Real Estate Update – July09
It’s All About Confidence …
We’ve all heard about our elite sports people having their own ‘sports psychologist’ to assist them in reaching peak performances. This just indicates that despite being at a peak state of personal fitness, our mind needs to be in the correct positive frame to reach our desired result.
And so it is with the real estate market.
The release of recent excellent consumer confidence figures confirms what real estate agents across the country have been seeing for months, according to First National Real Estate.
“We have been saying for the last few months that we believe the Australian market has turned the corner, and this latest surge in consumer confidence proves we were right,” said First National CEO Ray Ellis.
Released last week, the Westpac-Melbourne Institute Index of Consumer Sentiment recorded it’s largest jump in 22 years. First National Real Estate has more than 500 members throughout Australia as well as New Zealand and are firmly of the opinion that property has been leading this positive sentiment. It does not matter if you are buying or selling, when housing affordability is this good, everyone wins and everyone feels confident.
The market is always about confidence. The latest BIS Shrapnel research that suggests up to a 19% increase in house prices by 2012, indicates this confidence should continue into the future.
First National Real Estate first noticed the turnaround towards the end of last year, but since then have seen quite spectacular results for the beginning of the year, with some members recording record clearance rates. This national sentiment has also been seen locally. Certainly the First Home Buyers Grant helped, but now we are beginning to see movement in every part of the market. That is clearly about confidence.
Vendors feel they can now confidently set a price, and we have found that a well informed vendor can set a realistic price and get the result they want. We have been able to help many people sell their homes to first home buyers and then successfully trade up into a property that would have been unrealistic last year.
Incentives are also now available for non first home buyers.
The State Government announced a NSW Housing Construction Acceleration Plan (HCAP) in the NSW Budget 2009-2010.
In short, the HCAP means that transfer duty on certain contracts for sale or transfers of certain residential property in NSW will be cut by 50%.
The HCAP will apply to anyone other than persons eligible for a First Home Owner Grant or for NSW First Home Plus stamp duty benefits.
The HCAP will only be available:
To an agreement for sale or a transfer (with no prior contract) of a new home that is: a home that is complete and ready for occupation that has not previously been occupied or sold as a place of residence (and this can include a substantially renovated home);
Executed on or after 1 July 2009 and before 1 January 2010;
Where the dutiable value does not exceed $600,000;
Where the home and the land on which the home is located are intended to be used only for residential purposes;
In the case of an off the plan purchase, the agreement must state that the sale or transfer must be completed before 30 June 2011;
Where none of the transferees is eligible for the First Home Owner Grant or for NSW First Home Plus stamp duty benefits;
The HCAP can be claimed more than once, provided that all of the eligibility criteria are satisfied;
There is no limit on the age of a new home. So long as the home has not previously been occupied or sold as a place of residence, it can be a ‘new home’.
The purchase of a vacant block without a new home that is complete and ready for occupation at the time of the transfer of the land will be ineligible for the new HCAP. This means that the 100% rate of transfer duty will still apply to the transfer of vacant land in NSW.
In some circumstances, the transfer duty payable on the transfer of a vacant block could actually be less than the HCAP 50% rate of transfer duty payable on the transfer (or agreement to transfer) of the land plus new home. This means that calculations should be undertaken to determine if it might be preferable for a purchaser to purchase and take a transfer of vacant land and subsequently build a new home on it, rather than taking a transfer of the land plus a new home where the HCAP conditions are satisfied.
Other conditions may also apply.
Our local markets continue to be very active for both owner-occupiers and investors. With a steady influx of families seeing the area as a desirable place to raise a family, investors are following.
Until next time, happy house hunting. Wayne Shultz.