Builders worried as stimulus fades
BUILDERS are worried there will not be enough private sector work available when the Federal Government stimulus programs end.
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Builders worried as stimulus fades
Clearance Rates In Sydney Rising
Residex collected 95% of all Auction sales across NSW for the week ending 2nd July 2011.
The results are as follows:
Sydney Metro Clearance rate increases slightly to 56%
Regional NSW Clearance rate remains unchanged at 29%
Dairy farm sale cracks market
NEVILLE Peck is a rare breed.
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Dairy farm sale cracks market
Rural land sales lift
INTEREST in the rural property market has picked up, according to leading real estate agents.
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Rural land sales lift
Renewed intrest in dairy farms
DAIRY farms aren’t tipped to reach the high prices of 2008 but the market is picking up, writes SIMONE SMITH
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Renewed intrest in dairy farms
Top 5 outdoor reno tips
Gavin Taylor, director at Metropole Property Strategists, shares with Your Investment Property the following tips when considering an outdoor makeover
- Make sure the building presents well: This may mean re-painting, re-roofing, modernising the spouting and guttering, replacing window frames, or reconfiguring the entrance area – it’s all focused on giving the building an excellent external feel.
- Provide outdoor entertaining: With our excellent climate, a good outdoor entertaining space is greatly sought after. This could take the form of a deck, or even better a pergola which might have a vine growing over, or a retractable sun-shade. Or perhaps a verandah added on to a family room.
- Outdoor lighting: In the evening, a garden or an entrance looks wonderful with good lighting. It can emphasise a feature or hide a blemish. Careful lighting can create an ambience of comfort and style which will make the property very desirable. Don’t forget to market the property at a time that shows this off.
- Car spaces: Off-street car spaces are worth a lot, both in dollars and convenience. And covered off-street parking – a carport or a garage – is right at the top of the pile.
- Landscaping: Landscaping can add hugely to presentation, usefulness and desirability – but can detract if done badly. Achieve a balance between maintenance, water efficiency and hard and soft surfaces to create a landscape in which the property stands out.
This article has been republished with permission from Your Investment Property magazine. Try our Loan Repayment Calculator and find the best repayment strategy for you.
Homesales.com.au
Homesales.com.au has launched a new free to list service for licensed real estate agents.
The no-cost offer is ongoing and is open to real estate agents selling residential properties Australia-wide. Homesales.com.au, the property arm of Australia’s No.1 automotive classifieds group carsales.com Ltd, launched in 2009 as a dedicated residential real estate site.
TAHL in sales talks with Ascendas
ASCENDAS is rumoured to be in talks with Australia’s largest hotel owner, Tourism Asset Holdings, on the purchase of 20 properties.

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TAHL in sales talks with Ascendas
Mirvac looks ripe for picking
MIRVAC Group could be a takeover target for private equity, an Asian developer or local property giant Lend Lease.

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Mirvac looks ripe for picking
Credit to boost Charter defences
CHARTER Hall has boosted its line of credit with Westpac by $25 million to $100m for further investment opportunities.

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Credit to boost Charter defences
Marketing Your Rental Property Online
Welcome to the age of the Internet. Fortunately, the Internet provides several opportunities for those invested in the real estate market. Taking your real estate marketing campaign online offers you access to extremely qualified candidates to whom you may not otherwise be able to connect.
Centro completes US portfolio sale
Major step in moving to Aust-only model: chairman. 29 Jun 2011 2:22 PM
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Centro completes US portfolio sale
Grazing at Giffard
THE best of both worlds is on offer at this fantastic Giffard property.
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Grazing at Giffard
Tinamba West dairy for sale
THESE proud dairy farmers will work until the day they leave, writes CIMARA PEARCE
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Tinamba West dairy for sale
homesales.com.au give agents free kick
homesales.com.au has launched a new free to list service for licensed real estate agents. The no-cost offer is ongoing and is open to real estate agents selling residential properties Australia-wide.
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homesales.com.au give agents free kick
Reportfinder.com.au
Reportfinder.com.au is a concept dedicated to delivering a much needed service to the real estate and pre-purchase inspection report industry.
We endeavor to make the pre-purchase report part of your next property purchase as pain-free as possible by giving you access to reports that have already been carried out and introducing prospective buyers to qualified inspectors in their area.
Reportfinder.com.au
Valad Property scheme vote on August 1
Valad Property scheme vote on August 1… 28 Jun 2011 20:37 PM
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Valad Property scheme vote on August 1
Acorn Capital diluted to 9.07% in IPGA
Acorn Capital diluted to 9.07% in IPGA… 28 Jun 2011 18:23 PM
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Acorn Capital diluted to 9.07% in IPGA
Gen-Y ‘avoid rent’ to save for home loan
A SURVEY of mortgage-holders under the age of 30 found 71 per cent of respondents claimed never to have rented a property.

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Gen-Y ‘avoid rent’ to save for home loan
Housing exposure won’t bite our banks
Calls for Australian banks to reduce their property exposure not only ignore the fact that business loans are far riskier, but fail to recognise the broader stimulatory effect of property lending. 28 Jun 2011 12:12 PM
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Housing exposure won’t bite our banks
IMF buoyed by ASIC’s Centro win
Litigation funder to continue class actions against property group. 28 Jun 2011 10:30 AM
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IMF buoyed by ASIC’s Centro win
Directors feel Centro’s governance chill
Company directors have been put on notice through the Centro Properties case that they are still liable for their actions, irrespective of the advice of external experts such as professional auditors.
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Directors feel Centro’s governance chill
Property market set to improve
The residential property market has been slow recently, but a combination of factors will come together to see the market improve from 2011-12, predicts BIS Shrapnel.
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Property market set to improve
Westfield’s Lowy recovering from surgery
Company says operation on bile duct successful.
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Westfield’s Lowy recovering from surgery
A bellyache for property bears
Moderate housing growth until 2014 is on the cards for Australia, BIS Shrapnel says, but which areas will benefit the most? 27 Jun 2011 2:58 PM
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A bellyache for property bears
Fund manager fees ‘too high’
MACQUARIE Real Estate founder Bill Moss is questioning the fee-charging regime of listed property fund managers.

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Fund manager fees ‘too high’
Sydney Auction Results Saturday 25th June 2011
| Total Properties: 322
Sold: 213 Withdrawn: 31 Cleared: 60% Total Sales: $176,461,600 Median: $805,000
KEY: S indicates property sold; SP – property sold prior; PI – property passed in; PN – sold prior not disclosed; SN – sold not disclosed; NB – no bid; VB – vendor bid; o res – other residential; w – withdrawn prior to auction; N/A – price or highest bid not available; SA – sold after auction; SS – sold after auction price not disclosed. br – bedroom(s); h – house,cottage,villa, semi,terrace; u – unit, duplex; t – townhouse; dev site – development site; o res – other residential. For a more comprehensive list of results covering all reported sales by postcode in the past 12 or 24 months, visit http://www.homepriceguide.com.au Copyright © Australian Property Monitors 2011. |
Melbourne Auction Results Saturday 25th June 2011
| Total Properties: 212
Sold: 117 Withdrawn: 7 Cleared: 53% Total Sales: $84,331,000 Median: $647,500
KEY: S indicates property sold; SP – property sold prior; PI – property passed in; PN – sold prior not disclosed; SN – sold not disclosed; NB – no bid; VB – vendor bid; o res – other residential; w – withdrawn prior to auction; N/A – price or highest bid not available; SA – sold after auction; SS – sold after auction price not disclosed. br – bedroom(s); h – house,cottage,villa, semi,terrace; u – unit, duplex; t – townhouse; dev site – development site; o res – other residential. For a more comprehensive list of results covering all reported sales by postcode in the past 12 or 24 months, visit http://www.homepriceguide.com.au Copyright © Australian Property Monitors 2011. |
Just Jeans Group founders put Port Douglas hilltop retreat on market
A Far North Queensland real estate agent has just listed the region’s most expensive property in the current market which is expected to fetch more than $10 million.
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Just Jeans Group founders put Port Douglas hilltop retreat on market
Phoenix rises to shine
THE Gold Coast residential property market has been delivered a strong vote of confidence with the launch of Trilink Group’s $60 million residential development at Varsity Lakes.
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Phoenix rises to shine
Mirvac provides $80.8m against Tennyson flood damage
Mirvac provides $80.8m against Tennyson flood damage… 25 Jun 2011 06:28 AM
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Mirvac provides $80.8m against Tennyson flood damage
Select Asset Management buys 1.6m Primeag shares
Select Asset Management buys 1.6m Primeag shares… 25 Jun 2011 06:28 AM
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Select Asset Management buys 1.6m Primeag shares
Buyers head for the hills
WHILE the market has been very slow, Peter Wrigley of Carolans First National has been getting enquiry in the Nambour and Palmwoods areas.

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Buyers head for the hills
Fortune favours brave buyers
DAN Neylan does not believe the market will languish like the early part of this year.

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Fortune favours brave buyers
Struggle year not like ‘old days’
THERE is no doubt that 2010 was a struggle in all sectors from real estate and development through to retail and tourism, says Ben Wilson of Ray White Lifestyle.

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Struggle year not like ‘old days’
Agents predict market swing
THE six months leading up to Christmas will be tough for the Sunshine Coast, according to Vicki Stewart of Stewart Tandy and Associates.

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Agents predict market swing
Coast family create viral video to sell home
ONE Gold Coast family has turned their kids into YouTube sensations in a bid to sell a house the real estate agents couldn’t shift.

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Coast family create viral video to sell home
360 Capital defers trust float
Sources say demand for IPO was weak. 24 Jun 2011 5:57 PM
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360 Capital defers trust float
Real Estate Investing In an Economic Downturn
Have you ever thought about going into business, even if everyone you know is telling you it is not a good idea? The chances are strong that you will allow your family and friends to dissuade you from even making the first move toward your dream of going into business on your own.
Weiss Asset Management buys 10.6m Trinity securities
Weiss Asset Management buys 10.6m Trinity securities… 24 Jun 2011 13:27 PM
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Weiss Asset Management buys 10.6m Trinity securities
Mirvac writes off Brisbane development
Tennyson Reach development $80m value wiped out. 24 Jun 2011 12:42 PM
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Mirvac writes off Brisbane development
Mortgage stress, concern about interest rates and the adventurous couple who bulldozed their house: This Week’s Picks
This week we read about how the number of homeowners falling into arrears has increased, how clever design can bring space to a home on a subdivided block and learnt how interest rates are more important to homeowners than exit fees. Check out This Week’s Picks below:
Banning of exit fees welcomed
The decision to ban exit fees from July 1, 2011, has been welcomed by the comparison website RateCity.
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Banning of exit fees welcomed
US May new home sales, inventories fall
Inventories of new homes hits record low. 23 Jun 2011 10:39 AM
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US May new home sales, inventories fall
Perpetual motion sees Paul in the hot seat
AT PERPETUAL, Paul Skamvougeras’s colleagues often joke that he has done well to buy an island in his native Greece.

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Perpetual motion sees Paul in the hot seat
Moss plans sale of local Charter assets
MACQUARIE Real Estate founder Bill Moss says unitholders must back liquidation of Charter Hall Office REIT’s $1.86 billion local portfolio.

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Moss plans sale of local Charter assets
Melbourne properties going cheap…
The Melbourne property market has certainly seen better days. Most real estate agents are struggling to clear properties as people are looking but not buying. According to RP Data, during April, Melbourne houses were discounted by an average of 6.9 per cent from their initial asking price ito help achieve a sale
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Melbourne properties going cheap…
Project Rebellion : Front Page News!
Over the past several weeks Ben Hurley from the Australian Financial Review has been conducting an investigation into the revolt by real estate agencies around the country against Realestate.com.au. Today on the front page of the Australian Financial Review Ben’s article “Real Estate Agents Revolt” appears. The article discusses hotly debated topics on this blog and its interesting seeing the discussion raised in more mainstream media.
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Project Rebellion : Front Page News!
Mortgage Stress Bites: Western Sydney and Logan Lead the Way
THE number of homeowners falling into arrears has increased with Western Sydney and Logan, in the Gold Coast corridor to Brisbane, leading the way according to new figures.
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Mortgage Stress Bites: Western Sydney and Logan Lead the Way
Dumping of stamp duty concession could result in higher rents
While the dumping of Tasmania’s stamp duty concession is another nail in the coffin for housing affordability, it might possibly result in a silver lining for landlords, according to Damien Taplin of TPC Valuers.
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Dumping of stamp duty concession could result in higher rents
Gillard tilts toward middle income Australia
Struggling to win over middle Australia, the prime minister offers early signs she knows how win a key battle with Tony Abbott. 23 Jun 2011 8:14 AM
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Gillard tilts toward middle income Australia
Review site to rate agents
Founder of Rate that Agent and former real estate agent, Michael Jackson said while agents can demonstrate their local experience and expertise through the online service, vendor and home buyers now have the opportunity to make a better informed decision when selecting an agent, based on past referrals and reviews.
“The motivation to create the site was to establish a national resource to shine the spotlight on top of real estate agents and caution unsuspecting home buyers and vendors about the poor ones,” Mr Jackson said.
What is Rate that Agent?
It’s an unbiased free online system that gives Real Estate Agents the power to demonstrate their local experience, expertise and track record and for Home Buyers and Sellers to connect with Agents based on Agent Profiles and past client endorsements.
Tips to attract top tenants
To attract quality tenants you need to offer a quality property. Here’s a guide to considerations you need to make before you purchase your property, after you buy and during the tenant search.
Purchasing a rental property
First off: identify the type of renter you’re hoping to attract and put yourself in their shoes. If you’re hoping to attract students, look for property close to universities, colleges and transportation. If you’re after families, then proximity of schools will play an important role. And if your ideal tenant is a senior, look for property close to community centres, shopping and transportation.
Also look for a neighbourhood that you’d want to live in. Is it a quiet road? Are the streets clean? Are the neighbours’ yards tidy? Are the parked cars in relatively good condition? A neighbourhood that is a mix of owner/occupier housing and renters is generally one that will be better kept than a neighbourhood that strictly caters to renters.
Once you’ve determined location, focus on the property itself. Again, think of your ideal renters’ concerns. Students looking for a share house will probably value big bedrooms, as they will spend more time there. Seniors will be looking for something that is one level. And families will be keen on something with a yard, preferably enclosed.
Making the property presentable
It goes without saying that the interior should be clean. Keep paint to muted colours – you might love a signature wall in the living room painted bright red, but it won’t be everyone’s cup of tea.
In the kitchen, fix drawers so they slide easily and make sure handles on screwed on tight. Get rid of stains, crumbs and mould. Lining the cupboards can cover a few sins. Invest in quality appliances and if you can’t afford new appliances, see what you can do to make them more presentable. For instance, new wire racks in the oven will go a long way in approving its overall appearance.
In the bathroom, consider buying a cheap, but new vanity. Installing a new toilet seat would also be a good touch. And a bright mirror is a definite must.
Renting it out
If you choose to rent the property out yourself, then there are a couple of things you can do to increase your chances of picking a good tenant.
One is to be honest in the ad. If you oversell its attributes, good tenants might get turned off and overlook the genuinely positive aspects of the property.
And don’t be greedy. Gauge how much similar properties in the area are renting for and price accordingly. If you overprice, you might find yourself with a tenant that is desperate to find a place because no one else would rent to them based on their history. And avoid increasing the rent too much. You’ll just encourage turnover and you could end up out of pocket for a considerable amount of time.
Be presentable. If you’re showing the property, make sure you look like someone the tenant would want to deal with. Let them know you would respond to needs quickly, but you’re not going to be visiting the property all the time.
Have a formal application that includes rental history and make sure you check references that include their employer and previous landlords/property managers.
If you decide to use a property manager, make sure you investigate their services thoroughly. Consider how they market properties, how they deal with issues such as arrears, repairs and maintenance, and how frequently they will inspect the property.
Landlords insurance
Sometimes you can do everything right and still end up with a bad tenant. Landlord insurance can take some of the stress out of renting by covering damage or loss to your property, protection against unpaid rent, theft or malicious damage, and even the cost of replacing or repairing furnished properties.

This article has been republished with permission from Your Investment Property magazine. Try our Loan Repayment Calculator and find the best repayment strategy for you.
Colonial sells 3m Charter Hall Retail REIT securities
Colonial sells 3m Charter Hall Retail REIT securities… 22 Jun 2011 17:38 PM
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Colonial sells 3m Charter Hall Retail REIT securities
Astro Japan Property reducing hedge book by 1/3rd
Astro Japan Property reducing hedge book by 1/3rd… 22 Jun 2011 15:53 PM
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Astro Japan Property reducing hedge book by 1/3rd
Stunning Wirraminna for sale
COASTAL, rural and lakeside living combine at Wirraminna to make an excellent lifestyle.
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Stunning Wirraminna for sale
The spark behind Seven Creeks Estate
TRADITION is a key to Seven Creeks Estate at Euroa, writes KIM WOODS
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The spark behind Seven Creeks Estate
Peaceful Picola home
KEVIN and Deborah Swan had lived in the small town of Picola all their lives.
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Peaceful Picola home
Land ownership review drags on
INTERNATIONAL investors continue to snap up Australian land and agribusiness.
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Land ownership review drags on
Kelly plays down mortgage concerns: report
Westpac chief unworried by rise in delinquencies. 21 Jun 2011 7:38 AM
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Kelly plays down mortgage concerns: report
Agricultural Land Trust pays 1.49c
Agricultural Land Trust pays 1.49c… 21 Jun 2011 06:09 AM
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Agricultural Land Trust pays 1.49c
The Great Aussie Dream is getting smaller……
THE great Australian dream of owning a double storey house in the suburbs with a pool, and a large back yard – is no more… Instead, more and more Australians would choose to own a townhouse or an apartment in close proximity to the city or other suburban centres. According to a report from the Grattan Institute, home loan affordability was not the only concern of potential home buyers. There are many myths and assumptions about housing , and what Australians really want
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The Great Aussie Dream is getting smaller……
Biggest home seller in Australia joins forces with The Big Issue
Ray White auctioneers put their skills to good use in Melbourne on Saturday in a unique challenge to promote awareness of homeless and marginalised Australians. Ray White auctioneers entered in to a sales challenge with vendors of The Big Issue to see how many magazines they could sell in twenty minutes, as part of the magazine’s 15 th birthday
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Biggest home seller in Australia joins forces with The Big Issue
Biggest home seller in Australia joins forces with The Big Issue
Ray White auctioneers put their skills to good use in Melbourne on Saturday in a unique challenge to promote awareness of homeless and marginalised Australians. Ray White auctioneers entered in to a sales challenge with vendors of The Big Issue to see how many magazines they could sell in twenty minutes, as part of the magazine’s 15 th birthday
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Biggest home seller in Australia joins forces with The Big Issue
How to tell if it’s the bottom of the property market
The market has cooled, properties are up for sale for longer periods of time and there are fewer buyers out there. So we should be at the bottom of the market, right
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How to tell if it’s the bottom of the property market
Interest Rates, Not Exit Fees Most Important to Homeowners
DESPITE the Federal Government’s claim that Australian homeowners are concerned about exit fees, a recent survey proves the opposite.
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Interest Rates, Not Exit Fees Most Important to Homeowners
Facebook, Twitter and Blogging, do’s and don’ts for the real estate agent!
Over the past year or so we have seen the rise of Real Estate Agents using Facebook to promote their business or personal profile. The best of you continually add informative and fun content to your page and have seen a steady rise in fans. But there is a disturbing trend to this and this shows complete mis-understanding of how to market yourself online.

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Facebook, Twitter and Blogging, do’s and don’ts for the real estate agent!
Hanging home buyers out to dry
It’s the central and retail banks which hold potential solutions to our property market problems, but both groups are looking the other way while home prices fall. 20 Jun 2011 7:53 AM
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Hanging home buyers out to dry
Aussies doing their block for city lifestyle
AUSSIES want more townhouses and apartments in desirable areas rather than a house on a quarter-acre block, a report reveals.

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Aussies doing their block for city lifestyle
Limits affect housing size choices
ASK someone in Australia what type of house they want to live in and the answer is a big freestanding home close to the CBD.

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Limits affect housing size choices
Sydney Auction Results Saturday 18th June 2011
| Total Properties: 309
Sold: 189 Withdrawn: 47 Cleared: 53% Total Sales: $147,191,500 Median: $735,000
KEY: S indicates property sold; SP – property sold prior; PI – property passed in; PN – sold prior not disclosed; SN – sold not disclosed; NB – no bid; VB – vendor bid; o res – other residential; w – withdrawn prior to auction; N/A – price or highest bid not available; SA – sold after auction; SS – sold after auction price not disclosed. br – bedroom(s); h – house,cottage,villa, semi,terrace; u – unit, duplex; t – townhouse; dev site – development site; o res – other residential.
For a more comprehensive list of results covering all reported sales by postcode in the past 12 or 24 months, visit http://www.homepriceguide.com.au Copyright © Australian Property Monitors 2011. |
Melbourne Auction Results Saturday 18th June 2011
| Total Properties: 257
Sold: 137 Withdrawn: 7 Cleared: 52% Median: $610,000 Total Sales: $78,279,470
KEY: S indicates property sold; SP – property sold prior; PI – property passed in; PN – sold prior not disclosed; SN – sold not disclosed; NB – no bid; VB – vendor bid; o res – other residential; w – withdrawn prior to auction; N/A – price or highest bid not available; SA – sold after auction; SS – sold after auction price not disclosed. br – bedroom(s); h – house,cottage,villa, semi,terrace; u – unit, duplex; t – townhouse; dev site – development site; o res – other residential.
For a more comprehensive list of results covering all reported sales by postcode in the past 12 or 24 months, visit http://www.homepriceguide.com.au Copyright © Australian Property Monitors 2011. |
Lowy’s $1.9m home makeover
AGING Westfield Group founder Frank Lowy has splashed out $1.9m on his harbourfront mansion to make it easier for him to access.

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Lowy’s $1.9m home makeover
Clever fence men make pool inspections a snap with iPhone app
Cairns businessmen are using their iPhones to help ease the pressure of their? workloads.
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Clever fence men make pool inspections a snap with iPhone app
Much-loved home scans the skyline
FROM the street it looks like your average house, but when welcomed inside you discover it is a family home built out of hard work, happy memories and a love that has lasted more than 55 years so far.
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Much-loved home scans the skyline
Cove’s shrinking footprint
SANCTUARY Cove has been officially recognised for actively reducing its ecological footprint by becoming the first mixed-use development in Australia to receive EnviroDevelopment certification.
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Cove’s shrinking footprint
Changes erode state’s advantage
JUST like State of Origin, Queensland is set to lose its competitive advantage over NSW when it comes to housing after this week’s State Government changes to stamp duty, according to one agent.
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Changes erode state’s advantage
GPT deal falls through
Mining magnate Nathan Tinkler is believed to have pulled out of a $600 million deal with developer GPT Group to redevelop a site in central Newcastle.

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GPT deal falls through
On-site power a winner
GENERATING electricity using small gas-powered plants can cut bills and reduce greenhouse emissions.

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On-site power a winner
House prices prove nay-sayers wrong
THE numbers indicate a stabilising of the downward trend in our biggest cities.

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House prices prove nay-sayers wrong
Home in on the right design
FINDING a suitable architect is the difficult but essential first step for many intent on designing a new home or renovating.

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Home in on the right design
Units stack up as house sales drag the chain
DESPITE the residential market being flat as a tack, units are still performing better than houses.

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Units stack up as house sales drag the chain
How to buy property in a falling market
Residential property buyers, especially first time buyers, are getting mixed messages at the moment. On the one hand, property spruikers, estate agents and those with an interest in promoting and selling property are talking the market up.
On the other hand, market analysis provided by independent property research companies show prices have fallen in all the major markets which is likely to continue into the immediate future. In fact, some pundits predict that prices could fall by as much as 10% over the next twelve months.
It’s a buyers’ market
Historically high stock levels, consistently low auction clearance rates (rates which are below the levels needed for a balanced market), the prospect of higher borrowing costs and a drop in home loan approvals are among a number of key indicators that has the property pendulum clearly swinging in favour of the buyer.
For this reason buyers are being encouraged to enter the market because, it is argued, their negotiating position is the strongest it has been for some time and as a result, they may be able to pick up a bargain, particularly from sellers who have to sell. While this may be true in theory, in practice recent price falls have not been sufficient to effectively mitigate chronic affordability issues. Add to this the risk that post-purchase prices could fall even further it means buying conditions are not really as favourable as some would have us believe they are.
Buyer beware
Let’s explore the impact of falling house prices a little further and assume you’ve bought a $400,000 property by contributing $40,000 of your own money and have borrowed the rest. This means you’ve borrowed at a 90% loan-to-value ratio and have 10% equity. Let’s now look at how your equity would be affected if prices dropped by varying amounts over a twelve month period:
As the table above illustrates it takes only a 5% reduction in property values to wipe out half your equity while a 10% reduction would wipe out everything. Anything above 10% and you’re in negative equity territory (Remember during the first twelve to eighteen months of a principal and interest loan the principal balance reduces only marginally).
So if you’re looking to buy and you’re worried about falling prices, the scenario we’ve looked at above is not a particularly appealing one, at least over the short term. So the question becomes, is it better to buy now, or to wait?
Is now is a good time to buy?
One of the main arguments for buying now is that residential property should be viewed as a long term investment and that while prices can and do fluctuate, history has shown that over the longer term they increase. In fact, historically they double every seven to ten years or so. So if you can get a good price now, even though there’s a risk that prices may fall, in the longer term you’ll still be ahead because when the inevitable price recovery occurs you’ll recoup (usually quickly as demand picks up) any short term losses. And don’t forget, a loss is only a loss if it’s realised. So if your property does go down in value in the short term, it’s only a paper loss unless and until you sell.
Aligned to this is that if you wait and the expected loss doesn’t materialise but in fact prices start edging up, you would have forgone the benefits of capital growth. This could hurt you in a number of ways. Firstly, you could end up paying more tomorrow than you would today. Secondly, and consequently, you may need to put up a bigger deposit and borrow more, which will cost you in time and money (i.e. higher borrowing costs) and you may even, ironically, be priced out of the market if prices really take off. And finally, you may miss out on wealth creation through your property’s capital appreciation.
Another reason to buy now is less competition. With fewer active buyers and more housing stock on the market you may find yourself in the enviable position of being spoiled for choice as well as having the upper hand as far as negotiations are concerned. And we’re not talking just about price, but also things like the settlement period (e.g. it could be longer or shorter), deposit requirements, repairs and maintenance (i.e. getting the owner to fix problems and faults) and the inclusion of items that may not otherwise have been part of the sale (like furnishings and fittings and outside items like plants etc).
Is it’s better to wait?
Of course while there are benefits in buying now there are also some advantages in waiting. Chief among these of course is the possibility that if you wait a bit longer you might get the property you want at a cheaper price, especially if the property has failed to sell at auction and/or the property has been on the market for some time. A lower price may mean the difference between being a home owner and being a renter.
A lower price may also help improve affordability and save you money through lower borrowing (i.e. interest) costs. In addition, as prices drop, so to does the loan-to-value ratio because your deposit makes up a larger proportion of the purchase price. This will help you reduce the amount of lenders’ mortgage insurance you have to pay, or even help you avoid it altogether.
Finally, by waiting, it not only enables you to save a bigger deposit and shore up your finances, but gives you more time to consider market direction, giving you greater opportunity to assess the likelihood of further price falls or whether the bottom has been reached and the market is about to turn upwards.
The do’s and don’t of buying in a falling property market
If you’re thinking about buying in a falling market, here are some do’s and dont’s to consider:
- Do research the market and in particular the areas you are thinking of buying into. And don’t forget to assess how individual property types, as well as suburbs are moving. Some locations and property types are performing better than others.
- Do negotiate hard. Be patient. Use your research to support and justify the price you have offered.
- Do look to add value. This is one of the best ways to benefit from a falling market. Less popular or run-down properties can be bought at a considerable discount and once updated or renovated can provide significant capital gains often above the level achieved in the market generally. But don’t forget the old adage Location Location Location.
- Do contribute as big a deposit as you can. It’s a security against falling prices and in case you get into financial difficulties.
- Don’t buy just because you believe you can snap up a bargain. Remember there’s no guarantees and, especially if you’re buying to invest, your focus needs be on the medium to long term. If you’re investing, it’s risky to expect quick, short term gains – this is a gamble and should be avoided unless you have money to lose.
- Don’t buy if you can’t afford it. For instance, if your limit is $500,000 and a property you wanted but couldn’t previously afford was originally marketed for $575,000 but is now being offered at $525,000, you’d still be buying above your limit if you tried to purchase at that price, even with a $50,000 discount. Always stick to your budget no matter what the market conditions.
- Don’t borrow at a very high loan-to-value ratio. If prices drop your initial equity can quickly disappear (as we discovered earlier). You should always aim for at least a 10% deposit but 20% is better.
- Don’t buy before you sell. If you are relying on the proceeds of sale from an existing property make sure you know exactly how much this property will contribute towards your new one – remember buyers of your property will be trying to get your price down as low as possible, just like you are with the property you’re want to purchase.
Follow Peter on Twitter at http://twitter.com/pete_boehm/
Peter Boehm’s first book The Great Australian Dream: A Guide to Buying Your First Home is now available from all good bookstores and online. It discusses the numerous challenges Australians face in entering the property market and provides straightforward advice, hints and tips on
Locating and Financing Real Estate Deals
On the contrary, so many newcomers to the real estate game often end up failing before they even get off to a good start. In fact, a large number of new real estate investors find themselves walking away with their head hung low on their first deal.
Hedge funds back Moss to run Charter
A TRIO of hedge funds are proposing that the Bill Moss-founded Moss Capital become the new manager of the Charter Hall Office REIT.

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Hedge funds back Moss to run Charter
Tamawood downgrade guidance to $7m
Tamawood downgrade guidance to $7m…
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Tamawood downgrade guidance to $7m
Becton Property resolutions approved
Becton Property resolutions approved… 17 Jun 2011 10:09 AM
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Becton Property resolutions approved
Buying a house next to public transport, dodgy builders and strangers sleeping on your couch: This Week’s Picks.
This week we read about the importance of being close to public transport for homebuyers, how unlicensed builders can potentially do more damage than good and learned of a new website that that matches bedrooms with bodies: This Week’s Picks
Southport Depot site secured
GOLD Coast City Council has bought a 5.4ha Southport parcel as the site of a future Southport Depot.
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Southport Depot site secured
Week one in a million
MORE than $1 million worth of factory units at Biggera Waters has been sold in one week by Ray White Commercial Runaway Bay.
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Week one in a million
Receivers close in on Quinlivan titles
GOLD Coast property industry figure Dudley Quinlivan’s woes have deepened, with receivers moving on another of his properties.
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Receivers close in on Quinlivan titles
US data offers hope for stronger recovery
Jobless claims fall; housing starts, permits gain.
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US data offers hope for stronger recovery
No high-rises for burleigh
HIGH-RISES will be kept out of the Burleigh central business district as it goes through a long-awaited redevelopment phase.

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No high-rises for burleigh
Insurance premiums soar 300 per cent
INSURANCE premiums for homes in flood zones have jumped more than 300 per cent, with companies warning of more hikes to come.

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Insurance premiums soar 300 per cent
Five Tips on How to Teach Kids to Respect Money
YEARS after finishing school, many of us would look back and wonder what real-life value some of the lessons we were taught actually gave us.
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Five Tips on How to Teach Kids to Respect Money
Growthpoint has 99% of Rabinov Property Trust
Growthpoint has 99% of Rabinov Property Trust…
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Growthpoint has 99% of Rabinov Property Trust
Coast unit prices holding steady
UNIT prices on the Gold Coast have fallen just 2.7 per cent since the property market peaked in early 2008, according to research released yesterday by RP Data.

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Coast unit prices holding steady
Australand Property acquires master planned residential site in Sydney
Australand Property acquires master planned residential site in Sydney… 15 Jun 2011 17:26 PM
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Australand Property acquires master planned residential site in Sydney
Westfield’s Lowy set for full recovery
WESTFIELD Group co-founder Frank Lowy is in hospital receiving treatment for an inflamed bile duct, but is expected to make a full recovery.

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Westfield’s Lowy set for full recovery
Multi-tiered property marketing contributes to price drops and rising mortgage arrears rates
Multi-tiered property marketing is the ‘elephant in the room’ and a major contributing factor to Queensland’s recent ranking as the number one most vulnerable state to mortgage stress, according to WBP Property Valuers.
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Multi-tiered property marketing contributes to price drops and rising mortgage arrears rates
Now is the moment for cashed-up Sydney investors
Sydney’s housing shortage combined with interest rate stability, increased immigration and vacancy rates below one per cent will continue to strengthen Sydney property investments, according to Angus Raine of Raine and Horne.
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Now is the moment for cashed-up Sydney investors
Grazing at Malmsbury
KALLUMALLY West has served as an excellent grazing property for its owners for the past 15 years.
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Grazing at Malmsbury
Stunning home at Leopold
DAVID and Barbara Ricardo moved to Qualcryst 28 years ago from Geelong.
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Stunning home at Leopold
Mortgage stress grips nation
QUEENSLAND makes history as Australia’s worst state for mortgage defaults, with two per cent of holders in arrears.

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Mortgage stress grips nation
Natural disasters to hit premiums
AUSTRALIA’S biggest insurance companies are lifting premiums as they react to a succession of natural disasters.

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Natural disasters to hit premiums
State leads field in mortgage defaults
QUEENSLAND has made history as Australia’s worst state for home loan defaults, with 2 per cent of mortgage holders in arrears.

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State leads field in mortgage defaults
SkyCity to fund major NZ convention centre
Casino operator preferred developer; approval pending. 14 Jun 2011 4:56 PM
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SkyCity to fund major NZ convention centre
SkyCity to fund major NZ convention centre
Casino operator preferred developer; approval pending. 14 Jun 2011 4:56 PM
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SkyCity to fund major NZ convention centre
Finding Private Investors to Fund Your Real Estate Investments
If you are considering getting started in the real estate market with a project of your own, but you are low on funds, then you need to know how to find the right private investor to fund your project.
Some signs of life in the Australian property market
Despite all the doom and gloom in the media, the latest data from the ABS reveals some sign of life in Victorian home loan activity, which may be an indication that the Victorian property market is finally stabilizing. Victorian seasonally adjusted owner-occupied home loans increased by 4.1 per cent in April compared with the figures for March. Seasonally adjusted figures for the year thus far, show a slightly higher (1.8%) number of home loans than for the same period during 2010.
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Some signs of life in the Australian property market

