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.
Large lots and family homes, central villas and units, seaside property and small acreage all combine to create a wonderful mix of property to suit every lifestyle.
Property researchers RP Data report this week that blocks of land for housing are getting smaller in the metropolitan areas; however, there are many areas around the nation where land areas are expansive.
Evolving lifestyle preferences and affordability constraints are also driving land areas smaller. More and more households are choosing to live in detached homes involving less maintenance, and developers are producing smaller lot housing in an attempt to provide more affordable housing alternatives.
The recent HIA-RP Data Residential Land Report highlighted that vacant lot sizes have generally been declining throughout the decade, and this phenomenon reflects deteriorating land affordability. As a result, these smaller lot sizes being delivered will continue to lower the average lot size of housing lots.
There’s broad awareness of the conventional wisdom, suggesting sharemarket crashes are followed by an inevitable flight to property – the safe bet in uncertain times.
With record low interest rates, residential housing is rising in affordability. And while unemployment will have a negative affect, most economists predict it will only rise between seven and eight per cent, which is back where it was in 2001 – the start of the last property boom.
For those who have job security, property becomes a viable investment option.
Real estate holding costs are about a tenth of what they were a year ago and rents have been rising rapidly in capital cities. In some regional areas across Australia, positive gearing is a new reality, and there’s been a quiet return of investment buy-to-rent players. Missed by the general media as First Home Buyers are the story of the day – investor numbers were up nearly three per cent after bottoming out right at the end of last year.
The laws of supply and demand will always rule the day, and Australia shows no sign of solving its unique housing shortage in the near future. With many white collar jobs being lost in the investment banking sector, demand for expensive inner city apartments may weaken, but this only makes regional areas even more attractive for savvy property investors.
RP Data also says that the recent release of the National Housing Supply Council ‘State of Supply Report’ has confirmed that Australia is likely to face an ongoing undersupply of housing.
The report projects a shortfall between demand and supply of 23,000 dwellings in 2010, which is likely to increase by a similar amount each year until 2016. Of course, the greater the gap between supply and demand, the more upwards pressure there is on housing prices.
Our local market has continued to demonstrate good returns for investors, with Shultz Commercial First National’s Dan Shultz reporting a number of larger commercial investment sales as well as the introduction of new business to the area.
“This activity shows continued interest in the area, which is seen as a large and active regional commercial precinct,” said Dan.
Despite the recent rain, we have a very pleasant Autumn in front of us, so enjoy the season and the real estate buying and selling process and take advantage of the great value property available.
The local market is still very active, with buyers ranging from first home buyers to investors and retirees.
The reasons for people selecting the Manning and Great Lakes areas for their home are varied and do not only revolve around our affordable prices.
We are now seen as a great place to live and raise a family, with the schooling, recreational and natural features being key attractions.
While we are all pleased that our market and local interest is healthy, our thoughts are with those in Victoria involved in the bushfires and in the Queensland floods.
Areas just to the north of us between the Hastings and Tweed areas have also been involved in a struggle with nature.
All these events highlight the need to think ahead in two respects with our property.
Firstly, insurance, where we should always review and understand what aspects of our property is covered and the amount of that cover.
A recent report from Victoria outlined a property owner’s plight, when he realised that he had not reviewed his insurance policy since it was taken out 25 years ago.
He thought that the insurance company would automatically review the amounts covered for him over the period – not so.
The second area that should be reviewed is your home’s capability in being prepared for dramatic events.
These unforeseen events can affect residential areas as well as rural, so the time for checking your drainage system around your home and cleaning the gutters is not in the middle of a deluge (like me!)
Another hazard to be aware of is debris, particularly timber, stored or accumulated around or under your home. This is not only an attraction for termites, but it may also be a fire hazard.
This could not only impact on your property, but also your neighbours and their family.
So while we are thinking of our interstate neighbours, think also of those neighbours closer to home.
In business news, our commercial area has continued to show growth, with Taree’s Centerpoint Arcade seeing increased activity with the recent inclusions of new businesses to complement the existing operations.
This is a vital link from Taree’s major carpark facilities to the main street, which is looking very attractive with its outdoor seating for cafés and progressive business owners presenting their premises to a high standard.
Happy house hunting, and remember to enjoy the exciting process of your house purchase.