Duty Of All To Abolish Taxes

May 9, 2012 Leave a comment

In the light of the federal budget, which has just been handed down, First National Real Estate says the government should have delivered on the GST promise of abolishing stamp duty and that home buyers should also do their bit to support the Australian property market. 

Australia’s soft property market will continue to tread water unless major changes are made.  We need more new housing stock to come onto the market, indirect costs to be reduced, inefficient taxes such as stamp duty to be abolished – preferably all three. 

And  while HECS-like schemes are commendable for assisting home buyers to pay their stamp duty obligations, it should be a matter of reducing, or better still, getting rid of stamp duty altogether and that falls on everyone’s shoulders. 

 A struggling property market affects all Australians, as it is a key driver of the nation’s economy and represents a burden for all to share.  This is why home buyers should do their bit and continue to put pressure on governments to live up to their GST promises. 

Property taxes are reducing home buyers’ ability to purchase new homes, whether they are first home buyers, upgraders, downsizers or investors. 

Last year, stamp duty accounted for 37% of total property related taxes in Australia and the reliance of Governments on property taxes to boost their coffers should have lessened over time with the introduction of the GST, but the opposite trend seems to be occurring. 

Nationally, stamp duty has risen, due mainly to increases in NSW and Victoria according to industry figures.  And yet, property taxes were cut in WA and NT, and government revenues actually increased. 

What seems to be happening is that stamp duty is putting new homes beyond the reach of many, so fewer homes are selling overall, reducing revenue raised through these taxes to governments. 

Making home ownership too taxing is a short-sighted and quick grab for cash by governments and should be ‘stamped out’ as soon as possible so that everyone can achieve their home ownership goals.

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New Homes To Drive Property Market

March 29, 2012 2 Comments

The New Homes Building sector may provide a solution to Australia’s sluggish start to the property market for 2012, especially if associated regulatory and government taxes were reduced.

As a key barometer for the health of the domestic economy, and often a driver for first home buyer activity, the new home building sector needs more than just low interest rates to sustain improvements in conditions. Something needs to be done at the policy level.

An industry report released in February this year showed a decline of 7.3 per cent in seasonally adjusted new home sales in January, with Victoria experiencing the sharpest decline of 19.6 per cent.

The report also showed a decline in detached house sales for NSW and SA as well, which further weakened results, but strengthened the case for government action.

A real opportunity exists for governments to set the new home building agenda and look at policy reform that will reduce new home building taxes.

Up until now, both state and federal governments have relied on Victoria to prop up this segment of the Australian market, but the results show they can no longer do that. It is up to governments to show leadership and do something.

Policy reform, especially reducing taxes and costs for home building would have a multiplier effect. It would attract people in a financial position to build a new home, and have the knock on effect of increasing economic activity through jobs and sales activity.

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Men are from the garage, Women the kitchen…

March 5, 2012 Leave a comment

Women believe they put more importance on the kitchen when hunting for a home compared to men, First National Real Estate’s survey of women and property shows.

As well, women feel the bathroom and the size and number of bedrooms are a higher priority for them than men when buying a home. Women are also more likely to rate proximity to friends and family as extremely or very important. But expect men to be checking whether a home has a garage or a workshop – more men than women say these would be a priority when buying a home:

The survey, of 1,207 Australians (603 male and 604 female), looked at key factors influencing home purchase decisions as well as differences between men and women. Respondents were asked to rate the importance of a range of features that would influence their selection of a home. Overall:

  • 73 per cent said having a garage would be extremely or very important;
  • 71 per cent said the quality of the kitchen; the home having water saving systems or equipment, such as a grey water recycling system or rain water tank, was considered extremely or very important by 67 per cent of respondents;
  • 65 per cent said the quality of the bathroom; and
  • 56 per cent said a low maintenance garden or courtyard.
  • At the bottom of the list were: the home having good potential to improve or renovate (38 per cent), proximity to friends and family (36 per cent) and the home having a security alarm system (31 per cent).

But when couples were asked what things they believe they would prioritise more than their partner, clear gender differences emerged.

  • Far more women (28 per cent) placed a greater emphasis on the kitchen than men (three per cent);
  • Women also said they would place a greater emphasis on the bathroom – 17 per cent compared to two per cent of men);
  • 10 per cent of men said the garage or the size of the garage would be a priority, compared to four per cent of women and the same number nominated a shed or a workshop, compared to only one per cent of women;
  • 43 per cent of women compared to only 28 per cent of men said proximity to friends and family is an extremely or very important factor and 46 per cent said proximity to where people in the household work was extremely or very important, compared to 36 per cent of men;
  • Women seem more environmentally aware than men – 72 per cent said water saving systems would be an important feature, compared to 63 per cent of men.

And despite becoming an important buying power in the property market, some women say they are still discriminated against. Thirty four per cent of female home owners said they had experienced gender discrimination from tradespeople around the home and 25 per cent said they had experienced it from real estate agents. Only 11 per cent said they had been discriminated against by their mortgage lender.

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First National Supports Rates Decision

February 9, 2012 1 Comment

First National Real Estate says RBA’s decision to keep interest rates on hold is the right one because the market needs stability to counter ongoing consumer nervousness and tension.

The network’s members have reported drops in listing volumes for the second month in a row, which, in part, reflects home owners waiting for selling conditions to improve before they put their properties on the market but also reflects seasonal factors.

While the market remains slow in much of Australia, decreases in housing availability will begin to place upward pressure on prices as it increases competition, ultimately reducing the number of days it takes to sell a home.

Home buying opportunities, even with the rates remaining steady, were still considered plentiful as interest rates are still relatively low and home prices are at their most affordable for quite a number of years – which all bodes well for a property market looking for signs of stability and recovery.

Any rate decreases could have further added to consumer nervousness, which is still suffering from uncertainty around global economies and impacts of rising living costs, especially with the advent of the carbon tax.

At the same time, an increase now could result in reduced affordability, something first home buyers in particular can ill-afford at a time when some of the government assistance schemes are being cut back or dropped altogether.

Home buyers are encouraged to negotiate better rates with mortgage lenders including the Big 4 banks who are all on record as saying they are willing to discuss rates with home buyers in order to retain their share of the market, giving buyers a real position of power.

A calm approach is exactly what is needed right now to allow the property market to catch its breath and stabilise activity, so it can prepare for the next wave of influencing factors. This falls right into the hands of home buyers who should be able to secure the best deals they have for many years.

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Burnie Property Outlook 2012

January 15, 2012 1 Comment

The Burnie property market will be bolstered by renewed interest in 2012, as home buyers stop marking time, after waiting through 2011 for prime buying conditions to arrive.

In the last six months, the market has been falling due to a lack of confidence in the economy and with state government policies, but this is expected to steady in 2012.

With current economic uncertainty, state budget cuts and rising unemployment dampening confidence, house sales and new housing construction will remain slow, with prices generally remaining flat.

It is expected that extended selling periods will be seen and that values will remain under pressure until the region’s economic prospects improve.

The key challenges facing the region’s property market in 2012 will be ongoing low consumer confidence due to State Government budget cuts to health, education and police.  Stamp duty concessions for first homebuyers ceased in the middle of 2011 and this will continue to impact on first homebuyers entering the market, as they will need to save a larger deposit.

The government also announced in the budget, that spikes in property land taxes will be smoothed out with a reduction in the valuation cycle from 6 years to 3 years.  Cost of living increases, such as rising water/sewerage charges and electricity prices, will continue to negate any gains made from high affordability levels.

Market Conditions

Buyer confidence will improve in 2012 on the back of decreasing sentiment in the last half of 2011.  Confidence has been at the mercy of local market conditions and into 2012, interest rates will be more of a key influencing factor.

Residential Market

Property Prices

Property prices in Burnie are expected to remain relatively flat across all sectors although there is potential for some upward movement of below 1 per cent, depending on what happens with interest rates.

A large choice of available properties for purchase in the local Burnie area will continue to ease pressure on prices.

Land prices may be sensitive to any decline in building approvals and an oversupply of land in some areas.

Rental Market

2012 could see an easing in rental vacancies, of up to 1 per cent, and moderating rental growth.

Rental markets in areas where job losses are being experienced may experience further easing of rental prices and some price drops in weekly rents will be due to people leaving areas in search of employment. This could lead to an oversupply of rental properties.

So, weekly rental prices will remain relatively flat in those regions, with the potential of some decreases of up to 1 per cent. 

Growth

Any increases in investor activity are expected to be up to 5 per cent in the main, as economic uncertainty continues to play a role in investment behaviour and purchase decisions.  Any potential increases will only be if investors are able to purchase positively geared properties.

The upgrader segment is expected to produce the strongest growth in 2012, as buyers seize the opportunity to capitalise on greater affordability and the possibility of lower interest rates, which are expected to further decrease by between 0.5 and 0.75 per cent.

While interest rate cuts may increase activity slightly in Burnie, the real benefit will be any relief it provides to home owners who are facing large increases in their day-to-day living expenses.

Changing Market Conditions

The introduction of the carbon tax is expected to further reduce confidence in the state economy and the government that runs it.

Commercial Property Market

Tasmania is currently outperforming all other major office markets and it will continue to set the pace until at least the first half of 2012.

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Top End Challenging

December 21, 2011 Leave a comment

Buyers are cautious & certainly price-sensitive

Times are good for buyers at the top end.

This is where prices have fallen further and faster than the wider market. However, owners with high price expectations are reducing their expectations significantly in order to make a sale and move on.

Instead of traditional high exposure marketing campaigns, a trend towards properties being listed quietly has recently emerged in capital city markets.

Owners fearing that a ‘no sale’ campaign might injure their chances of achieving the dream price have been reluctant to promote widely. However, despite weak auction clearance rates, properties in the upper ranges are still selling strongly post-auction, their marketing ultimately having generated the necessary enquiry.

While buyers are cautious and certainly price-sensitive, it’s tough selling a secret and statistics show that properties marketed by auction continue to achieve a sale in fewer days on the market.

With interest rates falling and the outlook positive, activity levels are anticipated to improve in 2012, although the very high prices of the past are unlikely to return quickly.

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Confidence At Six Month High

December 7, 2011 Leave a comment

Merry Christmas & have a safe holiday

As the property market moves toward its summer hiatus, First National would like to wish you a happy and safe holiday as well as a Merry Christmas.

With the housing market correction having slowed in September and interest rates fallen, Australian confidence has risen to a six-month high.

Capital city dwelling values have fallen just 0.2%, the smallest decline since February, and economists are tipping rates could fall further yet.

So what’s next for 2012?

We’re working on our 2012 Property Market Outlook right now, so ask us for a copy in January and we’ll give you the views of over 450 agents Australia-wide.

Swim between the flags!

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Renting Versus Buying – The Housing Dilemma

December 6, 2011 Leave a comment

Is now the right time to rent or buy?
Is now the right time to rent or buy?

Current market conditions coupled with increasing housing affordability, has many renters questioning if now is the time to stretch their budgets and commit to buying their own home.

But serious consideration needs to be given to the person’s individual and financial situation to ensure they make the right decision.

The advantages of each housing option should be weighed against the drawbacks to find the one that best suits specific needs and individual situations.

Renting offers great flexibility with the option to relocate from home to home and area to area, as the need arises, is often a cheaper alternative to buying, with monthly rental payments usually less than a mortgage repayment for a comparable property and without the other incidental costs which can be incurred as a home owner.

One of the greatest financial and stress-free advantages of renting is that property maintenance costs, repairs, rates and insurance bills are the responsibility of the owner, and not the renter.

Despite these many advantages of renting a property, there are some disadvantages which will make buying preferable, particularly in light of escalating monthly rentals.  The most obvious one being the difficulty renters face placing their own personal stamp on a rental property.

There is also the fact landlords can inspect their property whenever they wish, with sufficient notice, potentially disturbing the renter’s privacy.

But the biggest disadvantage of renting is that the property can never be paid off by the tenant, making the money lost for good, without any chance of recovering it in a sale of the property.

This is where First National can really help.  We offer advice and assistance based on the necessary knowledge, experience and skills to understand the market, its trends and its weaknesses and opportunities to ensure home buyers and renters make the most of their finances over the long term by considering the impact on personal net wealth and cash flow over a lifetime.

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Lend A Hand For Renters

November 28, 2011 Leave a comment

Is NRAS is losing its edge as affordability improves?

While the network supports NRAS in principle, it is no longer effectively impacting on rising rents, leaving those most in need of assistance flailing in their efforts to make ends meet.

First National is calling on the government to look at changing NRAS so it has more relevance and achieves what it set out to do, or consider other forms of assistance such as bringing back some of the grants and other incentives that were obviously phased out too soon.

First National says while it is good news for the property market to get first home buyer activity increasing as a result of the market conditions, it is not good when it is done at the expense of those renters who can least afford it.

Struggling renters need access to assistance schemes that meet their circumstances and offer real assistance, which NRAS initially did, but has since failed to recognise the growing demand of assistance required, making it obsolete.

We don’t see property market conditions altering too dramatically in the near future, and certainly not to the extent that they will improve the situation soon enough.

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Agents Should Rate In Energy Scheme

October 20, 2011 Leave a comment

First National Real Estate believes real estate agents have a role to play in any national mandatory disclosure energy efficient rating scheme, so long as it is the right role.

The proper policy and regulations need to be in place, and the appropriate people prescribed the role they are best suited to play.

A national and consistent approach is crucial to any future success of a scheme of this nature.  Current state-based schemes already produce inconsistent ratings and results due to software flaws or subjective interpretation of results often compounded by a lack of correlation between actual energy performance of houses and their star ratings.

The real solution to the mandatory disclosure issue lays with government and industry working together.

Government needs to get the scheme right and put it in place with appropriate support strategies, both in terms of financial resources and implementation, which means getting the regulations and policies passed, educating the general public on the benefits of energy efficiency ratings and funding ongoing research and development.

It then falls to real estate agents to promote the ratings through the marketing of the properties they have on their books to buyers and lessors.

The real question is how assessors are selected and trained and accredited.  It is important that they are independent of the real estate profession so no potential conflict of interest is perceived by consumers.

The First National Real Estate network is committed to environmentally efficient principles and prides itself on its green initiatives – it fully supports a national mandatory disclosure of energy efficient ratings scheme, as long as all players act in the interest of the environment.

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