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P U L S E
F E B R U A R Y
M A R K E T
C21
PUBLISHER Century 21 Australia Pty Ltd
CONTRIBUTORS Chris Gray Tim Lawless Bradley Beer Laura Barry Connectnow
EDITORIAL ENQUIRIES Century 21 Australia (02) 8295 0600
ADVERTISING ENQUIRIES Century 21 Australia (02) 8295 0600
WELCOME TO THE
FEBRUARY 2021 ISSUE OF
C21 MARKET PULSE
DISCLAIMER We have in preparing this information used our best endeavours to ensure that the information contained therein is true and accurate, but accept no responsibility and disclaim all liability in respect of any errors, inaccuracies or misstatements contained herein. Prospective buyers and sellers should make their own enquiries to verify the information contained herein. All information contained in the CENTURY 21 Australia Pty Ltd website is provided as a convenience to clients. All links to property prices displayed on the website are current at the time of issue, but may change at any time and are subject to availability. For more information on our Privacy Policy please refer to: www.century21.com.au/privacy
C O N T E N T S F E B R U A R Y
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OVERCAPITALISING 02-03
DEPRECIATION TERMS
How to not overcapitalise when planning
The 10 must know depreciation terms for
a major renovation.
residential investors.
Your Empire CEO, Chris Gray
BMT Tax Depreciation, Bradley Beer
PROPERTY MARKET UPDATE
05
SIZE DOESN'T MATTER
Australian housing values reach a new record high.
How to style up a small garden and make it
Corelogic Head of Research, Tim Lawless
feel bigger. Home Beautiful Digital Content Editor, Laura Barry
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OVERCAPITALISING
HOW NOT TO OVERCAPITALISE WHEN PLANNING A MAJOR RENOVATION
B Y C H R I S G R A Y, C E O, YO U R E M P I R E
No matter whether you are planning some renovations on your home or investment property, you really don’t want to spend more than the property will increase in value. It’s called over capitalising and it’s an emotional and rookie mistake that is best avoided. HOW DOES IT HAPPEN? People are attracted to shiny things and often the more they have, the more they think they are adding value. They might choose the bath with the spa jets, the double shower, no handles in the kitchen, fancy lights with built in fans in the lounge and gold leaf on the tap-ware. It’s easy to spend $20k on a kitchen
HOW TO AVOID OVER CAPITALISING FOR FREE?
HOW TO GUARANTEE YOU DON’T OVER CAPITALISE?
The easy and cheapest way to
While the price estimate you
avoid over capitalising is to become
obtain from a real estate agent can
friendly with a local real estate agent
be valuable, I would double check
who really knows the market. Ask for
things before making a
an assessment of what your property
final decision.
is currently worth, then share you plans for your renovation and ask for an estimate as to what the property might be worth afterwards.
Property valuers have much more of an accounting and numbers skill base and so I always run things by them, even though it means paying
Take the difference between the two
$500 - $1,000 or even more for
estimates and that’s the maximum
their time. They will give more
you should be spending for your
detailed analysis with comparable's
upgrade. You should also make an
of what’s recently been sold in the
allowance for contingencies as not
area.
everything always goes to plan and also add something for your time and effort.
Valuers are often conservative in nature as they are hired by the banks to assess what a property could be
Share with the agent the quality and
sold for in a short period of time and
detail of what you’re going to do, but
so if you’re renovation stacks up in
I wouldn’t give them the quotes with
their eyes, chances are it will be even
the dollars in there.
better financially.
and probably even easier to spend $40k if you want all the upgrades, but how much value will it create?
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WHAT WILL HELP YOU NOT OVERCAPITALISE? From my previous dealings with valuers, they love it when you add extra internal living space as that’s often the highest value you can do with land. So adding, extra levels, expanding out the back, changing the layout to add an extra bedroom are all things that can give you the biggest bang for your buck. First impressions also count and those renovation may not cost as much. Cleaning, re-painting, carpeting, sanding floors, doing the gardens will all help that initial
ABOUT THE CONTRIBUTOR
street appeal.
Chris Gray is CEO of Your Empire, a buyers’ agency that buys homes and investments for time-poor people – searching, negotiating, renovating and managing property on their behalf. Chris has spent over 10 years as the host of ‘Your Property Empire’ on Sky News Business channel, where he’s interviewed various heads of property research companies and major industry figures. Chris is a qualified accountant, buyer’s agent and mortgage broker. For more information visit www.yourempire.com.au, www.chrisgray.com.au and follow Chris on
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Twitter: @ChrisGrayEmpire. CENTURY 21
EXPANDING NETWORK
NEW C21 OFFICE OPENS IN BURWOOD NSW An experienced team of real estate professionals have opened an agency in Sydney’s inner west under the Century 21 brand. Directors Eugene Ganke, Jada Vi, Betty Lu, and Ricky Kong are a team that are passionate about property. Together they will operate the Burwood real estate business after having worked together in different roles across independent and franchise agencies. “We are incredibly excited to be partnering with the bold and dynamic Century 21 brand whose vision and values really resonated with us,” said Mr Ganke who has over 10 years of industry experience. “It’s great to have received so
Fellow Director Jada Vi offers six
Century 21 Chairman and Owner
years of real estate experience
Charles Tarbey is pleased to have
said each member of the team
this young team come together
brought a wealth of knowledge
under the C21 brand and is
and skills that complement each
confident of their success.
area of real estate.
“The passion and drive that these
“Our combined focus will be to
individuals have for real estate
ensure that the sale or management
is inspiring. By leveraging the
of our customers most valuable
strength of the C21 brand, training
assets are given the highest priority
and technology, I am sure they will
and utmost care.”
achieve their immediate goal of
The new team believes there is a gap in the local market for
The new office will benefit from
agents which they will aim to fill.
the continued partnership that
They will offer sales, property management and
“Our combined focus will be to ensure that the sale or management of our customers most valuable assets are given the highest priority and utmost care.”
our own agency. We look forward to growing with this global brand for many years to come and leveraging their processes and platforms to deliver a level of service and care that is unmatched”.
Mr Tarbey said.
Cantonese and Mandarin speaking
project marketing
much support to start
being the best agency in Burwood,”
services with an emphasis on delivering exceptional service.
Century 21 have with Bauer Media across the Home Beautiful website and magazine. With the majority of that audience owning or paying off their own home, having ownership in sight or looking to invest, the initiative not only showcases C21 properties
The office
to consumers with an interest in
will be
property, it also generates strong
rounded out by Betty
buyer and seller leads for the network.
Lu who has
experience in real estate and running her own business, and rising star Ricky Kong who in his first year with a major franchise made the Top 100 agents list on GCI.
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The story New C21 office opens in Burwood NSW, first appeared on Elite Agent. Article Link: https://eliteagent.com/new-c21-officeopens-in-burwood-nsw/
P R O P E R T Y M A R K E T U P DAT E
AUSTRALIAN HOUSING VALUES REACH A NEW RECORD HIGH Australian housing values reach a new record high as values continue to rise across every broad region of the country.
BY T I M L AW L E S S , H E A D O F R E S E A R C H , CO R E LO G I C
surged 6.5% higher while capital
“Better housing affordability, an
city housing values are down -0.2%
opportunity for a lifestyle upgrade
over the same time frame.
and lower density housing options
The largest states are seeing regional home values rising at more than three times the pace of their
Housing values continued to rise through the first month of 2021 with CoreLogic’s national home value index up 0.9% over the month. The January movement takes Australian home values to a fresh record high. Housing values have surpassed
capital city counterparts. Home
becoming increasingly evident is
rose 1.6% and 1.5% respectively
the out performance of houses over
in January compared with a 0.4%
units. At a national level, house
increase in home values across
values have risen by 3.5% over the
Melbourne and Sydney.
past six months while unit values
director, Tim Lawless, the
previous October 2017 peak.
divergence between metro and
ranging from a 2.3% surge across Darwin to a relatively mild 0.4% rise in Sydney and Melbourne. Continuing a trend that became evident early in the pandemic, regional housing values rose at more than twice the pace of the capital city markets. CoreLogic’s combined regionals index was up 1.6% over the month, while capital city values were 0.7% higher. Since the onset of COVID-19 in March last year, regional housing values have
remote working arrangements.” Another broad trend that is
the index is 0.7% higher than the
housing values over the month,
with the new found popularity of
and Regional New South Wales
According to CoreLogic’s research
of-state region recorded a rise in
contributing to this trend, along
values across Regional Victoria
pre-COVID levels by 1.0%, and
Every capital city and broad rest-
are other factors that might be
regional housing demand in New
are unchanged. More recently, the past three months has seen every capital city record a stronger result for houses over units.
South Wales and Victoria is more
“Demand for units has diminished
substantial than in other states.
through COVID-19 amidst record
“Internal migration data shows
low levels of investor participation
more people are leaving Sydney
and changing living preferences.
and Melbourne for regional areas,
At the same time supply levels
resulting in a transition of activity
are heightened in some precincts.
from the metro regions to the
While demand and supply remain
outer fringe and regional markets.
imbalanced we are likely to see
This demographic trend is further
units continue to under perform
compounded by the demand shock
relative to detached housing
of stalled overseas migration. As
markets,” Mr Lawless said.
Melbourne and Sydney historically receive the vast majority of overseas migrants, these metro areas have been the hardest hit by this demand shock.”
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Click here to read the full article
D E P R E C I AT I O N T E R M S
THE 10 MUST KNOW DEPRECIATION TERMS FOR RESIDENTIAL INVESTORS You don’t need to be a depreciation expert but understanding some of the key concepts surrounding this complex area of taxation can help your ongoing investment strategy.
BY BRADLEY BEER, B M T TA X D E P R E C I AT I O N
2. PLANT AND EQUIPMENT This category of depreciation refers to the easily removable or mechanical fixtures and fittings in a property. Floor coverings, furniture and air-conditioning units are some examples of plant and equipment assets. Plant and equipment assets are depreciated under division 40.
1. CAPITAL WORKS DEDUCTION
Legislation changes mean that
This is the depreciation deduction
some owners of second-hand
you can claim on the structural component of the building and any fixed assets. Some common examples include walls, doors, roofing, sinks and built-in kitchen
properties can’t claim depreciation on previously used plant and
September 1987. But if a property is
and equipment depreciation is under this method. The deduction for each year is a percentage of the cost, resulting in a more even claim per financial year.
6. LOW-VALUE POOL You can place plant and equipment
3. EFFECTIVE LIFE
pool. Once allocated to the pool,
rates are calculated based on their
construction commenced after 15
The second way to calculate plant
less than $1,000 in a low-value
Capital works deductions can be
on any residential property where
5. PRIME COST METHOD
assets that cost or are valued at
Plant and equipment depreciation
of 2.5 per cent for up to forty years
asset’s depreciable balance.
equipment assets.
cabinetry.
claimed under division 43 at a rate
calculated as a percentage of the
effective lives. The Australian Taxation Office sets the relevant
the asset is depreciated at an accelerated rate of 18.75 per cent in the first year and 37.5 per cent for each following year.
effective life of an asset.
7. QUANTITY SURVEYOR
4. DIMINISHING VALE METHOD
This is a professional specialising
older than this and has undergone
This is just one of the two methods
a structural renovation, such as
of calculating depreciation for plant
retiling a kitchen, some capital
and equipment assets. When this
works deductions will be available.
method is chosen, the deduction is C21 MARKET PULSE
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in building measurement and estimating construction costs. Under Tax Ruling 97/25, they are the few professionals that are
qualified to accurately calculate
just some examples of cosmetic
construction costs for depreciation
renovations. They are usually
purposes.
visual in nature and are a more cost-effective option to structural
8. SUBSTANTIAL RENOVATION A substantial renovation differs from a cosmetic renovation as this
ABOUT THE CONTRIBUTOR
renovations.
10. TAX DEPRECIATION SCHEDULE
is where all, or substantially all, of
This is a schedule that lasts the
a building is removed or replaced.
lifetime of the property and
When a property is substantially
specifies all available depreciation
renovated, previously used
deductions of a building’s structure
plant and equipment assets are
and its assets. The schedule fee is
no longer affected by 2017
100 per cent tax deductible.
legislation changes.
Article provided by BMT Tax Depreciation. Bradley Beer (B. Con. Mgt, AAIQS, MRICS, AVAA) is the Chief Executive Officer of BMT Tax Depreciation. Please contact 1300 728 726 or visit www.bmtqs.com.au for an Australia-wide service.
For over twenty years, BMT Tax Depreciation has been preparing tax depreciation schedules for investors across Australia. On average, BMT find almost $9,000 in first full financial year deductions and always strive to find the maximum deductions
9. COSMETIC RENOVATION
for their clients. To learn more about BMT and the
Painting internal walls, replacing
services they offer, Request a Quote or call the
floor coverings and light fittings are
team on 1300 728 726.
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S I Z E D O E S N ' T M AT T E R
HOW TO STYLE UP A SMALL GARDEN AND MAKE IT FEEL BIGGER
B Y L A U R A B A R R Y,
D I G I TA L C O N T E N T E D I TO R , H O M E B E AU T I F U L
Regardless whether you rent or own your home, most people are aware that backyards aren’t the sprawling picturesque gardens of the past. Instead, most plots of land are almost entirely filled by the house itself, leaving a small green patch to call your own.
2. CLUSTER YOUR POTS “Depending upon the size of the balcony, courtyard or garden,
“When selecting plants for smaller
clustering pots together can soften
spaces, how they are planted is
hard surfaces, be used to develop
equally as important for space
varying styles of plant palettes
conservation and visual effect.
and offer some screening for
Layering lots of plants in pots
privacy if required.”
creates high interest and a visual illusion of depth. Use succulents
3. USE FURNITURE AND LIGHTING WISELY “With the correct proportions,
Lyndall Keating of Garden Society
functional furniture, stylish privacy
is one of Sydney's leading garden
screens and clever lighting can
designers and horticulturists. She
make even the smallest of outdoor
firmly believes that every garden can
spaces can become an urban oasis.”
be made beautiful, regardless of the
“When designing for a small space,
available space. These are her top tips for styling your small garden so that it feels bigger.
1. GROW VERTICALLY
5. WHICH PLANTS TO CHOOSE AND HOW TO PLANT THEM
in layered pots or in a lush vertical garden is the perfect easy-care solution. Mixed herb bowls offer an attractive and functional element to all smaller spaces.”
choose furniture which gives the illusion of more space. Selecting a thinner frame in seating or smaller BBQ can have a big impact.”
ABOUT THE CONTRIBUTOR Home Beautiful is Australia’s fastest growing homemaker brand. With beautiful
“A green wall will provide a
4. LAYER UP
original photography, gorgeous styled
powerful punch of greenery without
“Using layers can give the illusion of
Home Beautiful is simply one of the most
compromising too much valuable space. They can be easy to maintain with carefully selected plants.”
stories and signature inspirational how-tos,
depth to a small space, try adding an outdoor rug or add a statement plant that is visually interesting.” C21 MARKET PULSE
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loved, most recognised and commercially successful brands in Australia. Article Link: https://www.homebeautiful.com.au/how-tostyle-up-a-small-garden
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