J U N E
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P U L S E
C21
PUBLISHER Century 21 Australia Pty Ltd
CONTRIBUTORS Kathryn Madden Elite Agent Tim Lawless Chris Gray Bradley Beer On The Move
EDITORIAL ENQUIRIES Century 21 Australia (02) 8295 0600
ADVERTISING ENQUIRIES Century 21 Australia
WELCOME TO THE
JUNE 2019 ISSUE OF
C21 MARKET PULSE
(02) 8295 0600
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 N E
PURCHASING PROPERTY
02-03
2 0 1 9
CLAIMING DEPRECIATION
The number one thing you should do before
The depreciation difference.
purchasing a property.
BMT Tax Depreciation, Bradley Beer
08-09
Home Beautiful Magazine Editor, Kathryn Madden
MOVE SMARTER RELENTLESS AGENTS
04
Real Estate Business Journalist, Tim Neary
ENHANCING SPACE 05
Pace of declining home values continues in May.
06-07
A selection of properties for sale with Century 21 from right around Australia.
The tide has turned. Your Empire CEO, Chris Gray
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Making the most of a small backyard.
OPEN HOMES
Corelogic Head of Research, Tim Lawless
THE PROPERTY TIDE
Benefits of downsizing to a smaller home. On The Move
Top performers recognised at the C21 Convention.
HOUSING CORRECTION
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01
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13-20
PURCHASING PROPERTY
The number one thing you should do before purchasing a property BY K AT H R Y N M A D D E N ,
EDITOR, HOME BEAUTIFUL MAGAZINE
Found your dream abode? Tick. Got your mortgage pre-approval? Sorted. Ready to make a bid and move straight in? Not just yet.
1. IT WILL PROTECT AGAINST (UNWANTED) SURPRISES DOWN THE TRACK
recommendations). After that, a
We’ve all heard the story about
you live in an area where pests are a
the couple who scored a charming
common problem.
pest inspection is advised to ensure creepy crawlies aren’t sharing the residence with you – particularly if
inner-city terrace for a steal, only to move in and discover rising damp or
Before you sign on the dotted line,
termites. A pre-purchase building
it’s imperative to book in a building
inspection will serve as your safety
inspection and get the 411 on the
net, unearthing issues pertaining to
property. Akin to a roadworthy for
maintenance, electricals, structure,
a car, it could uncover damage or
drainage, roofing, ventilation and
defects that have been hiding under
more. Always enlist a licensed
the home’s seemingly sparkling
professional to compile the report,
surfaces. Here’s why you should
says Charles Tarbey, Chairman of
never skip this step again…
Century 21 in Australia (if in doubt, turn to your real estate agent for
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2. IT COULD HELP YOU NEGOTIATE A BETTER PRICE Should your report reveal any minor defects (corrosion, for example) or major defects (such as structural issues), but you still have your heart set on the home, take heed. Knowledge is power: armed with evidence, you may be able to negotiate a lower price for the home,
noting that financial compensation is required to fix the problems. The completed report will also help you make informed decisions about what needs fixing immediately, and what you’ll need to budget for in the future. On that note, the cost of an inspection varies from state to state but generally comprises three figures, which seems a small price to pay in the scheme of hundreds of thousands of dollars.
3. SAFETY SHOULD ALWAYS COME FIRST Sure, a building inspection might save you money on maintenance long-term, but more importantly, it could save lives. The professional carrying out the review will alert you to any safety hazards in the home: inadequate pool fencing, missing balustrade, absent smoke alarms, the presence of asbestos, to name a few. The report will also check the build is compliant with current and local regulations – think stair heights and window openings – which could defend against legal issues down the track.
ABOUT THE CONTRIBUTOR Home Beautiful is Australia’s fastest growing homemaker brand. With beautiful original photography, gorgeous styled stories and signature inspirational how-tos, Home Beautiful is simply one of the most loved, most recognised and commercially successful brands in Australia. Article Link: https://www.homebeautiful.com.au/thenumber-one-thing-you-should-do-beforepurchasing-a-property
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RELENTLESS AGENTS
TOP PERFORMERS RECOGNISED AT THE C21 CONVENTION
BY ELITE AGENT
At its annual Australasian Convention, Century 21 inducted Nickolas Dilles to its Hall of Fame and recognised top performers from within its network.. Hamilton Island was the location of
Mr Dilles is the principal of Century
in Scarborough, QLD, who was
the 2019 Century 21 Convention,
21 Southwest Fairfield NSW, and
awarded the Sam Raiti Perpetual
which saw attendees from across
started in the real estate industry in
Shield for her dedication to the C21
the business come together for
1973. Recognising that he had the
culture and values.
three days of motivation, training,
Century 21 Aaron Moon Realty,
and networking.
operating in Townsville, QLD,
A key part of the convention was to
took out the 2100 Cup, which
recognise the top sales performers
acknowledges the office that
and leading contributors to brand,
embraces C21 systems and tools
culture and community over the
while also playing a significant
preceding 12 months.
role in community leadership.
“I am extremely proud of the
“Recognising people for the hard
contributions our agents across
work they put in each day is very
the country make to their
important to us and I congratulate
communities each and every day,”
all the award winners that were
Century 21 Australasia Owner and
honoured at our convention for
Chairman, Charles Tarbey said.
their achievements,” Mr Tarbey said.
In the case of Nickolas Dilles, it was his commitment over a lifetime in the industry that led to his induction into the Century 21 Hall of Fame. “Nickolas joins a select list of individuals who have been inducted into the C21 Hall of Fame for their ongoing service and commitment to our brand and industry,” Mr Tarbey said.
passion and talent to succeed, he opened his first office seven years later. In 1995, Mr Dilles joined the Century 21 network and has been a role model to other real estate professionals ever since. Two other recipients received prestigious awards at the convention including Maddie Dolan, principal from Century 21
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The story Top sales performers recognised at the C21 Convention, first appeared in Elite Agent magazine. Article Link: https://eliteagent.com/top-salesperformers-recognised-at-the-c21convention/
HOUSING CORRECTION
PACE OF DECLINING HOME VALUES CONTINUES IN MAY Although at a broad level dwelling values are still trending lower across the regions of Australia, the pace of declines eased further in May, continuing a trend that has been evident since the beginning of 2019.
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
rolling quarterly rate of change into
stronger, the improved performance
negative territory for the first time
at auction aligns with the easing
since early 2016, and with Canberra
rate of decline.”
values 0.2% lower over the month, the quarterly rate of growth remains only slightly in positive territory (+0.2%).
Since peaking in October 2017, national dwelling values have reduced by 8.2%, with values across the combined capitals index down
While the pace of value falls
10.1% while regional values have
eased across some cities, the
been more resilient, falling by 3.0%
Australian housing market remains
since peaking. Larger capital city
in a geographically broad-based
falls have been recorded in Darwin
downturn. Adelaide (+0.2%) was the
(-29.5%) and Perth (-19.2%), as well
only city to avoid a slip in housing
as regional WA (-32.5%) where
values over the month and in ‘rest-
the mining downturn has led to
of-state’ areas, South Australia,
persistently weak economic and
CoreLogic head of research Tim
Tasmania and Northern Territory
demographic conditions. These
Lawless said, “This improvement is
were the only regions in which
regions now represent some of the
primarily being driven by a slower
values rose in May. In fact, Regional
most affordable housing markets
rate of decline in Sydney and
Tasmania is the only broad region
around the country; a factor which
Melbourne where housing values
across the country where housing
explains the high proportion of first
were previously falling at the fastest
values remain at record highs.
home buyer participation in these
Nationally, dwelling values were down 0.4% in May, which was the smallest month-on-month decline since May 2018.
rate of any capital city. Sydney values were 0.5% lower over the month while Melbourne values were 0.3% lower; the smallest decline in values across both cities since March last year.
The slower rate of decline is also visible in higher auction clearance rates through the month. The last week of May saw Sydney clearance rates break the 60% mark for the first time in a year, while Melbourne
“In other cities, where housing
clearance rates have held around
market conditions have generally
60% over three of the past six
been more resilient to a downturn,
weeks.
the trend is opposite.”
Tim Lawless said, “Although
Hobart values have tracked lower
clearance rates remain low relative
for two months running, taking the
to several years ago when housing market conditions were much
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areas. The last time values were this low in Darwin was March 2017, in Perth values were previously this low in April 2006 and values haven’t been this low across regional WA since July 2005.
THE PROPERTY TIDE
THE TIDE HAS TURNED B Y C H R I S G R A Y, C E O, YO U R E M P I R E
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.
3) Banks are saying that the high
Whilst everyone breathes a sigh
P&I interest rate serviceability
of relief, I think it’s worth taking a
figures are too high.
pause, thinking about what’s just
4) The election is upon us and
whatever way the vote swings,
at least it will be over.
5) Labor has been blasted about
their proposed negative gearing
changes. This month I think the title should be ‘The tide has turned’ as all of those things have come
Last month in this column I shared
true. Labor’s election was lost,
my thoughts in an article titled ‘The
the RBA has dropped rates and
tide could be turning’ and my main
APRA has changed the minimum
points were:
serviceability rates.
1) The Royal Banking Commission
Consumer sentiment is up, and
everyone is talking a lot more
seems to have been forgotten
about. 2) The RBA is talking about
positively about the property market.
interest rates dropping.
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happened and making a note of how you will act when something similar happens in the future. Logic says that the last 12-18 months have been good buying time, no matter whether you’ve been looking at a home or an investment property. Buyer numbers were down, confidence was low and so that should be the best time to buy, when there’s no competition.
“
Consumer sentiment is up, and everyone is talking a lot more positively about the property market. – Chris Gray
But rather than buying, most people
In my experience of buying homes
sat on the side lines and waited.
and investments, I wouldn’t be
They wanted to wait till the bottom
putting my plans on hold because
of the market (which no one could
of an election, an interest rate
or can ever predict). The election
change, changes to negative
is always a classic time for fence
gearing or someone forecasting
ABOUT THE CONTRIBUTOR
sitting and the yearly nervousness
something else. Buying property
about removing negative gearing
should be a 5, 10, 20, 30+ year
Chris Gray is CEO of Your Empire, a buyers’
was the icing on the cake.
transaction and these ‘major’
time-poor people – searching, negotiating,
changes total are ‘little blips’ on the
renovating and managing property on their
The result was nothing happened. So now there’s more confidence,
long-term horizon.
agency that buys homes and investments for
behalf. Chris has spent over 10 years as the host of ‘Your Property Empire’ on Sky News Business channel, where he’s interviewed
more buyers entering the market,
Hindsight is an amazing thing,
more competition and the chances
but you need to learn from it. If
are prices will slow, flatten and
you would have done something
then soon rise and then trying to
different this month since the
find your ideal property at the right
changes, then when it comes
www.yourempire.com.au,
price will get harder and harder.
to next time, maybe make that
www.chrisgray.com.au and follow Chris on
Then the comments will be ‘if only
decision before the rest of the herd.
I had got in sooner’.
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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
Twitter: @ChrisGrayEmpire.
C L A I M I N G D E P R E C I AT I O N
THE DEPRECIATION DIFFERENCE BY BRADLEY BEER, B M T TA X D E P R E C I AT I O N
Owners of incomeproducing properties are eligible for significant taxation benefits and yet some of the perks continue to fly under the radar.
AS A BUILDING GETS OLDER, ITEMS WEAR OUT – THEY DEPRECIATE
property investors are failing to take full advantage of property depreciation and are missing out on thousands of dollars in their pockets. In the 2017/2018 financial year, BMT Tax Depreciation found residential property investors an average first year deduction of $8,212. One of the reasons property depreciation is often missed is because it’s a non-cash deduction. This means
An investor purchased a brand-new
The Australian Taxation Office
two bedroom unit for $420,000.
allows property owners to claim this
The property is rented for $490 per
depreciation as a tax deduction.
week or a total income of $25,480
Depreciation falls into two
per annum.
categories: Research shows 80 per cent of
DEPRECIATION: AN INVESTOR PROFILE
The estimated expenses for the
• A capital works allowance
property including interest, rates
(division 43) for the structure of
and management fees total $32,000
the building and any fixed assets
per annum.
(such as walls, floors, roofs, tiling
and cabinetry)
will depreciate by around $11,500 in
• Plant and equipment deductions*
(division 40) for eligible
removable and mechanical assets
(such as ovens, carpets, curtains
and blinds and hot water
systems).
an investor doesn’t need to spend
The following example shows how
money to be eligible to claim it.
depreciation claims are calculated, the difference these claims can make and how claiming these deductions helps improve your cash flow.
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A new two bedroom unit typically
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the first full financial year. The following scenario shows the investor’s cash flow with and without depreciation.
(Continued on next page)
PROPERTY PURCHASED FOR $420,000 Scenario without depreciation claim
Scenario with depreciation claim of $11,500
Annual expenses
$32,000 Annual expenses
$32,000
Annual income ($490 x 52 weeks)
$25,480 Annual income ($490 x 52 weeks)
$25,480
Taxation loss (income – expenses)
– $6,520 Pre tax cash flow (income – expenses)
– $6,520
Total taxation loss
– $6,520
Tax refund (total tax loss x tax rate of 37%) Annual costs of the investment property
$2,412 Tax refund (total tax loss x tax rate of 37%) – $4,108
(pre tax cash flow + refund)
Total taxation loss (pre tax cash flow and depreciation claim of $11,500)
– $18,020 $6,667
Annual cash flow of the investment property (pre tax cash flow + refund)
– $79 Weekly cash flow of the investment property
Cash outlay per week
$147 $3
Depreciation difference = $82 per week The depreciation estimates in this example were calculated using the diminishing value method of depreciation. They are based on a brand-new unit and therefore the owner is eligible to claim depreciation for both capital works and plant and equipment.
In the above example, the investor uses property depreciation to go from a negative cash flow scenario, paying $79 per week, to a positive cash flow scenario. By claiming depreciation this investor will save $4,255 for the year. * Under new legislation outlined in the Treasury Laws Amendment (Housing Tax
contracts on a second-hand residential property after 7:30pm on 9th May 2017 will no longer be able to claim depreciation on previously used plant and equipment assets. Investors can claim deductions on plant and equipment assets they purchase and directly incur the expense for. Investors
ABOUT THE CONTRIBUTOR
who purchased prior to this date and those
Article provided by BMT Tax Depreciation. Bradley
who purchase a brand-new property will still be able to claim depreciation as they were previously.
Beer (B. Con. Mgt, AAIQS, MRICS, AVAA) is the Chief Executive Officer of BMT Tax Depreciation. Please contact 1300 728 726 or visit
Integrity) Bill 2017 passed by Parliament on
www.bmtqs.com.au for an Australia-wide service.
15th November 2017, investors who exchange
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MOVE SMARTER
BENEFITS OF DOWNSIZING TO A SMALLER HOME Bigger homes have been a huge (excuse the pun) trend over the past couple of decades, but does bigger mean better? Not at all. There are tons of benefits to living in a smaller space, so whether you’re sitting on the fence when it comes to the decision to downsize or you’re outright against it, here are five reasons why you should bite the bullet.
1. SAVE MONEY ON IMPULSIVE PURCHASES Speaking from experience, at On The Move, we can guarantee you will be less likely to splash out on impulsive (and pointless) homeware purchases when you’re living in a more compact space. We’ll bet you’ve bought artwork, ornaments and pieces of furniture just to fill a space, right? Well, when you have a smaller home you can invest in the cream of the interior crop and call it a day. It’s quality over quantity!
BY ON THE MOVE
2. LIVE MORE STRESS-FREE
less space to retreat to and hide
Think of the upkeep involved in
much choice. But also, because
maintaining your home. From
learning to live in a more compact
cleaning to redecorating, it’s a whole
space together is a great opportunity
lot easier when there’s less space.
to bond and become closer.
from them, so really, you won’t have
You’ll find yourself wondering what to do with all your free time. Plus owning more stuff is said to increase
5. YOU CAN TRAVEL MORE
stress because the more you own,
Would you rather have a bigger
the more you have to worry about in
home or a better-quality lifestyle?
terms of theft and damage.
You’ll have more money to travel and leaving your home is less of an
3. SAVE ON ENERGY BILLS
issue when it’s smaller – think of
Bigger homes mean bigger budgets
when you jet off on holiday –
when it comes to energy bills. Larger
security, maintenance, lighting… the
homes require more power to remain
list goes on. With a smaller home,
at a comfortable temperature,
however, you won’t have to worry
and it’s more likely with a bigger
half as much.
everything you need to consider
home you will use more lighting. Downsizing means you’ll be doing your bit for the environment as well as benefiting your bank account.
4. ENJOY QUALITY TIME You end up spending more quality time with those you live with when you’re residing in a more compact abode. Partly because you’ll have
ABOUT THE CONTRIBUTOR On the Move is Australia’s leading service connections specialist providing a one-stop service for electricity, gas, phone, internet, pay TV and insurance. Since 2004 On The Move has partnered with Real Estate agencies and other organisations to give their customers a convenient and seamless move-in, lights-on experience. https://www.onthemove.com.au/
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ENHANCING SPACE
MAKING THE MOST OF A SMALL BACKYARD Many Australians love their backyards, using the space to entertain, play outdoors with the family and to enjoy the enviable Australian climate. Even if your backyard is on the smaller side, it is still possible to create a spacious impression. Here are some simple tips to make a small outdoor area more functional or enhance the space in preparation
backyard into a small area. Work out
so try not to fill your backyard with
what features are important, what
too much furniture. Choose pieces
you will use most and where they
wisely, such as folding chairs or
will best fit.
extendable tables that are stylish as well as functional.
HANGING GARDENS Rather than spreading out, consider spreading gardens up and down your fences and walls. Colourful
When choosing material for items
flowers, vines or even herbs planted
such as pavers, decking or outdoor
in hanging pots or baskets can add
paint, consider embracing lighter
the feel of greenery to your outdoor
colour schemes to create the
areas without taking up too much
impression of a more spacious
valuable room.
area. Sometimes, it may also help to continue indoor colour schemes
for sale.
PRIORITISING FEATURES It is important to carefully plan your space before you dive head first into a renovation. Don’t attempt to cram all the typical features of a
CHOOSING THE RIGHT COLOURS
and decorative styles into the
STREAMLINE YOUR FURNITURE
outdoor area, creating a seamless transition into what feels like one
Avoid choosing large or bulky outdoor furniture and instead opt for a more streamlined look. Clutter should be avoided in a small space,
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large space.
1. CHECK THE WORK STATIONS
double check if there are any new
A house needs the essentials: a
to pay more for a beach view, only
bathroom, kitchen and laundry.
to find that beach view will soon be
However, if you’re visiting multiple
obscured by an apartment building
properties it can be easy to
or shopping centre.
areas of development happening in the suburb, because you don’t want
skip over a careful analysis of those rooms. If you’re looking at apartments, then the laundry can
4. DO YOUR RESEARCH
be particularly illusive. Make sure
If you plan to buy an apartment
to check the exact location of the
be sure to get a strata inspection
laundry, that there’s enough room
report and familiarise yourself
in the kitchen to be functional and
with any levy fees, past, current or
the layout of the bathroom.
future issues, future plans for the building and any maintenance or
2. KEEP THE FUTURE IN MIND
repairs that need to be done. It’s important to know what money you might be expected to cough up.
Although you may just be buying your first property, are you planing to have children? Or planning to get a pet? Do you need a space where you can work from home? Do you need a garden or are you happy with a courtyard or balcony? These are all important questions to keep at the forefront of your mind when viewing a property, because a onebedroom unit with a small balcony might suit your life now, but it isn’t going to cater to a couple with a child and a dog. Try to future-proof your investment so it can grow and adapt as your life changes.
3. SPEND SOME TIME IN THE AREA You don’t want to move into your brand-new home, only to discover it’s under a flight path, the suburb has heavy traffic or is slated for development. Spend some time getting to know the suburb and familiarise yourself with the traffic situation, the noise situation, and if it has facilities such as a doctor, dentist, supermarket and chemist within easy reach. It also pays to
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Moving?
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