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August 3, 2022 by ash 0 Comments

Finance expert Mark Bouris’ has a few tips for keeping your money safe as inflation soars

With the cost of living, interest rates and inflation on the up and up, financial expert Mark Bouris has revealed his “red line” strategy to save cash.

Inflation will very likely hit 7 per cent by the end of 2022, which means there’s more than a fair chance there will be further interest rate hikes passed on to you the borrower before the end of the year, as the RBA attempts to rein spending in order to keep inflation in check.

This is not good news, but there’s no way the Reserve Bank could sit back and do nothing.

We’ve all benefited from cash rate lows of 0.1 per cent. But with it now at 1.35 per cent, a jump that has happened in just three months, you can bet that there’s more to come.

As that rate is passed on to anyone who’s borrowed money and doesn’t have a fixed rate, what can you do to safeguard your investments and where should you place your cash?

1. Think long-term, not short-term

If you have a thoughtful, long-term investment strategy, there’s no need to “chop and change” it just because interest rates are going up.

The worst mistake you can make as an investor is selling when the market has bottomed out or make rash decisions that could result in you missing out on potential returns. A lot of Australians who took the opportunity to withdraw money from their super funds when Covid first hit, missed out on one of the best years for super returns.

If you’re looking to invest for the next 10 to 20 years, it’s best to ride out the interest rate hikes that are coming our way.

That said, if you have a shorter-term “investment horizon”, maybe close to retiring, it may make sense to be more cautious and reduce your exposure to “riskier” assets such as shares.

Property

Although property is more vulnerable to rising interest rates, some of these investments could benefit.

Rising inflation is good news for property investors as it could lead to higher rents, which in turn could generate large enough returns to offset the negative effect of higher interest rates. Tight leasing markets and the prospect of higher yields and long-term capital gains should sustain interest in investment properties, despite rising interest rates.

With vacancy rates at an all-time low, now could be a good time to offset interest rate rises by buying more investment properties that will yield great cash flow.

As borders have opened up, we’ve seen an increase and influx of expatriates returning home. Add to this a drop in construction approvals and the government ramping up migration to assist the economy post-Covid – rents will continue increasing significantly in many locations over the next few years, helping to reduce the impact of the rate rises.

If you take out a loan to purchase a rental property, you can claim the interest charged on that loan, or a portion of the interest, as a deduction. However, the property must be rented, or genuinely available for rent, in the income year for which you claim a deduction.

It pays to speak to a professional mortgage broker who can help make an assessment of your options with regards to repayments and future lending.

All the things I’ve mentioned above are food for thought at one end of your balance sheet, but don’t forget what’s going out at the other end.

My mum used to say, “Take care of your pennies and the pounds will take care of themselves”. Like most motherhood statements, this one is true and makes for good practice right now.

I’m making a list of those ongoing subscriptions I’ve picked up over the last few years and unnecessary money I’m spending in the cloud. It’s a leaner time now and I’m drawing a red line through those that I don’t need or can do without. I suggest you do the same. Make it a habit, not just something to do when times get tough.

There’s a famous Rudyard Kipling poem called If that begins with the words, “If you can keep your head when all about you are losing theirs …” Right now, it’s time to heed those words. Don’t lose your head, keep it sane, simple, straightforward and you’ll come out the other side of this.

July 28, 2022 by ash 0 Comments

Pandemic ‘tree changers’ expected to move back to cities

Aussies’ housing choices changed during the pandemic and prices in regional areas surged, but an expert expects some tree changers will move back to the city.

The pandemic has no doubt changed the housing market.

One shift in particular has been the increased demand for homes in regional areas and as a result higher prices, as more Australians – inspired by lockdowns and working from home – make a tree change.

However, it is a trend experts do not necessarily expect to last – with some tree changers expected to realise their move may not be best for them long term.

In April, house and unit prices in capital cities grew 13.63 per cent year-on-year, while prices in regional areas grew 23.01 per cent, according to REA Group.

Dr Luci Ellis, assistant governor of economics at the Reserve Bank of Australia, said people’s housing choices had changed and they desired more space, but not all shifts seen in the housing market over the last two years would last.

“The desire for more space further from the office might wane over time as the memories of lockdown start to fade,” she explained in a speech at the Urban Development Institute of Australia national congress in Sydney last week.

“Not everyone who sought a ‘tree change’ in the regions will find that to be the right choice in the long term.”

Dr Ellis also explained that while migrants from overseas were not arriving in Sydney and Melbourne, Australians also tended not to move to cities in lockdown.

“So this wasn’t so much about city people wanting tree changes, but rather the interruption of the longstanding trend of others moving to the big smoke,” she said.

But regardless of why populations across the country changed, Dr Ellis said it was “undeniable” that in many regional housing markets, house prices and rent had increased considerably.

“This is impinging on the budgets of existing residents,” she said. “It is important to be mindful of that.”

In the first year of the pandemic alone (2020), 43,000 Australians moved to regional areas from capital cities – the largest inflow of residents to the regions since the Australian Bureau of Statistics started recording internal migration in 2001.

Looking at property data from REA Group, in the last year three regional areas have seen more than an 80 per cent increase in median prices.

Dwellings (both houses and units) in Cleve, South Australia, had a median price of $199,000 in April – an 86 per cent increase year-on-year.

In Boolaroo, NSW, the median price was $829,000 – an 83 per cent increase – and Bawley Point, NSW, saw an 81 per cent increase. The median price of a dwelling there was $1,555,000.

Top 10 regional suburbs with the biggest percentage change in median price in April 2022 (houses and units):

Cleve, SA: $199,000 (86 per cent increase YoY)

Boolaroo, NSW: $829,000 (83 per cent increase YoY)

Bawley Point, NSW: $1,555,000 (81 per cent increase YoY)

Murrays Beach, NSW: $1,175,000 (79 per cent increase YoY)

Jindabyne, NSW: $895,000 (79 per cent increase YoY)

Greta, NSW: $580,000 (77 per cent increase YoY)

Waverley, TAS: $360,000 (76 per cent increase YoY)

Huskisson, NSW: $1,500,000 (75 per cent increase YoY)

Mollymook, NSW: $1,180,000 (74 per cent increase YoY)

Crescent Head, NSW: $1,261,250 (73 per cent increase YoY)

July 20, 2022 by ash 0 Comments

Queensland ‘a rising star’ among dimming property markets: REIQ

Queensland’s market is not going in the same downward direction as its southern cousins anytime soon, according to the Real Estate Institute of Queensland (REIQ)

Data from the state’s real estate body showed the Sunshine State continued to record solid property price growth in the March 2022 quarter, a stark contrast with the sombre situation unfolding across the southern states.  

Median house prices and unit prices rose by 3.23 per cent and 2.17 per cent, respectively, during the first three months of the year, according to figures released by REIQ. 

The quarterly gains brought the average sale price for houses and units to stand at a quarterly median price of $640,000 and $470,000, respectively. 

On an annual basis, the average price for houses in Queensland is up by 15.27 per cent, while units rose by 11.11 per cent. Currently, median prices for houses stand at $592,500, while average unit prices are at $450,000. 

For houses, the strongest performer during the quarter was Noosa local government area (LGA), recording a whopping 15.38 per cent quarterly rise to an eye-watering median of $1.5 million. 

Noosa was followed by Logan with a 7.75 per cent quarterly increase to $598,000, followed by Toowoomba (up 6.67 per cent to $480,000), Gladstone (up 6.58 per cent to $405,000), and Ipswich (up 6.38 per cent to $500,000) to round out the top five major LGAs with the biggest jumps in average prices during the period. 

Moving on to the unit sector, the top five growth performers during the quarter were Gladstone (up 18.37 per cent to a median price of $290,000), Fraser Coast (up 16.18 per cent to $395,000), Logan (up 10.91 per cent to $305,000), Sunshine Coast (up 7.21 per cent to $646,000), and Moreton Bay (up 6.05 per cent to $403,000).

Commenting on the figures, REIQ chief executive Antonia Mercorella said that the state’s growth would not end in the latest quarter, stating that Queensland is currently positioned for further growth. 

“Over the past two years, the story of Queensland’s property market has been an extraordinarily positive one from a seller’s perspective, and the latest quarterly data tells us the Sunshine State market is still a rising star,” Ms Mercorella said.

She acknowledged that the strong quarterly gains did not come without obstacles, noting the several headwinds that the market faced from January to March. She also noted that the year also has more challenges up its sleeve for the region.

“The first quarter of 2022 has been fraught with disruptions such as COVID-19 outbreaks, the flooding disaster, the string of long weekends including the standstill of Easter, the looming federal election, and signs pointing to an interest rate rise, with some banks adjusting early in anticipation,” she said.

And while these disruptive events have caused some buyers to “hit pause” on their property hunting in Queensland, Ms Mercorella said that the state has sustained its healthy growth, adding: “I’m sure the median prices reached this quarter will take some of us by surprise.”

She also highlighted that it’s not just the state’s capital city that is delivering strong growth: “Our regional centre property markets and communities also continue to benefit from a growth uplift.” 

For buyers who are deterred by the rising prices in the region, Ms Mercorella offered some advice. 

“Of course, it can be easy to be disillusioned and discouraged as a buyer watching these prices reach new heights, but it’s important to remember these are median sales figures over a relatively short period of time and there are always more affordable options in areas with a million-dollar median – so it’s worth doing your research before assuming an area or suburb is out of your reach,” she said.

For those looking for a bargain, the quarterly median house price remained under half a million dollars in Ipswich ($500,000), as well as in regional centres such as Rockhampton ($330,000), Townsville ($390,000), Bundaberg ($400,000), Gladstone ($405,000), Mackay ($425,000), and Toowoomba ($480,000).

Where to next for Queensland’s property market? 

Ms Mercorella said that while “crystal ball” predictions of where Queensland’s property market is headed are generally prevalent, they are not definitive forecasts. 

“Our state still has all the fundamental ingredients for continued growth – a booming population, very low supply, strong and cashed-up buyer demand, relative affordability and low interest rates,” she said.

The REIQ executive also touched on the potential ripple effect of the Reserve Bank’s monetary policy decisions in the coming months. 

“So even as we face more interest rate rises, we expect this will take time to noticeably impact buyer’s pockets and sales prices, and in the meantime, the clear supply shortage will continue to tip the scales in favour of sellers, as buyers compete to secure a property,” Ms Mercorella said.

“We expect there will also be buyers who have been waiting in the wings, who may decide that now is the right time to swoop while they can still secure low fixed rates. Certainly, with how incredibly tight the rental market is, transitioning to ownership would be increasingly appealing to renters.”

Ms Mercorella also admitted that the strong gains would eventually level off, but reiterated that it will still take some time before the market cools. 

“We recognise that at some stage the rate of growth we see in Queensland will start to level and stabilise, simply because it would be difficult to sustain this level of accelerated growth – but for now, there’s still plenty of wind in the sails of Queensland’s property market,” she stated. 

July 13, 2022 by ash 0 Comments

Brisbane’s property market forecast for strong growth in 2022

Are you wondering what will happen to the Brisbane property market in 2022??

Well… Brisbane was the strongest property market in 2021 exhibiting astonishing growth, with many locations experiencing 30+%  house price growth.

And even though growth is slowing in other parts of Australia, Brisbane’s housing markets are likely to continue to perform strongly in 2022.

Sure it recently suffered from devastating floods, but history shows the resilience of the Brisbane property market which bounces back quickly.

Last year property values increased in almost every part of Brisbane – and that’s very unusual.

Moving forward, the various sectors of the Brisbane housing market will be segmented, which is a more “normal” property market.

Some locations will rise strongly, some will increase in value moderately, some locations will languish, and a few areas will experience falling property values, based on local supply and demand.

But Brisbane remains one of the nation’s hottest housing markets, with housing values rising a further 1.7% in April, taking the three-month growth rate to 5.7% which is the fastest quarterly growth rate in housing values amongst the capital cities.

The ongoing imbalance between low supply and strong demand is likely to keep upward pressure on housing prices and by the end of the year it’s likely “overall” home values will be 10+% higher than at the beginning of the year and unit values will be 7% higher.

Brisbane property values:

  • dropped -0.1% from last week
  • decreased -0.3% over the past 28 days
  • increased 24.7% over the last year

Currently, the Sunshine State capital is shining but it’s not too late to be early in this cycle – there is plenty of growth ahead – for the right properties as overall Brisbane is still very affordable compared to the other east coast capital cities.

What a turnaround from all the pessimistic forecasts all the banks made in the middle of 2020.

While there has been a shortage of good properties for sale, Brisbane showed positive signs for buyers in Queensland, with new listings increasing by 8.4% month on month in Brisbane and 4.6% MoM in regional Queensland.

Will the Brisbane property market crash in 2022?

Now I know some potential buyers are asking “How long can this last? Will the Brisbane property market crash in 2022?”

They must be listening to those perma bears who have been telling anyone who is prepared to listen that the property markets are going to crash, but they have said the same year after year and have been wrong in the past and I will be wrong again this time.

But now with rising inflation rising and interest rates rising ahead, many are concerned the current strong property cycle will end.

However strong buyer demand will put a floor under any house price fall.

At the same time, Queensland is currently the fastest-growing state in Australia driven by interstate migration.

In 2020-21, the population increased by 0.9%, well above the national average of 0.2%.

The volume of growth was just shy of 46,000 people.

Outstanding demand for lifestyle areas as well as extremely strong demand for detached houses in Brisbane, particularly in the inner and middle-ring suburbs has delivered strong price growth with Brisbane’s more expensive properties outperforming.

The resurgence of buyer interest in the Brisbane property market has meant that auction clearance rates have consistently been in the 70% range, which is unusual for Brisbane considering this city is not known for its auction culture like its southern cousins, but this is just another suggestion that there are more buyers than there are sellers and this always leads to higher property prices.

In Metropole’s Brisbane office we are noticing more investors are getting into the Brisbane market recognising that while there are no bargains to be found, in 12 months’ time the properties they purchased today will look like a bargain.

Will the Brisbane property market crash in 2022?

Now I know some potential buyers are asking “How long can this last? Will the Brisbane property market crash in 2022?”

They must be listening to those perma bears who have been telling anyone who is prepared to listen that the property markets are going to crash, but they have said the same year after year and have been wrong in the past and I will be wrong again this time.

But now with rising inflation rising and interest rates rising ahead, many are concerned the current strong property cycle will end.

However strong buyer demand will put a floor under any house price fall.

At the same time, Queensland is currently the fastest-growing state in Australia driven by interstate migration.

In 2020-21, the population increased by 0.9%, well above the national average of 0.2%.

The volume of growth was just shy of 46,000 people.

Outstanding demand for lifestyle areas as well as extremely strong demand for detached houses in Brisbane, particularly in the inner and middle-ring suburbs has delivered strong price growth with Brisbane’s more expensive properties outperforming.

The resurgence of buyer interest in the Brisbane property market has meant that auction clearance rates have consistently been in the 70% range, which is unusual for Brisbane considering this city is not known for its auction culture like its southern cousins, but this is just another suggestion that there are more buyers than there are sellers and this always leads to higher property prices.

In Metropole’s Brisbane office we are noticing more investors are getting into the Brisbane market recognising that while there are no bargains to be found, in 12 months’ time the properties they purchased today will look like a bargain.

April 22, 2022 by ash 0 Comments

Duplex: What is a duplex & are they a smart investment?

What does ‘duplex’ mean?

The meaning of a duplex essentially consists of two homes built on a single block where the two residences share a common wall but have separate, independent entranceways. For all practical purposes, each home in a duplex property is an independent entity though they may exist under a single roof. Both units could either share a common land title or have separate titles after subdivision.

Why duplexes?

Simply put, a duplex is a more affordable way to own a largely independent house, especially in an exclusive neighbourhood or a premium suburb. Given the runaway property prices in major urban areas across Australia, duplex homes like townhouses, make for an excellent investment for new home buyers as well as investors. A duplex delivers almost all the benefits of a detached house at about half the price, making it a sensible choice especially for home buyers on a budget, such as first home buyers who don’t have to compromise on the location. Property investors gain from a duplex’s two rental incomes instead of just one from a detached home. Even their initial investment for land and build costs will be lower for a duplex as it requires less land than two detached houses, and the land cost will be split between the two duplex homes.

Duplex homes also help homeowners unlock the hidden equity in their property by changing their single occupancy dwelling into a dual occupancy, with the second unit put up for sale or offered for rent most commonly found in Brisbane, Sydney and the Sunshine Coast. This is particularly ideal for retirees who would like to downsize without actually moving away from their familiar neighbourhood. A duplex is also a practical solution for the current trend of multi-generational families living under the same roof as it ensures privacy while providing the assurance and comfort of having one’s loved ones in close proximity, whilst also looking surreal, much alike a display home.

Types of duplex homes

Duplex designs are quite versatile, and depending on the size and dimensions of the block, can be side by side, top and bottom, or front and back. Duplexes are often double-storeyed but even three-storeyed designs can receive approval.

When designing a duplex home, it’s important to consider factors such as privacy, configuration, layout, natural light and aesthetics. A duplex doesn’t necessarily mean two identical units, similar in size, layout, facade, entrance and look. The dimensions of the lot will determine the placement of the two duplex homes.

Land title

The two units in a duplex development can either exist on a single land title, Torrens Title, or be subdivided into separate titles. In case of the latter, each individual home can be owned or sold separately. Subdivision of the title is a critical part of the planning and approval process, and will be subject to local council rules.

Better than an apartment, almost a detached house

A duplex allows the home buyer to consider exclusive neighbourhoods at a lower price. Homeowners living in a single dwelling house can redevelop their property into a duplex where they retain one unit for themselves and rent the other to generate income. Alternatively, they can subdivide the title and sell one dwelling to cover their construction cost. The upside is they can continue to live at the same address in a brand new home with some extra money in the bank from the sale of the second dwelling.

When evaluating their options, home buyers often compare duplex homes to apartments – it’s not a fair comparison. Apartments mean a lot more neighbours, shared facilities, no open spaces, pet rules, and limited opportunity to make any changes since it involves consulting with all the owners. On the other hand, a duplex will get you a single neighbour, open outdoor space, reasonable opportunity to make changes after consulting with the neighbour, flexibility to have pets without being governed by rules – almost all the advantages of living in a detached dwelling without paying the price for one.

Building a duplex

Developers specialising in duplex homes often recommend premium neighbourhoods for building duplexes. Build costs being the same everywhere, an exclusive location will be a key differentiator for buyers as it adds snob value to the property. Additionally, higher build quality and premium fittings will ensure good returns on the property.

The cost to build a duplex is typically just over a million dollars, with a build turnaround of 3-4 months. Ideally, the block planned for a duplex should be level and have street frontage for each dwelling. Local councils have different zoning rules but the block should optimally be about 600sqm though duplexes have been built on smaller properties. Larger blocks – about 700sqm or more – will provide more room for design flexibility and help create dwellings closer in space and design to a detached home.

New rules introduced in NSW in 2018 to promote housing affordability allow a duplex to be built on a 12-metre wide block as against 15-20 metres required earlier by councils. While developers still need to meet the minimum block size of 500-600sqm required by councils for a duplex, lots can even be 400sqm if the local council doesn’t specify a minimum, and Champion Homes is a common builder for these homes. 

The medium density housing code of 2018 in NSW also requires dual occupancy dwellings to have a minimum setback of 0.9 metres, with each dwelling to be 5 metres in width and a maximum height of 8.5 metres. Each dwelling must also face a public road. Blocks where the duplexes have dwellings placed one above the other must be at least 15 metres in width.

When compared to a detached, standalone house, living in a duplex home may mean less privacy and reduced availability of outdoor space. There’s also limited potential for changing the exteriors and adding value to the property unlike a detached house. However, at the end of the day, a well-designed duplex home in a good location is as good as a detached house – but at almost half the price!

Up arrow and many houses. Growth in real estate prices market. Buying and selling house
April 7, 2022 by ash 0 Comments

Real Estate 2022: Boom ‘softer’ but not over

After a year of record-breaking sales and unprecedented value growth, real estate industry experts say 2022 is looking to soften.

The tightening of debt accrual, fewer foreign investors and worsening affordability constraints are all signalling the end of 2021’s unprecedented activity.

In a CoreLogic Outlook for 2022 report, the real estate industry analysts cited ‘softer growth rates are likely to coincide with fewer purchases’.

But what about the Hunter region?

Hunter property buyers agent Chad Dunn says the first quarter of 2022 could be all about our big city neighbour.

“The biggest thing facing us in February is if China goes into Taiwan,” he said.

“That’s what top-end clients in Sydney are saying. They’re watching the situation very carefully.

“I’m not saying that it’ll be a world war, but it will send shock waves to the stock market and in turn to the property market.”

In the three months to October, housing finance data shows the amount of money loaned for the purchase of property fell 6.3% compared to the previous quarter.

Mr Dunn believes these numbers are irrelevant when money moves out of a capital city and into regional suburbs.

“Sydney still sees Newcastle as really good value,” he told Newcastle Weekly.

“In fact, it’s only Newcastle locals trying to enter the market that say otherwise.

“I think growth will continue in 2022 for properties with a lifestyle factor, properties with a bush outlook, a sea view or lake access, and let’s face it that’s all here in Newcastle.” 

Port Stephens is another region on Mr Dunn’s radar. 

“It’s really coming into its own at the moment. We’re starting to see Newcastle locals pushed out of the market move further north to Port Stephens and commute to work.

“While Sydney buyers are heading into Newcastle, Newcastle is moving into Port Stephens.”

Demographers might agree.

“You’ve probably heard of the 2022 great resignation predictions,” Mr Dunn said.

“I think we’ll see more and more people seeking employment that allows them to work remotely, and I think regional areas like Port Stephens and the Hunter Valley will benefit from this.”

April 1, 2022 by ash 0 Comments

“A great budget for homeownership”

REIA welcomes real estate measures in Budget 2022, but says more needs to be done for long-term growth

The Real Estate Institute of Australia has welcomed the real estate measures in Budget 2022, calling it “a budget for the times.”

REIA president Hayden Groves said Budget 2022 would help push down runaway inflation and help mitigate challenges to housing affordability.

“With 50,000 new places coming online through the First Home Loan Deposit Scheme, this is a most welcome measure,” Groves said. “This is a $24 billion commitment in guarantees that could generate up to $30 billion in sales activity, which will directly assist first-home buyers into the market sooner as well as stimulating the economy. Setting up Australians into homeownership is a critical measure at this stage of Australia’s political and economic cycle, and it is applauded by REIA.”

Groves said REIA also welcomed the budget’s additional $2 billion to the National Finance Investment Corporation’s mandate to help enable additional supply of social and affordable housing.

REIA said the budget contained “some very good measures” that would help the economy. However, the organisation said the forecasts for inflation were “very conservative,” at 4.25% for 2022 and 3% and 2.75% over 2023.

“Even on these forecasts, wage growth is very modest over 2022 to 2023, which doesn’t augur well for interest rates and housing affordability,” Groves said.

Groves said Australia needed a strategy for longer-term and more sustained growth.

“Budget 2022 addresses the transitory conditions Australia is experiencing with targeted measures,” he said. “However, more needs to be done to improve productivity and real wages, rather than just compensation for price increases and taxation reform. It is only through sustained economic growth that we will pay for the spending of the last two years, necessary as it was.”

REIA called for “a sizeable skills package” to help the real estate industry shape its future workforce.

“The 27% of Australians living in private rentals remain frustrated by our 45,000-property manager shortage, as do Australia’s real estate agencies,” Groves said. “Whilst we were disappointed to see the final intake of the very successful Boosting Apprenticeships continued only to the end of June 2022, and we hope the additional $2.8 billion for the five-year Australian Apprenticeships Incentive Program will be extended to all those who need it in the post-COVID world.”

Groves also said that the government needed to tackle the housing supply issue.

“One of the major areas governments can address housing affordability is to take a leadership role to unlock supply through National Cabinet,” he said. “This is obviously something that needs to be tackled in future budget cycles with all three tiers of governments, as until this is addressed, the right supply mix within our existing housing stock and new homes affordability is unlikely to improve in the near term.”

Groves said that, overall, Budget 2022 was reassuring for homeownership and consumers or aspiring consumers within the property market.

“Pre-election periods can mean Australians can be reluctant to list their home for sale or rent,” he said. “With a budget that deals directly with inflationary pressures, contains a moderate outlook for interest rates and supports key investment measures like negative gearing retaining bipartisan support, Australians should move forward with plans to sell and capitalise on the current strong market conditions. A great budget for homeownership – but more needs to be done to set Australia up for future success.”

March 16, 2022 by ash 0 Comments

Soaring rental prices creating housing crisis in regional NSW

A growing number of regional cities and towns across NSW are in the midst of a rental crisis, as short supply and a surge in sea and tree changers leaving Sydney see rental prices soar.

New data shows that weekly rents in more than 20 regional markets have jumped by 10 per cent or more in the space of a year, with asking rents in five regions outstripping those in Greater Sydney.

The latest Domain Rent Report, released Thursday, shows rents in the Byron Bay, Ballina and Tweed council areas on the state’s north coast, Wingecarribee council area in the Southern Highlands and Kiama, have outstripped Sydney’s median rent price of $550 a week for a house.

Popular Byron Bay remains the most expensive regional market with a massive median rent of $880 – up more than $180 or 26.2 per cent year-on-year – making it pricier than most of Sydney, bar the eastern suburbs, northern beaches and north shore.

Median weekly asking rents also jumped by more than a quarter in the Snowy Monaro (28.6 per cent) and Bellingen (26.8 per cent) council areas. The Wingecarribee (20 per cent), Ballina (19.2 per cent), and the Eurobodalla (18.2 per cent) regions also recorded some of the sharpest rent hikes.

Increased demand and too little supply of both homes for sale and lease had seen rental prices soar on the Mid North Coast, said Nathan Cardow, principal of Cardow and Partners Property Bellingen.

“It’s like we’re a bicycle shop, and we have no bikes left, we’re not selling much, and we’re not renting much,” he said.

When the coronavirus pandemic hit, a lot of landlords, primarily from Sydney, moved back to the Bellingen region, Mr Cardow said, reducing the number of homes for rent. On top of that came an increase in Sydneysiders looking to rent in the region due to the rise of remote working, and in more recent months, tenants priced out of the Byron region.

“They’re a pretty decent portion of the market now; they’re looking for affordability and say it’s just got too crazy up there [in Byron],” Mr Cardow said.

The average home in the Bellingen region, which has a median of $520, is now getting between five to 10 applications, he said, with an increasing number of tenants looking to offer above the advertised rate or pay more rent upfront to try to beat the competition.

Former East Ballina resident Belinda Nelson is among those who have had to leave their community behind, moving some 40 kilometres south to the small town of Woodburn this week.

The single mother of two teenagers – who both go to school in Ballina – went to almost 70 rental properties priced between $350 and $550 over four months, starting locally and then looking to the likes of Alstonville and Lismore. She had no luck and feared she was facing homelessness until she secured a rental privately through an acquaintance for $400 per week.

“You go to the inspections, and there are 50 people there, and they are telling me if you offer more or offer to pay six months in advance, you’ll get the property,” she said, adding the one time she did try to offer more, she was outbid.

“I didn’t have a choice, I didn’t want to leave Ballina, I moved there [years ago] to take care of mum, and now we’ve been forced out in a way, and believe me, I’m not alone; some of the stories are horrific.”

Other locals reported they had rents hikes of up to $100 a week, with some landlords attempting to lift rents by hundreds of dollars between tenancies. Meanwhile, strong competition for properties had many renters spending months trying to find a place – often resorting to sub-par properties, or in some instances a motel, to get a roof over their head.

The Tenants’ Union of NSW has been inundated with calls in recent months from regional Australians facing rent hikes they can’t afford or terminations as landlords look to sell or make way for new tenants prepared to pay more.

“We keep getting calls from people being evicted in order to make way for higher rents, and then they aren’t able to find a new home that is affordable and are accepting much lower quality and losing amenity, or they have to leave town, then there is a flow-on effect to other regions,” said chief executive Leo Patterson Ross.

A lot of people are really struggling and desperate to find a home, and that’s driving up the rents even faster because there is such demand,’ he said.

“We are seeing people increasingly facing homelessness, sleeping in their cars.”

There have been spikes in evictions up and down the NSW coast, but also in regional cities like Tamworth, Armidale and New England, Mr Patterson Ross said. Adding that on top of increased demand from sea and tree changers, some markets were dealing with already limited supply due to floods and fires in recent years.

Increased demand from Sydneysiders, combined with the rise in holiday rentals, has also seen rents spike in the Snowy Mountains, putting pressure on the supply of longer-term rentals in Jindabyne and the surrounding regions for locals and seasonal workers, said Gordon Jenkinson, principal of First National Real Estate Kosciusko.

“The supply of permanent rentals has dropped, as has the number of properties for staff; this has created a lot of drama. Over the last couple of years, we’ve had huge issues with people camping along the lakefront and in people’s yards because they can’t get find get somewhere to rent,” Mr Jenkinson said.

Landlords could pick and choose their tenants, with most properties receiving at least a dozen applications, Mr Jenkinson said. Strong competition for the limited supply of rental homes – his office has an occupancy rate of 100 per cent – meant some locals were being pushed out of Jindabyne to surrounding towns, which was then having an impact on prices there.

March 10, 2022 by ash 0 Comments

2021 Toowoomba Property Market Update

The Australian property market has had a year unlike any other in 2021, and we certainly experienced it here in Toowoomba.

Rising home values, increasing rents and demand outstripping supply – we had it all. We look back on a year of historic growth and find out what we can expect in 2022.

2021 – the year of the regional property boom

Regional markets across the country boomed this year, thanks to record low-interest rates, an increase in remote working, relatively affordable property and a major tree change trend that saw big city dwellers fleeing ongoing lockdowns in search of more space and a laidback lifestyle. The top-performing regions, according to CoreLogic, were lifestyle areas within a reasonable commuting distance of the capital cities, like Toowoomba.

House values rose across regional Queensland, and here in Toowoomba, we saw a huge 15.5% increase. Unit prices increased too, with 18 of the 22 Queensland regions recording at least a 10% rise, while 12 regions saw values rise by more than 20% across the year.

Other measures of a hot market were also in evidence, with the average number of days property spent on the market before being sold declining across regional Queensland. Meanwhile, demand is well and truly outstripping supply, with advertised listings across regional Australia currently 37% below the five-year average, while the number of home sales is sitting about 24% above the five-year average.

The Toowoomba sales market in 2021

Here in Toowoomba, we’ve seen incredibly strong demand from buyers for all types of property, and homes are being snapped up as soon as they come onto the market. FOMO (the fear of missing out) is playing a role here. The market is so competitive that some buyers are willing to compromise on their idea of the ‘perfect’ home just in order to secure a property, while others are entering the rental market while they continue their search for the right home to buy.

First home buyers in Toowoomba

First home buyers have been out in force in Toowoomba this year, driven by a tight rental market and the desire to get a foot on the property ladder before the prices rise even more. They’ve been prompted by low-interest rates and aided by first home buyer schemes.

Data from the Real Estate Institute of Queensland (REIQ) shows that Queensland first home buyers are acquiring property at the fastest rate in 13 years, buying around 3,000 homes every month, and first home buyer loans are at their highest level since 2008.

But this trend has not been reflected around Australia. In fact, the number of first home buyers across the country decreased by 12.6% in the September quarter, according to the latest Real Estate Institute of Australia (REIA) Housing Affordability Report. This drop has been driven by worsening housing affordability issues.

The fact that we’ve seen a 50% increase in first home buyers in Queensland over the last 12 months is a sign of the relative affordability and enviable lifestyle on offer here.

Property investors in Toowoomba

Property investors have also been very active here in Toowoomba this year. We’ve seen long term investors take advantage of the rising sales market to sell long-held investment properties, and we’ve also seen strong interest from new investors. After all, Toowoomba is being touted by experts as a savvy place to invest in property, and some Toowoomba suburbs have returned exceptional results for investors this year. However, with more owner-occupier activity taking place, the investment market is feeling a bit of a squeeze. Only time will tell how this will impact the rental market.

The Toowoomba rental market in 2021

Just as the sales market has seen price increases this year, so too has the rental market. The average weekly rent for houses in Toowoomba has now hit $416, according to SQM Research, the highest level in more than a decade. Units, meanwhile, are now renting for $329 per week after reaching a multi-year high of $340 a week in November.

These price hikes are being driven in part by a scarcity of available rental properties. For example, there were only 165 properties listed for rent in Toowoomba in the week ending 1 November, the lowest number in more than a decade. We’re seeing many tenants choosing to stay put and renew their existing leases rather than compete in a tight rental market for a new home. Some are even offering to pay above and beyond the asking rent and sign long term fixed leases in order to maintain their tenancy.

Looking Ahead to 2022

Demand for property here in Toowoomba continues to outstrip supply, and we anticipate the strong market conditions we’ve seen this year will continue into the next. Experts are predicting our property market will experience a significant surge over the next five to ten years.

COVID living has seen us all put a bigger emphasis on our lifestyle at home, and the desire for a swimming pool, a second bathroom or a home office remains a focus for many buyers and tenants.

With our state and international borders now opening up, we could well see more new buyers and tenants arriving here in Toowoomba from outside Queensland.

Housing affordability declined across the country during the September quarter, with the proportion of income needed to meet loan repayments rising to 36.2%, according to the REIA. While property in Toowoomba remains relatively reasonably priced in comparison to the capital cities, as prices here continue to rise, affordability will be something to keep an eye on.

March 2, 2022 by ash 0 Comments

Flooding won’t leave lasting imprint on market – experts say

Two property professionals have offered reassurance to investors that the flooding currently impacting South-East Queensland is not expected to impact the long-term Brisbane housing market.

In spite of a downturn in prices seen following the 2011 floods, Pete Wargent, co-founder of BuyersBuyers Australia, stated that detached houses in the Brisbane region experienced a 25 per cent price increase in the subsequent five years. He predicts that this cycle will be repeated again after this year’s flooding event.

“Over the medium and longer-term, history shows that there will be a relatively insignificant impact on the housing market,” he said.

Similar to the period after 2011, BuyersBuyers chief executive Doron Peleg believes the current flood crisis will eventually become a distant memory for the Brisbane housing market.

“There was a perception after the [2011] floods that flood-prone areas might be perceived negatively or experience poor capital growth, but that did not prove to be the case,” Mr Peleg said 

Key to the market’s substantial rebound in 2011 was the fact that in most cases, buyers were able to largely overlook the “infrequent” risk of flooding in order to acquire a water-side property.

Continuing, he said, “a few years ago, our market research showed that out [of] the top 20 suburbs impacted by floods in 2011, nineteen of them outperformed the Brisbane house price growth benchmark over the following five years.”

The exception to these findings was the north-eastern Brisbane suburb, Pinkenba, which had its pricing impact by other factors, notably its proximity to the airport.