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PUBLISHER Century 21 Australia Pty Ltd
CONTRIBUTORS Chris Gray Tim Lawless Bradley Beer On The Move
EDITORIAL ENQUIRIES Century 21 Australia (02) 8295 0600
ADVERTISING ENQUIRIES Century 21 Australia (02) 8295 0600
WELCOME TO THE
JULY 2020 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 J U L Y
PROPERTY PREDICTIONS
02-03
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SPARE ROOM
Will the next property crash come in September?
What to do with the extra room in your house.
Your Empire CEO, Chris Gray
Century 21 Australasia
PROPERTY MARKET UPDATE
05
PETS OVERHEATING
Housing values decline for second month in June as
Safety tips for pets that love heaters.
turnover recovers.
On The Move
Corelogic Head of Research, Tim Lawless
CALCULATING CLAIMS
06
Can property investors claim stamp duty? BMT Tax Depreciation, Bradley Beer
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PROPERTY PREDICTIONS
WILL THE NEXT PROPERTY CRASH COME IN SEPTEMBER? B Y C H R I S G R A Y, C E O, YO U R E M P I R E
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Chris Gray began his property investing journey when he was 22 years old. With only $35,000, he spent the next nine years learning about investing firsthand, and applying that knowledge to his own portfolio now worth over $15m.
stand and get themselves as much
Many homebuyers and investors are
attention as possible with the media
still cashed up, are paying the lowest
lapping it up.
mortgage rates they’ve even seen
The market didn’t crash. Mortgage holidays were given out, many
people have been predicting a major property crash in September when job keeper and the 6 month mortgage holiday comes to an end, but will it happen? They predicted the first major crash back at the start of COVID in March this year. Economists from around the world were saying this is the end, we’ve never seen anything like this before and the property market could crash 20, 30 or even 40% However that didn’t happen. No one knew what was going to happen and so it was either scare mongering or trying to grand
advantage of the situation.
people still had jobs, and most
One of the many reasons that
tenants still paid the rent. Sure
property is such a good holder of
some rents were negotiated
wealth is that the government and
downwards, but so were borrowers
the banks have a massive vested
mortgage rates by the same or
interest in making sure the market
even by larger amounts.
is stable. It’s very hard for them to
When that crash didn’t happen, they For the last few months many
in their lives and they are taking full
then started predicting September as the new date. But many in the industry were sure that if things were going to be that bad, then the government would jump in again with further rescue packages and they have. Those that are in dire need might be able to take advantage of a further 4 month
rescue the whole stock market and all the companies that make it up, but it is a lot easier for them with property. They can’t afford to let the banking system go down with the economy, and so I believe they will do whatever it takes to make sure we’re still fine in September and we’re still fine as we head towards 2021.
mortgage extension and many tenants can potentially get some form of job keeper extension. It's not to say the market isn’t going to fall and were not in for more financial challenges but it’s probably not to be as bad as everyone is predicting.
ABOUT THE CONTRIBUTOR 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 Twitter: @ChrisGrayEmpire.
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P R O P E R T Y M A R K E T U P DAT E
HOUSING VALUES DECLINE FOR SECOND MONTH IN JUNE AS TURNOVER RECOVERS Following a 0.4% decline in May, the CoreLogic Home Value Index recorded a second consecutive month of falls, with the national index down 0.7% in June.
BY T I M L AW L E S S , CO R E LO G I C H E A D O F R E S E A R C H
CoreLogic head of research, Tim
home values were early into
Lawless, said “The downwards
a recovery phase pre-COVID.”
pressure on home values has
Mr Lawless said.
remained mild to-date, with capital city dwelling values falling a cumulative 1.3% over the past two months. A variety of factors have helped to protect home values from more significant
Each of the five largest capital cities
declines, including persistently
recorded a decline in home values
low advertised stock levels and
over the month, ranging from a
significant government stimulus.
drop of 1.1% in Melbourne and Perth
Additionally, low interest rates and
to 0.2% in Adelaide. The indices for
forbearance policies from lenders
Hobart, Canberra and Darwin each
have helped to keep urgent sales
recorded a subtle rise in values over the
off the market, providing further insulation to housing
month. Despite values being down in June, estimates of market activity showed a further
values.”
improvement from the April low. After a (revised) 21.5% surge in sales
values has been fairly mild since April, the longer term outlook remains highly uncertain. “While it is encouraging to see lenders have recently hinted at an extension in their repayment leniency policies, the government stimulus will eventually taper and banks will require borrowers to repay their loans. The longer term outlook for the housing market is largely dependent on how well the economy is tracking when these support measures are removed,”
Recent value
“Despite values being down in June, estimates of market activity showed a further improvement from the April low.”
Although the decline in home
Mr Lawless said.
falls represent an interrupted upswing across most regions, reflected in high annual growth rates. “The twelve month change in
home values remains in positive double digit territory across Sydney (13.3%)
activity through May, CoreLogic’s
and Melbourne (10.2%). The only
estimate of home sales in June was
capitals where values show declines
up a further 29.5%.
on an annual basis are Perth and Darwin, but even across these cities,
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Click here to read the full article
C A L C U L AT I N G C L A I M S
CAN PROPERTY INVESTORS CLAIM STAMP DUTY? BY BRADLEY BEER, B M T TA X D E P R E C I AT I O N
Stamp duty is one of the largest expenses involved in purchasing an investment property, so it’s unsurprising that investors often ask if it’s tax deductible. Stamp duty is a form of tax that state and territory governments charge for certain documents and transactions, including the sale of a property.
can reduce the capital gains
The amount paid in stamp duty
tax (CGT) liability when you sell
positively affects the CGT formula
the property later on. The
by increasing the cost base value.
exemption is when an investment
As a property investor, stamp duty
property is acquired in a territory
can work favourably for you in the
under a crown lease. An example
long term. When you decide to sell
of this is Canberra where stamp
your investment property, stamp
duty is immediately tax deductible
duty forms a part of the cost base
for investors.
and can reduce the amount of
Though for typical investment
CGT payable.
property transactions, capital costs
It’s important to understand
like stamp duty are included in your
how your investment
cost base and can only be used to
circumstances, capital costs
offset CGT. CGT is a tax you pay on
and depreciation claims impact
the profit made from the sale of a
CGT liabilities to help best guide
Each state and territory have
property. Several factors come into
your investment strategy.
different stamp duty calculation
play when paying CGT on the sale
methods so the amount of stamp
of your investment property such
duty charged for a property sold
as discounts, depreciation
in Victoria may be different for
and exemptions.
a similarly priced property in New South Wales. The timeframe of when stamp duty is payable also varies. Unfortunately, property investors can’t claim a tax deduction for stamp duty immediately, though it
The basic formula for calculating CGT is:
ABOUT THE CONTRIBUTOR
(Selling price – transaction
Article provided by BMT Tax Depreciation. Bradley
costs) – (original purchase price
Beer (B. Con. Mgt, AAIQS, MRICS, AVAA) is the Chief
+ associated transaction costs) =
Executive Officer of BMT Tax Depreciation. Please contact 1300 728 726 or visit
capital gain (or loss)
www.bmtqs.com.au for an Australia-wide service.
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SPARE ROOM
WHAT TO DO WITH THE EXTRA ROOM IN YOUR HOUSE What would you do if you had an extra room in your house? Get creative because the possibilities are limitless.
Home Gym Do you love to start your mornings with a good workout, but hate dragging yourself to a crowded gym? If you have some workout machines at home, transform your spare room into a gym. Even if you
Playroom
Library
If you're tired of tripping over your
If you're a bookworm, you've
kids' toys in your nice, fancy living
probably always dreamed of having
room, turn that extra room into
your very own library. Now is your
their own space. Paint the walls with
chance! Install bookshelves from
chalkboard paint so they can write
wall to ceiling, add comfortable,
on the walls, store all of their toys
sophisticated couches, and throw in
in the room, and allow them to play.
cosy area rugs to make a comfy and
They'll love a space of their own,
inviting space. Just imagine relaxing
and you'll love not having a mess all
after a long day in your library with
over the house.
your favourite book, a cup of tea, and candles.
Contemplation Room Ever just need some time alone with
and other inexpensive equipment,
Entertainment Centre
your thoughts? If you find yourself
If you don't have a den or finished
you can turn your unused room into
wanting to escape the craziness
basement, and only a formal living
something useful.
of the day and not knowing
room, you may want to consider
where to go, consider creating a
turning the spare room into an
contemplation room. Decorate it
entertainment centre. Use dark
with comfortable furniture, throw
woods and deep colours, reclining
pillows, and blankets. This creates a
chairs and a sectional couch,
serene space where you can go to
and top it off with a flat-screen
clear your head, meditate, and relax.
television for the perfect movie
just buy some weights, a yoga mat,
theatre feel. It can be a great place to have a movie marathon on a rainy day!
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P E T S OV E R H E AT I N G
SAFETY TIPS FOR PETS THAT LOVE HEATERS Winter is here, we’re starting to pull out the heaters and cleaning out those central heating and air conditioning units. For those of us with pets it also brings the inevitable concern regarding heaters; pets – like their owners – tend to love the warmth that heaters provide. Cats, dogs, and other pets love stretching out and dozing right in front of a heater, and this can be dangerous.
BY ON THE MOVE
GATE OFF THE DANGEROUS DISTANCE TO THE HEATER
Pets overheating are an
Installing a simple gate around the
worse) through the winter. That’s
perimeter of the heater that will
not to say pets shouldn’t enjoy the
force the pet to stay a safe distance
warmth of heaters (or that your
from the heat source itself can be
house needs to be left to freeze
remarkably effective.
over for their safety). Understanding
unfortunately common problem that can cause trips to the vet (or
why the pet is attracted to the
NEVER LEAVE THE PET ALONE IN A ROOM THAT IS HEATED
source of the heat, knowing the
Even if you’re able to prevent your
health of everyone and every animal
pet from being able to physically
in the household this winter.
warning signs to look out for, and taking common-sense precautions will all be enough to protect the
contact the heater, it’s still important that you don’t stop observing for the signs that they might be overheating or struggling.
The big question is what you can do to help keep the pet safe and comfortable.
MAKE THE BEDDING SNUGGLY ABOUT THE CONTRIBUTOR
Remember that pets like to feel like
On the Move is Australia’s leading service connections
they're huddling for warmth, so if
specialist providing a one-stop service for electricity,
the bedding has nice, warm walls to
gas, phone, internet, pay TV and insurance.
snuggle up against, the pet can feel
Since 2004 On The Move has partnered with Real
like they're getting protection while
Estate agencies and other organisations to give
staying warm.
their customers a convenient and seamless move-in, lights-on experience. https://www.onthemove.com.au/
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Pay TV
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