we are finally starting to see that the Reserve Bank (of Australia)’s 150 basis points of interest rate cuts is having an impact,” he said.

He added, though, that the index was still only 0.9 per cent above its level of this time last year.
Mr Evans said the uptick in sentiment was most likely based on global factors, as well as the RBA’s rate-cutting decisions in May, June and October.

However, a desire to boost conditions in the economy could prompt the RBA to consider easing rates at its board meeting on December 4.
“The Australian economy is facing uncertainty around the mining sector and with contractionary fiscal policy and a punishingly high Australian dollar,” Mr Evans said.
“We need further rate cuts to help build on these early signs that lower rates are having an impact on households’ confidence.”

All components of the data improved in November, with a rise of 11.1 per cent on the sub-index measuring views on family finances compared to a year ago, and a rise of 1.3 per cent on the measure of expected family finances over the next 12 months.

Australians were also positive about economic conditions over the next 12 months and five years, with the relevant sub-indices improving by six per cent and 3.4 per cent respectively.
The sub index tracking whether now was a good time to purchase a major household item rose 5.1 per cent.

However, state-by-state results suggested there was still some concern about the longevity of the mining boom, with confidence falling 5.2 per cent in Western Australia, and 8.7 per cent in South Australia, perhaps as a result of the Olympic Dam project being cancelled.

Commonwealth Bank senior economist John Peters said the survey suggested Australians were generally more positive about domestic and global conditions in November.
“It appears that the cumulative interest rate cuts over 2012 have finally propped up consumer attitudes and improved family finances,” he said.
“As well, a stable unemployment rate over November and the decisive re-election of Barack Obama in the US presidential election are likely to have had some positive influences on consumers.”
Source: Nine News Finance

Are There Genuine Signs of The Long Hibernation Being Over?

In various recent articles, I’ve tried to explain how Australia’s underlying fundamentals are actually very solid.
And by most measures, our economy seems to be travelling at close to its full capacity.
However, the contradiction is that Australia’s budget should now be running at a substantial surplus. And the reason it’s not relates to a number of structural issues.

Even though the high dollar is causing problems for our manufacturers, unemployment is running at just 5.4% — less than 0.5% above what economists deemed to be “effective full employment”. Because when it falls below 5%, this tends to put pressure on wages.

Anyway, it is the feeble retail sales (through a continued high level of savings) which seems to have become the most visible sign of general consumer conservatism. And this is what’s top of mind with most people.
However, in his column in the Age Harold Mitchell touched on the record level of betting that had recently occurred at the Caufield Cup.
And he then asked “… what does that mean when most parts of the country have been stumbling along in the doom and gloom for months?”

But there are other pointers as well …

Mitchell also highlighted the record level of new-vehicle sales; along with the considerable increase in overseas travel.

Clearly, the GFC frightened most people. But maybe, they have now become bored with saving. And are prepared to spend once again — provided it doesn’t cause them to increase their personal debt levels.

Rather cleverly, the car industry seems to have plugged into this consumer sentiment — by offering “0% finance, and 5 years to pay” on any new purchases.
That way, you are able to buy your new car … without having to create another interest meter ticking over.

Bottom Line:

You are now seeing a growing number of signs that people are finally stirring from their long hibernation.
Moreover, Super Saturday weekend’s strong auction results (with clearance rates for Sydney at 68%, and 66% for Melbourne) … have further confirmed an underlying strength, within the residential property market.

Therefore, the traditional holiday break over this Christmas may well provide the tipping point needed for an overall lift in confidence to emerge during a 2013.

And this also makes it the perfect time for you to acquire a neutrally-geared Commercial property investment … as the market moves towards its expected peak, in 2018-19.
Source: Chris Lang. Propertyupdate.com.au

Law reform welcomed by the real estate profession

Tuesday 23 October 2012
The Real Estate Institute of Queensland (REIQ) has welcomed the announcement that the State Government will simplify the key piece of legislation which regulates the real estate profession.

Attorney-General Jarrod Bleijie made the announcement at the REIQ’s Annual General Meeting in Brisbane today.

The reforms will involve splitting the Property Agents and Motor Dealers Act (PAMD Act) into four separate Acts to better reflect and represent each of the sectors. The State Government has also committed to reducing red tape during the reform process.

REIQ chairman Pamela Bennett said the REIQ had lobbied for many years on behalf of its members to have the PAMD Act streamlined.

“A review of the PAMD Act in 2008 reported that consumers, the industry and fair trading officials found the legislation difficult to navigate due to its breadth,” she said.

“The REIQ worked hard with the then-State Government to facilitate change and it was announced more than two years ago that the legislation would be split.

“Unfortunately, there has been little progression since that time, so the REIQ and the wider real estate profession congratulate the Attorney-General and the State Government for their commitment to simplifying the buying and selling process for all Queenslanders.”

Ms Bennett said the REIQ had been involved in consultation with the State Government since the election to ensure the needs of its members and the wider community were being addressed.

“The simplification of the legislation will not only make life easier for all those who work in the real estate profession but will also provide significant benefits to consumers during the buying and selling process,” she said.

“The REIQ will continue to work closely with the government to ensure the reforms are a success for buyers, sellers and agents.” Source: Real Estate Institute of Queensland