Ray White Bunbury Blog

Top Performing Municipal Areas

Some local council areas around Australia have ignored the recorded slowdown in house sales over recent months by reporting an active buyers’ market.

A recent report prepared by rpdata.com senior research analyst Cameron Kusher shows premium property markets have experienced a lift in sales compared to last year’s results while at the same time, regional markets, generally some distance from the coastline, also gathered pace.

The largest percentage improvements in sales volumes have been in the regional markets of Australia. According to the report, 25 of the top 35 council regions were located outside of the capital cities.

Another trend noted was that the vast majority of capital city regions that recorded increases in house sales also recorded higher-than-average median prices.

Kusher says that in all but one instance, the capital city council areas that recorded the strongest change in sales volumes were within premium markets where median prices were well above the respective metropolitan median price.

For house sales, South Australia led the regional results where the greatest increase in the quarterly volume of sales was recorded in the Northern and Robe council regions.

Victoria’s Central Highlands Council also performed well and increased by 50 per cent.

For units, a number of trends emerged across the council areas. Based on the results, the differential between the council areas outside of capital cities to those within was much closer across the unit market than it was for houses.

Read the full report.

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Tip Four- Always take the Maximum Bond- never compromise and ensure you always take a maximum bond. Some landlords chose not to take a full bond, and some even choose not to take a bond at all! It is important to know that choosing not to take a full bond can result in a landlord insurance claim being compromised or possibly denied! Therefore ensuring the correct bond is charged and updated with rent increases is a must!

Inner-city Bargains Still Exist

You may not have to move to the outskirts of the city to find a bargain. There are still some great opportunities within the city limits.

Recently rpdata.com did a comparison between the most expensive and the cheapest areas within different radii of the CBD and the results showed that while the affordable choices may not come with all the bells and whistles of the pricey suburbs, the price tag and land sizes were often surprising.

Understandably, the cheapies were more likely to be more than 30 years old, have a basic layout and were often in ‘original’ condition. But, most of them did come on generous sized blocks – a real bonus.

Also, surprisingly enough, rpdata.com found that in some instances, the more expensive median house prices were further from the CBD.

Okay, so what can I get for my money?

In Sydney, within 10km of the CBD, the most expensive suburb is Bellevue Hill with a median house price of $3,650,000 and the most affordable area is Sydenham sitting at $558,500. The Melbourne prices were a bit lower with Toorak taking top honours at $2,660,000 and the cheapest, Braybrook at $390,000.

Moving further out, Sydney’s most expensive areas mainly sat in the millions, only dropping below a million when you were 40km+ from the CBD. Whereas in Melbourne, you only had to travel 20km+ from the CBD to find a pricey area with a median house under a million.

Adelaide offered buyers the best chance with 21 per cent of suburbs within 10km of the city having a median price below $406,500. This was followed by Perth with 15.3 per cent and Brisbane with 13.4 per cent of suburbs sitting below their city medians of $495,00 and $470,000, respectively.

Looking at suburbs between 10-20km from the CBD, in all cities more than a quarter of the suburbs had a median house price below the city median.

Then, generally, the further away from the city, the houses tended to be more affordable.

Did your suburb measure up, have a look and see?

Mining Areas Ripe for Investment

While there still might be an element of risk associated with investing in mining and resource-driven towns, the sensible resolution on the Resources Super Profits Tax (RSPT) by the Federal Government makes this type of investing a consideration once more.

Rpdata.com research analyst Cameron Kusher recently investigated if now is the time to invest in mining or resource-driven towns and found that although there is still an element of risk, the returns could be significant.

However, he says, timing and market knowledge is everything.

“For property buyers, the timing may now be right based on the recent announcement that the Federal Government and the resources sector representatives have come to an amicable solution to the RSPT.”

This, he says, coupled with commodity prices taking off again after a substantial slump during late 2008 and 2009, means it is clear that demand for commodities is ramping up.

He believes that given this factor, there is likely to be a higher level of demand for Australian mines to pull resources out of the ground at a more rapid pace.

“That means more workers and more demand for housing in what are generally chronically undersupplied markets.”

Kusher believes that the Roebourne LGA, which is located in the north-west region of WA and includes the townships of Karratha and Dampier, is likely to present great opportunities for buyers, especially with its major attributes of being in the heart of a lucrative iron ore mining region and home to a major shipping port.

Another standout performer, he says, is likely to be the coal-rich Isaac LGA in Queensland’s Bowen Basin, which includes the towns of Moranbah, Dysart and Clermont.

Moving and Utility Providers

Whatever you do, don’t leave arranging the connection and disconnection of your gas and electricity to the last minute. To be super organised, a few weeks before your move, contact relevant providers in your new area so you can establish which company will suit your needs – utility providers often require at least a few days notice to ensure you are connected on the day that you move in.

There have been some nasty experiences of families that have moved into homes in the middle of winter and discovered they have forgotten to arrange utilities connection.

When you call prospective suppliers, you need to have your new address and telephone number and proof of ID readily available. The company is likely to run a credit check on you as well.

Ask the provider how long it takes to connect the services you require. Also ask about establishing payments and determine how regularly you will be billed.

Generally, all the conditions of the gas and/or electricity plan that you agree to will be read out and the commencement of service date confirmed. A written contract will be posted to you.

If your property is on bottled gas, you need to find out who the local provider is and check how much gas is left in each bottle – the prior owners might have left them empty!

Also, you need to arrange to disconnect the gas and/or electricity at your current address. Remember, you probably need some power for vacuum cleaners and other cleaning essentials on your ‘move’ day.

New Home Standards for Increased Livability

The Federal Government has launched the Universal Housing Design standards in a bid to make new homes more livable.

Under a new voluntary agreement with industry, the Federal Government aims to have new homes meet specific targets by 2020 to meet the new rating system.

This bold move to improve living standards for young families, the aged and people with disabilities will see new homes have ground-floor bathrooms, wider doorways and entry level access.

It is expected that around 30,000 homes per year will meet the standard in three years. On average, around 140,000 homes are built every year.

According to a recent article in the Daily Telegraph, all homes would need to be built around six principles, including meeting the standards:

• A safe and continuous path of travel from the street entrance and/or parking area to a dwelling entrance that is level;
• At least one level entrance into the dwelling;
• Internal doors and corridors that facilitate comfortable and unimpeded movement between spaces;
• A toilet on the ground (or entry) level that provides easy access;
• A bathroom that contains a hobless (step-free) shower recess, and;
• Reinforced walls around the toilet, shower and bath to support the safe installation of grab rails.

Read the full article: New Home Revolution

What do you think of this new initiative? Will these additions to new builds help or hinder people’s design choices? Also, these inclusions could hike up the costs of new builds – will this be reflected in the sale price when sold alongside homes that haven’t included these principles?

Building Permits and Warranties

Some people start renovation and extension work without getting the necessary permits, so if you are looking to buy, it is imperative that you check this out before purchasing a property.

Most structural work that has been carried out on a property needs a building permit. And, in some cases, building warranty insurance may apply.

It becomes a matter of ‘buyers beware’ and your first stop should be to your local council to find information about permits.

From an overall perspective, though, before any work is started a building permit is generally required. This probably will entail written approval from a registered surveyor to show that the planned work complies with the building regulations.

To protect the owners and future owners of the property, most renovations and the standard of workmanship and materials used are covered by warranties and guarantees.

These, however, can vary depending on when and where the renovation was done. As the value of work of the renovation has changed under some Acts, make sure you skill up on what the different requirements were at the time.

For example, a building contract entered into between May 1996 and June 2002 in Victoria requires building insurance for work over $5000 and the period of insurance was for six years and six months. However, contracts entered into on or after 1 July 2002 need insurance for work valued over $12,000 and the period of insurance differs depending on whether is it a structural or non-structural defect. Also, a registered builder must carry out renos costing over $5000 as they fall under the ‘major domestic building contract’.

If you buy a property that has a warranty, this will be passed on to you, allowing you to claim for any breach that may occur.

Details of permits, warranties and guarantees should be included in your contract of sale, but it is also worth checking them out before you get to this stage of the buying process.

Houses Prices – What Next?

In a recent article, House prices ‘unlikely to dive’, a major bank has dismissed analysts’ predictions of a plunge in house prices over the next 12 months.

Macquarie Bank has been reported as saying that instead of house prices plummeting, they will instead just soften.

The article published in The Australian says that according to Macquarie, “a combination of rapid population growth, strong labour market conditions and sustainable debt suggests the Australian housing market is built on solid foundations”.

The residential market prognosis was in the bank’s September quarter general economic outlook.

It stated that interest rates would soften the market over the next year but would not trigger a dramatic price correction. The major reason given why the outlook for house prices was not as dire as many analysts predicted was the supply and demand imbalance of housing stock.

However, this housing imbalance, according to most commentators, is being counteracted by the worsening affordability of housing, leading to a stabilising of price.

This sentiment has been echoed in another recent article, Australian first-home buyers face 4.5 year savings wait to buy property.

Published on news.com.au, the article stated first home buyers now need 10 per cent more for their deposit and it was now taking nearly another year for first home buyers to enter the market.

Where previously, first home buyers saved for 3.7 years, in the latest Bankwest research it has ballooned out to 4.5 years.

Apparently, Australian couples now need “to raise $85,800 deposit for a median-priced house, compared with $78,100 a year earlier”.

This is even worse in the more expensive metropolitan areas, where the median price of a home is about $468,000, according to RP Data.

5 Ways to a Stress-less Open for Inspection

Having your home opened for everyone to inspect can be just as stressing as having people look in your dirty linen basket.

Yes, people will judge. However, you have to remember that it isn’t you they are judging – it is your home.

1)    Plan well in advance. Make sure that you have timed your open for inspection for a time that suits you. If your children have sports on Saturdays, it is your only sleep in, or you have babies’ sleep patterns you have to work around, make sure you discuss these with your real estate agent and agree on a good time for all.

2)    Once a time has been agreed on, allow plenty of time to clean, tidy and get your home in tip-top condition. Well-presented houses sell well and the less time your home is on the market, the fewer opens you will have to prepare for.

3)    Before your first open for inspection, prepare the house inside and out and put plans in place for other members of the household to keep the pristine throughout the process. It is a lot easier to do it once and then perform ongoing maintenance, than having to start from scratch for every inspection. So, de-clutter, de-clutter and de-clutter and don’t let the mess return.

4)    Have a cupboard set aside to store your ‘open for inspection’ paraphernalia such as towels, soaps, ornaments and other special items you use to spruce up your property. Make sure you put them away straight after the inspection so they can be readily located next time.

5)    If you have children, send them out a couple of hours before the open time – this ensures you have the dedicated space to finish any last minute cleaning and the house can look really ‘schmick’. Make sure the pets are out of the way as well – it’s amazing how quickly our four-legged friends can destroy any recently pristine arrangements, let alone any new toilet stops!

Understanding Real Estate Statistics

Understanding and analysing property stats can be one of the most daunting aspects of monitoring the property market if you are intending to buy or sell.

Let’s face it  – statistics are rarely fun, but on the other hand they are an important part of your property research.

Before you can completely comprehend the stats that are bandied about in media, on the radio and online, it is important to understand what some of the most common terms used stand for and know the difference between a mean house price and a median sale price.

The most commonly used measurement is ‘median’ because it gives the most accurate reflection of how properties are performing in suburbs, regionally and nationally.

So, what is the difference between the means and medians?

Mean (average)
The mean is what most people think of when you tell them to work out the average. If you have five houses that sold, you would add all the values together then divide the sum by 5. Using this measure to determine prices can be a bit deceiving, as the mean is often skewed if a house in the area sold for a high or low price compared with the others.

For example: if you had five properties that sold for $375,000, $395,000, $400,000, $425,000 and $1.5m, the mean would be $619,000.

Median sale price
The median sale price is the middle price that properties sold for. Instead of adding all the values of the houses together, you order them then pick the one in the middle of the list. So, if our five house sold for $375,000, $395,000, $400,000, $425,000 and $1.5m, the median sale price is $400,000.

As you can see from the above examples, by using a mean instead of the median, you can get a very different view of how your property market is performing. Make sure you understand what measurement is being used when you are researching housing data and statistics.