All posts by : Chris Brown

There are two schools of thought when it comes to enhancing your lifestyle and increasing property values. 

Making the most of raw material (i.e. your place of residence or investment property), where location and median house prices are desirable, suggests the need for a complete overhaul or partial home improvement.

However, if your property is irreparable or the ongoing renovation bill is beyond your means, interest and energy, it might be time to make amends. This entails either starting afresh with a new build or moving further afield. 

Asking yourself a few crucial home truths and answering them honestly and impartially will determine if you should stay, redo or go.

If you’re planning to stay

You should first consider the cost and time factors involved in a comprehensive renovation of your existing property. A custom-built kit home looks good on paper, but there are reasons for their affordability and financial incentives, including negligible room to move on design amendments.

Of course, signing up for a project-built property often takes into account any unexpected legalities and extra expenses. The build quality depends on the experience and reputation of the home builder, so research media sources carefully and ask for referees or testimonials.

Employing the services of a registered architect ensures an expertly designed, and original, end result. This obviously appeals from a lifestyle and property values perspective. However, how much is too much to pay when considering the type and style of residence for the current location, as well as your long-term goals?

When balancing these factors against median price trends in your region, you might be advised to rebuild or renovate with a master builder who allows for floorplan amendments or additions — while also providing an affordable price point.

The detonation equation

Before you set your sights on obliteration, bear in mind that custom builds can cost up to 90 per cent more per square metre than volume builds. If budgets are tight, minimising space in favour of a unique, high-quality build should be your goal. 

Timeline is another crucial factor. Consider that construction projects invariably involve delays, either major or minor. While these are often contractually accounted for, it’s important to have an alternate plan in the event that moving-in expectations are extended. 

Complete rebuilds and even minor renovations can be stressful, costly, time-consuming and messy. But if you’re prepared to manage the emotional wear and tear and have peace of mind of employing a quality builder/architect, the finished product can be worth the ongoing trials and upheavals.  

Set on your next property adventure

If the financial outlay and lifestyle stress of rebuilding or renovating seem overwhelming, your next property acquisition may well await. 

This also poses various questions about whether a fresh change of neighbourhood or region is on the agenda. Balance this proposition against surging property prices and your long-term plans. Can you afford to buy in the same area or are you willing to compromise on cost versus property type by purchasing further away? What is your major lifestyle aim (i.e. downsizing opportunities, occupy now/rent later or younger families who require a larger home)? The answer will predetermine your next property of choice. 

Real estate experts suggest there’s always a different type of residence and location to suit every stage of your owner-occupier or investment goals. Securing suitable options at the right price are key considerations for most home buyers. Consult your local agents to receive qualified advice about taking the next step in your successful property journey. 

Selling your home is one of life’s major decisions — with successful outcomes often attributed to the real estate agent representing your property. So, it makes sense to do your research if you aim to minimise stress and maximise financial returns. 

Big or small: tailoring a perfect fit 

Broadly speaking, smaller boutique agencies can claim to have a personal touch, tailoring marketing campaigns and providing the flexibility of principals working in a hands-on role. On the other side, bigger agencies have the resources and reach to bring more buyers to your door. 

But smart vendors should survey the total package being delivered, rather than focusing on the bottom line of how much commission the agent will accrue. 

Real responsibilities: in a nutshell

The estate agent is responsible for advertising the property, showing potential buyers through it, conducting negotiations, arranging the contract note, and following the sale through to settlement.

Prospective sellers should seek the opinion of at least three agents, effectively auditioning them for the role. 

But before even selecting the key three, vendors should study auctioneering techniques over several weekends, personal presentations at open for inspections, and even call the respective offices to check on the firm’s professionalism, courtesy and efficiency. 

Shortlist hot seat

Once you have developed a shortlist of agents, it is a good idea to create a set of questions to ask the listing agents. Besides the standard queries about sales results for similar properties in the area and marketing expenses (ask for an itemised schedule and payment plan), further questions should include:

• What type of buyers do you believe would be attracted to this home?
• What do you feel are the good/bad points of the property?
• What do we need to do to improve its presentation?
• Will you (personally) be handling all aspects of the sale?
• Can we talk to some of your past clients?
• How will you help me understand the conveyancing process?
• How did you arrive at an estimate of the value? 

Once you analyse the various responses, marketing plans and costs, it’s then fair to compare your top contenders and handpick the chosen one. 

Ballpark figure on the money?

The eternal questions of what the home is worth and when is the best time to sell should also be tempered with the current economic climate — which can affect values, leading to re-evaluation of expected price targets. 

In most cases, vendors will opt for a property representative they feel most comfortable with, preferring the perception of honesty and quality that money cannot buy.

Whichever real estate agent you choose, it is important to select a Real Estate Institute-affiliated member, as it is compulsory for them to be covered by professional indemnity insurance.

Good luck with your sale and also your next purchase.

Industry analysts and the renting public alike are acutely aware of the housing affordability crisis. 

Research by the Australian Housing and Urban Research Institute shows Australia is short 173,000 affordable dwellings for rent, with Sydney alone short 60,000 dwellings.

The research also shows that 71 per cent of all lower-income, private-rental households struggle to pay rent that is in itself considered unaffordable.

The Morrison government pledged $124.7 million in the May 2021 budget towards this aim, which is to be channelled in states and territories via the National Housing and Homelessness Pledge.

This was trumped by an Opposition election response of a $10 billion future fund to be spent on 30,000 new dwellings over five years — in an effort to resurrect the social and affordable housing crisis.

‘Build it and they will come’

The widely publicised build-to-rent (BTR) projects throughout Australia and New Zealand offer untapped potential for growing families in need of affordable accommodation and extra space.  

BTR, which involves the development of multi-unit residential buildings for long-term rentals, rather than sales to individual owners, was created to help address the housing shortages.

Ignite (a not-for-profit University of Melbourne alumni group) research indicates that young families account for 40 per cent of households, many of whom are living in barely affordable, cramped conditions within multi-level apartment towers.

The research also found that school and social commitments and shorter commute times are keeping these tenants in dwellings longer than the average professional tenant — presenting greater impetus for the relatively recent BTR phenomenon.

“From a developer’s perspective, the cost to acquire a tenant compared to the return on a tenant is significantly better,” says Ignite researcher Derek Huynh. 

“Young professionals might only want to stay for three years—if it’s a family, they want to remain there.

“And build to rent can hopefully create a seamless upsizing or downsizing experience when a family wants to add another child or when their child is old enough to move out,” Mr Huynh says.

Similar New Zealand scenario, albeit slower paced

An increase in potential investment opportunities for BTR developments in New Zealand is building, albeit, at a slower pace than other Commonwealth countries, a report from commercial real estate firm JLL says.

According to news site stuff.co.nz, the report suggests that COVID-era 2020 built a more compelling case for BTR as a viable part of the solution to the housing crisis. This looks at how and why it could help on a number of fronts.

The report adds that the sector has struggled to get off the ground in New Zealand — unlike in the UK, where it has taken off over the past 10 years, or even in Australia, where it is gaining popularity.

(Source: Urban Developer; stuff.co.nz)

Not everyone can afford to spend a small fortune when buying their first home, which is why apartments will continue to be popular. 

Factor in the often central location, low-maintenance lifestyle, other conveniences and resale potential, and their appeal is obvious. 

Big issues of shared, smaller places

But there are areas to consider before investing in an apartment.

In general, Archicentre has found its five biggest downsides to being excessive noise, poor insulation, bad ventilation, access problems and lack of privacy. 

Add the prospect of inadequate hot water systems and/or heating, low-quality flooring and fittings — and this should ring alarm bells.

Body corporate costs and regulations are another all-important consideration. 

Caveat emptor or ‘buyer beware’ is the best advice that any buyer or investor can heed. 

Does the price seem right?

If an apartment appears reasonably priced, ask yourself and the agent why? Better still, visit it at various times, and see if it is still what you want. 

If you intend to buy a new apartment, ensure the builder’s credentials and insurance coverage are more than adequate, and also that off-the-plan specifications and finishes meet expectations. 

It may even pay to insert a clause about having no obligation to make a final payment until the work is completed to appropriate standards. 

Whether you’re buying old or new, rushing in is risky business before conducting the relevant checks. Take the time to be thorough and you’ll be spending your money wisely.

Benefits of apartment living

Units and apartments have become increasingly attractive, as much for their affordability and lifestyle benefits as their potential for vendors to maximise sales results. 

Besides proximity to shops, transport and educational institutions, sound-proofing, 

insulation and fire ratings are other important considerations.

Amenity to strive for  

Additional features, such as communal gardens and access to health clubs, tennis courts and swimming pools, can be priceless when it comes time to resell. 

As with all properties, the unit and surrounding grounds should be viewed by an independent building inspector, providing an accurate estimate of future works, both for the unit and shared costs in the complex. 

Just as important is to inquire about the body corporate — with neighbours, as well as agents. 

Ongoing costs and services

These annual costs are often presented, but much can be discovered by double-checking the maintenance record of your apartment complex. 

Not only will this provide an insight into its level of activity, but it can also be compared with your inspection report to highlight whether the ongoing costs represent value for money and match your expectations of capital growth.

Simply put, depreciation is the act of a fixed asset losing value over time. It occurs in all acquired entities.

The nature of this ongoing prospect in terms of an investment property precludes depreciation solely for end-of-financial year prioritising.

Rather, a concerted financial planning approach and effort ensures that your investment and deprecation remain a cohesive unit.   

Fast facts

—Depreciation is not a tax-time issue – organise a depreciation schedule as soon as an investment property settles to gain immediate tax deductions.

—Use a depreciation schedule as a tool for calculating future costs and minimising them.

—Items valued below $300 can be written off immediately, while assets that have an opening value below $1,000 in the year of acquisition can be added to a low-value pool.

The art of anticipation 

Industry leaders, such as the Executive Chairman of Raine & Horne, Angus Raine, offer sound depreciation advice: “As soon as you settle on a property that you plan to use for investment purposes, seek out the advice of a depreciation specialist such as a quantity surveyor, who can use their knowledge of depreciation legislation to maximise deductions for partial-year periods as well.”

Mr Raine adds that the depreciation potential of a property is often a factor in an investor’s decision to acquire a rental property.

“A depreciation estimate obtained prior to purchase can help investors when budgeting for their new investment. This is because the deductions for wear and tear can assist with minimising the costs involved in owning an investment property,” Mr Raine says.

Act fast to capitalise on potential

Quantity surveying firm BMT Tax Depreciation suggests that investors take swift action.  According to BMT’s research, even if an investment property is owned for just 20 days, an investor could potentially claim around $3,834 in deductions in the first financial year alone.

The Chief Executive Officer of BMT, Bradley Beer, says deprecation specialists will utilise the latest methods of calculating the wear and tear on a property, regardless of how long it’s been owned and rented.

“A comprehensive depreciation schedule will incorporate methods such as immediate write-off and low-value pooling to maximise deductions for a shorter period of ownership,” says Mr Beer.

“By requesting a depreciation schedule as soon as a property settlement is finalised, investors can recoup some of the costs and provide an immediate boost to their cash flow,” he adds.

The sold sticker has been freshly plastered on the board outside and the celebratory bottle of champagne is empty.

It is only natural to feel the stress relief — but enjoy that breather because the process is only just beginning.

Many people dread the thought of moving house, but it can be a cathartic and rewarding experience if approached with a positive mindset. 

Time is of the essence

To have your best chance of avoiding delays with lenders, it is important to start the conveyancing process as soon as possible after exchanging the signed contracts.

And if you intend to move into another property, you should align your dates for settlement to avoid any untoward, last-minute surprises.

Tick off the boxes

The first and foremost administrative task is to arrange insurance cover for your new home.

Likewise, contact utility and internet companies for disconnection and arrange for it to be on at your next address.

Countless other tasks can be undertaken in the weeks to come, such as redirecting mail, notifying banks and updating your driver’s licence.

Fresh start

Your next move will depend on your individual circumstances – be it renting, downsizing or upsizing.

But the perceived upheaval can vary according to what you intend to take with you.

Ask for three quotes from reputable removalists and even investigate the do-it-yourself option if your load is lighter than most.

Most removalist companies have an online tool to help you calculate what space will be required in a truck. 

Thinking ahead

If you’re heading to another place, ensure you have a copy of its floorplan so you can start mapping out where your furniture and belongings fit.

If on the other hand, you’re unsure of your next destination, it is probably best to investigate storage options. They are often an ideal source for sturdy packing boxes, including port-a-robes to transport your wardrobes.  

Create a welcome folder

If you hadn’t already prepared one for the sale process, this compendium for the next owner should contain all the various appliance manuals and warranties, receipts of improvements should they still be under warranty (i.e. damp proofing) and a timeline of major works completed, including contact details of who carried it out. 

Begin packing 

Try to reduce what you use to the bare minimum.

For example, keep out only the crockery, cutlery and cooking utensils you would use each day, and wash them at the end of each day.

If possible, label boxes according to the rooms in which they will be unloaded (i.e. Sarah’s room, kitchen, bathroom). During sorting, be sure to have boxes to take to the op shop and others you can list for sale online at Gumtree, eBay or Facebook Marketplace. 

Transporting copious amounts of food makes no sense, so prepare by cutting your weekly grocery list and consuming existing pantry supplies.

If anything, all that should remain for the move is your pantry staples and arrange for online grocery delivery, including the first night’s meal, when you’re busy settling in at your new address.

Clean break

There’s also the small matter of cleaning the home, which can often overwhelm many at a late stage.

Emptying cupboards well in advance of moving day ensure they can be thoroughly cleaned and only need a quick wipe as you prepare to depart.

Renters and often departing homeowners are required to provide professional clean of the existing residence.

Always have a Plan B

It is next to impossible for everything to run smoothly, particularly when there are elements outside of your control, so ensure there is a backup plan in place.

This may include staying somewhere close to your new home or moving in with family for a short stay prior to your next move. Remember that a little short-term inconvenience is worthwhile for long-term gain.

Winter is upon us and for homeowners and renters, that often means one thing: staying warm.

With the nightly and early-morning temperatures set to plummet, particularly in southern Australia and New Zealand, The Real Estate Voice offers several energy-saving, eye-catching and heart-warming ways to stay snug and cosy this winter. 

On the surface

Feature fireplaces in marble, cast iron, even stainless steel always evoke an atmosphere of warmth and comfort.

Fireplaces needn’t lay dormant in the warm weather, either. Packing a standalone open fireplace with ice and Champagne is an interior feature and conversation starter when party season rolls around.

Winter living accessories are also practical, stylish and essential for keeping heating costs down and your householders toasty warm.

Plush products with natural fibres not only look great, but they also work best at maintaining heat-seeking qualities.

Choose woollen rugs and mohair throws in living rooms and winter-weight merino wool doonas and wool-blend doona covers in the bedrooms to keep you and your family warm on the inside this winter. 

Don’t forget thick woollen socks and winter-warming sleepwear. 

Insulated for even temperatures

Protecting your home from the winter chill starts with a foundational approach.

If your home is newly built or even if you’re renovating, installing adequate insulation that regulates temperatures to ensure warmer winters and cooler summers is your best climatic defence.

Is the house insulated? When renting or buying, this should always be one of the first questions put to potential landlords or vendors.

The yourhome.gov.au and yourhomenz.co.nz sites provide minimum insulation levels for walls and ceilings in all localities. You will also find a surfeit of new build and renovation information that is designed to weatherproof and maximise efficiency for your home.  

Keeping cold air out and the warmth in

Pay attention to draughts that emerge through doorways and windows.

Regardless of the season, freshly circulating air is always recommended, but so too is the ability to control the temperature on the inside.

Ensuring that windows are sealed and doors fully closed is essential for keeping your home naturally warm.   

Get a move on

It’s important to keep the blood flowing, endorphins boosted and winter blues at bay with regular exercise.

This needn’t be a strenuous daily workout. Rugging up against all conditions and enjoying a brisk stroll with your housemates or family at a nearby park will keep everybody warm, fit and healthy.   

Visit homeware stores, fireplace suppliers, local rug weavers and handicraft markets for these and other winter-warming ideas and inspiration for your home.

Record-low interest rates and surging property prices in Australia and New Zealand have fuelled buyers’ fear of missing out, otherwise known as FOMO, since the pandemic was declared in March 2020.

But with the cost of renting closing in on that of standard mortgage repayments and demand for housing stock continuing to outstrip supply, TINA (there is no alternative) is fast becoming an equally motivating factor.

CoreLogic says average house values have increased 10.7 per cent in the year to date.  

And with Big 4 bank forecasts tipping further house price increases of up to 20 per cent over the next two years, the lure of property ownership is proving too tempting to many.

Buyer profile changing

First-home buyers have been integral to the FOMO phenomenon, with ABS statistics for the December quarter showing this demographic at their highest rate of owner-occupier loans since June 2009 (about a third of all owner-occupier loans).   

But CoreLogic says the influence of first-home buyers has decreased over the three months to April, coinciding with the end of the HomeBuilder government grant in March.

Consequently, the buyer profile has shifted to existing owner-occupiers (downsizers, upsizers and those moving), who accounted for 52 per cent, first-time buyers (21 per cent) and investors (25.9 per cent), which is increasing but still well below the decade average of 35.3 per cent.

CoreLogic says the tree change of buyers chasing more affordable properties in regional areas is coupled with a desire for more living spaces and better internet connectivity as the working-from-home trend takes hold on a more permanent basis.  

Investment was particularly strong in New South Wales and Queensland.

Appetite for risk

The number of low-deposit mortgages had been on the rise in 2020, adding to the volatile mix.

The proportion of mortgages taken with a loan-to-value ratio (LVR) higher than 80 per cent recorded its highest increase in 13 years in the December quarter.

But CoreLogic says the portion of new loans with an LVR of greater than or equal to 90 per cent fell from 11.3 per cent to 10.4 per cent in the past quarter.

The Australian Prudential Regulation Authority (APRA) quantifies ‘risky’ loans as those having a debt-to-income ratio greater than six.

This enhances the ever-present danger of negative equity – when a property’s value falls below the amount owed – should the lending environment or employment prospects unexpectedly change.

Affordability hard to ignore

With interest rates already at historic lows, the Reserve Bank of Australia has consistently stated it does not expect interest rates to rise before 2024.

The Reserve Bank’s official cash rate remains at the historically low 0.1 per cent, which means many fixed-rate mortgages are available for substantially less than three per cent. Variable rates are available in the same range. 

Given the optimal conditions, it makes sense for property owners to factor in future rises by creating an emergency fund for at least three months of expenses or paying more than the minimum repayment, to reduce the length of your loan in the long term.

The end of a financial year prompts swift action for tax-related matters. 

This includes relevant information for property owners, renters and potential buyers in their bid to streamline real estate and financial processes.

With this in mind, our explanatory guide about tax terms and real estate phrases are designed to clarify, refresh knowledge, simplify selling-and-purchase terminology and assist with tax duties and expectations. 

Glossary of market and monetary phrases

Appraisal: essentially a property evaluation, an appraisal is a free service carried out by a real estate professional to provide an understanding of the possible selling price.

Body corporate: the name given to a governing party representing a group of owners in strata (apartment building) properties.

Building Code of Australia and New Zealand: the minimum-standard requirements for a building’s health and safety, as stipulated by the code boards. 

Buyers’ market: this term represents an oversupply of properties and other conditions that favour buyers.

Capital gains: these are a rise in value of a capital asset, such as property, which provides a higher value than the purchase price. Capital gains can only be determined when the property is sold. 

Conditions of sale: these are conditions added by the buyer and seller to a sale contract that must be adhered to before the contract is finalised.

Cooling-off period: a period following the sale of a property in which the buyer can back out of the sale, based on certain conditions.

EOI: this stands for expressions of interest and is used to determine interest, and the potential selling price, for a property. 

Guarantor: a person who agrees to take over loan payments and other contractual obligations if the borrower fails to do so.

Loan-to-value ratio: this is the ratio of a loan to the value of a property. 

Negative gearing: This essentially refers to borrowing money to invest in a property where the income from that property is less than the expenses.

Reserve price: the lowest possible sale price a seller will accept at auction.

Sellers’ market: market conditions where an undersupply of property pushes up prices, favouring the seller.

Settlement: the completion of a property purchase where the buyer pays the full amount in exchange for legal ownership of the property.  

Stamp duty: a state tax paid by the buyer on contracts, including property. 

Under contract: the seller and buyer have agreed on a price for a property and signed a contract. But the contract is still subject to conditions such as the cooling-off period (see above). 

Valuation: conducted by an accredited valuer, a valuation is used for legal or banking purposes to determine the value of a property. 

For information about these and other market and tax-related terms, consult your real estate agent, bank or financial planner.

With record construction figures and government stimulus propelling the growth of new-build industries, there’s increasing interest in building on property dreams from the ground up.

Regional appeal, design customisation and cementing lifestyle aspirations are the major attractions. But it’s paramount to be aware of the pros and cons of buying land and what to expect with new-house construction before you commit.

Everything in its place

The dwelling’s placement on the block is vital. Ideally, the allotment with a north-facing backyard should allow clear access to the north (called solar access).

It should not be overshadowed in winter by buildings, large trees, fences or other obstructions to the north, so light and warmth can be maximised.

Generally speaking, solar access is best from:

• Rectangular blocks with long boundaries running north-south or east-west, especially so if less than 500 square metres;
• Blocks that run north-south that are wider than 13 metres;
• Blocks that run east-west that are wider than 14 metres, except where a street or parkland is to the north (in which case the block can be narrower); and,
• Blocks that allow your home to be placed at a distance of six metres or more from a single-storey obstruction to the north, or 11 metres or more from a double-storey obstruction.

Big-picture outlook

It’s natural that, after visits to display home villages, people can easily picture a preconceived house size in their mind.

But the realities of building can kick in.

Setbacks, building envelopes and height restrictions can all reduce the amount of land on which you can place your home.

In other words, don’t assume that a 14-metre-wide block can accommodate a 14-metre-wide house. 

And don’t forget to factor in where your driveway will be in relation to the home (the crossover is the access point from the street to your block).   

Time factor

The length of time from buying the block of land to starting building will differ with every sale, but it can take on average at least 12 months.

Part of the reason is the certificate of title, which is necessary before any construction work can begin. Another is the infrastructure.  

Essential infrastructure

When it comes to creating infrastructure in new estates, it’s said that development resembles an iceberg.

It’s estimated that only one-third of the work is visible above the ground, with the majority of works (electricity cables, sewerage, water and gas pipes and internet) hidden away from view. 

Thankfully, the services for house blocks in most estates are ready to be connected. But never assume – always ask.

Titled land advantage

Once your block is titled, your builder conducts a soil test and updates any site costs.

Approvals, such as building permits and unconditional finance, must be obtained, and settlement on the block finalised before the site is prepared for construction.

The upside of waiting for a block to be titled is greater savings potential.

Construction is generally broken down into several stages and you will usually be invoiced a percentage of your overall contract value at the completion of each stage: slab; frame; lockup; fixing and completion.

The complete package

Of course, buyers can choose to avoid all the stress and wait time if they’re prepared to pursue the option of a house-and-land package. In this way, there are fewer surprises as builders have already accounted for all costs.

Real estate agents, property developers and investors can advise further on the challenges and benefits of buying land in your region.