O C T O B E R
M A R K E T
2 0 1 8
P U L S E
C21
PUBLISHER Century 21 Australia Pty Ltd
CONTRIBUTORS Charles Tarbey Tim Neary Tim Lawless Chris Gray Bradley Beer Terri Scheer Landlord Insurance
EDITORIAL ENQUIRIES Century 21 Australia (02) 8295 0600
ADVERTISING ENQUIRIES
WELCOME TO THE
OCTOBER 2018 ISSUE OF
C21 MARKET PULSE
Century 21 Australia (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 O C T O B E R
CHAIRMAN STATEMENT
02-03
2 0 1 8
ALL YOU CAN DEDUCT
Property market price correction continues.
Commonly missed deductions.
Century 21 Chairman, Charles Tarbey
BMT Tax Depreciation, Bradley Beer.
REBRAND REVOLUTION
04
LEASING YOUR PROPERTY
C21 rebrand an evolution, already paying off.
10 tips to get your property leased.
Real Estate Business Journalist, Tim Neary
Terri Scheer Landlord Insurance.
HOUSING CORRECTION
05
Housing correction marks twelve month anniversary.
FRONT FACELIFT Ways to improve the front of your home.
Corelogic Head of Research, Tim Lawless
BUYING OFF-MARKET
06-07
Buying an off-market property Your Empire CEO, Chris Gray.
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CENTURY 21
08-09
10-11
12
C H A I R M A N STAT E ME N T
PROPERTY MARKET PRICE CORRECTION CONTINUES B Y C H A R L E S T A R B E Y,
CHAIRMAN CENTURY 21 AUSTRALASIA
National dwelling values decreased again in September, marking twelve consecutive months of falling values. The result firmly marks the end of the boom in the Australian housing market and what may be a prolonged housing price correction. The correction has largely been
‘markets within markets’ in
driven by Sydney and Melbourne
Australia. Over the last 12 months,
where the vast majority of
Brisbane, Adelaide, Hobart and
Australia’s property value lies.
Canberra, achieved capital gains
Once again, the extent of the
over the period in question. The current price
is being continually exaggerated
correction is
by certain media outlets. As an
a result of
example, while values have dropped
the low-
by 6.1 per cent in Sydney over
interest-rate
the last 12 months, they achieved
environment
remarkable double-digit growth
that the
in many of years preceding this
nation has,
period. While people who bought
and continues
over the last year will certainly not
to, experience.
be overly happy with where values
When the
are, a large pool of owners is still
RBA cut rates to
sitting on significant capital gains.
encourage economic
situation where there remains
During this period, certain parties did everything they could to limit foreign investment even though this inbound capital was driving the large
correction has been overstated and
On top of this, we still see a
they should have in my opinion.
construction
“The current price correction is a result of the low-interest-rate environment that the nation has...”
booms we saw in many markets. As I said at the time, the problem with this approach is that if you are not accommodating
to foreign investors, they may not be there
growth, the Australian market
when you really need them.
witnessed a buying frenzy, with
This scenario appears to be playing
house prices rising much more than
out at present.
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While I do not believe the
quite attractive to me. Property
destination with a strong economy
correction is as bad as many
investment is a long-term game,
and great prospects for the future.
parties are trying to make out, it is
and I suspect there could be many
The housing price correction that
happening and there will be some
long-term winners from savvy
we are seeing will present some
winners from this movement in
investments into these markets.
great buying opportunities for
prices.
those that believe in the future of
Eventually, as typically happens
Australia and the wealth that can
First home buyers may now have
with free markets, prices reach a
many more opportunities to enter
low point where they suddenly
the market than they did in the past.
become extremely attractive to
Prices are more affordable in many
investors and buyers. Where that
markets, and there is likely less
point lies is always tricky to tell, but
competition for properties.
prices will eventually stabilise and
be generated out of its property market.
then recover.
Property prices in many areas of Western Australia, South
In the end, I firmly believe that
Australia and even Brisbane look
Australia is a wonderful investment
MEDIAN PROPERTY PRICE 3 rd Q U A R T E R 2 0 1 8 SYDNEY
$790,000 MELBOURNE CANBERRA
$640,000
$600,000 BRISBANE
$490,000
ADELAIDE
$440,500
DARWIN HOBART
$470,000
PERTH
$455,000
$417,000
Median price is calculated by the price of a property that falls in the middle of the total number of properties sold over the proceeding period (past quarter). Source: Realestate.com.au Australian Property Market Report – October 2018.
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REBRAND REVOLUTION
C21 REBRAND AN EVOLUTION, ALREADY PAYING OFF Century 21 recently repositioned its brand and launched one of its largest marketing campaigns in Australian history to promote itself. This investment is already benefitting its offices and helping to strengthen the network. Owner and chairman Charles Tarbey said that C21’s focus is on ensuring that its value offering to agents is as strong as it can be. “Our marketing clearly promotes and differentiates our
Mr Tarbey said that the logo was
“Century 21 was always focused
reflected on the iconic brand, but
around delivering positive and
also pointed to the future in a fresh
modern real estate experiences
way. He said that the new logo “pays
to consumers. This is the next
homage” to the iconic nature of the
evolution of that promise and we
Century 21 brand across the world.
couldn’t be more excited about the
“It was also pleasing to see that
care of itself if we do these, and other little things, right.” Mr Tarbey
future.”
the logo will be shortened to C21, as other businesses have had a great deal of success shortening their names and capitalising on how consumers describe their businesses,” Mr Tarbey said. The rebrand will also update Century 21 offices to have a modern upmarket feel in keeping with the brand’s offering to the market.
announcement was
chairman told REB.
growth will take
JOURNALIST AT R E A L E S TAT E B U S I N E S S
“When the rebranding
offices in the field,” the
“I believe that
B Y T I M N E A R Y,
delivered in front
“...the logo “pays homage” to the iconic nature of the Century 21 brand across the world.”
of over 2,400 Century 21 agents in Florida, our global CEO received a standing ovation from
said that the
the entire crowd.
new identity was a part of the brand’s evolution in the region. “The new brand is built around our
The passion and excitement in the room was palpable,” Mr Tarbey said.
new standard of defying mediocrity
Mr Tarbey said that this is an
and delivering extraordinary real
exciting time for the brand.
estate experiences to consumers.”
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The story Charles Tarbey: C21 rebrand an evolution, already paying off, first appeared on Real Estate Business (REB). Article Link: https://www.realestatebusiness.com.au/ better-business/17790-charles-tarbey-c21rebrand-an-evolution-already-paying-off
HOUSING CORRECTION
HOUSING CORRECTION MARKS TWELVE MONTH ANNIVERSARY
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
Australia’s housing correction marks its twelve month anniversary with values down 2.7% since peaking in September last year.
13.2% lower relative to their 2014
slowing to 0.7%, while the annual
peak, Sydney and Melbourne are
growth rate has slowed from 14.3%
on the national
Canberra has seen
housing market
annual gains
“Sydney and Melbourne are now the primary drag on the national housing market performance.”
performance. “We’ve seen
The Australian housing market continued to weaken in September, with national dwelling values falling 0.5% over the month, marking twelve months of consistently falling values across CoreLogic’s national hedonic home value index. Dwelling values tracked lower across five of the eight capital cities in September while five of
in Hobart to 9.3% and
now the primary drag
Sydney dwelling values drop 6.1% over the past twelve months
slide from 7.8% to 2.0%. The only capitals to see an improvement in the annual change in housing values were Perth and
and Melbourne
Darwin where the
values are 3.4%
annual rate of decline
lower. Not only are these amongst the largest annual
has eased off.
falls across the capital cities, but
Regional markets, where housing
considering Sydney and Melbourne
values have generally been more
comprise approximately 60% of
resilient to falls than in the capital
the national value of housing, the
cities, are now showing more
Since the national index peaked
weak conditions in these cities have
challenging conditions. Despite
twelve months ago, dwelling values
a substantial drag down effect on
regional Western Australia being
have fallen by 2.7%; hardly a crash,
the overall national housing market
the only ‘rest of state’ region to
and a slower rate of decline relative
performance.”
record a decline in dwelling values
the seven ‘rest of state’ regions recorded a fall in values over the month.
to the previous housing market downturn (Jun 2010 to Feb 2012) when national dwelling values fell by 3.0% over the first twelve months, declining 6.5% from peak to trough.
Although dwelling values are still rising on an annual basis in Brisbane, Adelaide, Hobart and Canberra, the rate of capital gain has slowed noticeably in these regions. One year ago, the annual
CoreLogic head of research Tim
gain in Brisbane was tracking at
Lawless said, “While the housing
2.9% and has since slowed to just
market downturn is well entrenched
0.8% over the past twelve months.
across Darwin and Perth where
Adelaide values were rising at the
dwelling values remain 22.1% and
annual rate of 5.0% a year ago,
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over the past twelve months, the September quarter saw values dropping in Regional NSW (-1.3%), Regional Vic (-0.2%), Regional Qld (-0.6%), Regional SA (-0.3%) and regional WA (-3.4%).
BUYING OFF-MARKET
BUYING AN OFF-MARKET PROPERTY B Y C H R I S G R A Y, C E O, YO U R E M P I R E
Off-market sales can be a great way to build an investment portfolio or streamline a selling process, but there are some risks involved.
the stress and inconvenience
secure an off-market property. In a
associated with a traditional
booming market in a prime area, 95
property sale. You might have
per cent of real estate agents will
purchased a property for
push to take a property to auction.
$250,000, but now it’s worth
Even now with the market falling
$1,000,000. In most cases, an
and properties not selling as quickly
agent will push for an auction,
as they used to, it can still be
especially in a booming market. An
challenging to secure a silent sale.
If a property is sold without being
auction could get you $1,100,000,
Real estate agents in a slow market
listed or advertised on any of
but it could also get you $900,000.
have fewer listings, and when they
the major real estate portals, it is
However, if you choose to sell the
manage to acquire new business,
typically considered an off-market
property silently, you might secure
they often work the listings harder,
sale. There are two primary types
a guaranteed $1,000,000 but
meaning they take it to auction and
of these transactions; a pre-market
without all the hassle involved in
tell the world about it in the hope of
opportunity and a ‘true’ off-market
the selling and auction processes.
getting other listings from buyers
opportunity. In a pre-market
It’s similar to trading in your car
that are also sellers. It’s vital to keep
situation, an agent will connect
rather than selling privately; many
your head, be patient, and be sure
with interested parties in the hope
people would rather take the cash.
to triple-check yourself at every
of receiving an offer before the property is promoted publicly or taken to auction. In a true offmarket opportunity, the property in question is sold without any immediate plans to be placed on the market. For vendors, one of the main benefits of a silent sale is eluding
If you’re thinking about purchasing property off-market, be sure to
milestone to ensure you’re not short-changing yourself.
do your research, especially if
While off-market sales afford
you plan to handle the process
several advantages, they also
yourself. There are many pitfalls for
present some additional risk. As
those who rush or those who bring
a buyer, be wary that not all off-
emotion into the sale.
market properties are a good deal
Depending on market conditions, it can be relatively difficult to
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and they are not always great properties. In some situations,
vendors will have unrealistic
well-connected with real estate
expectations. In this case, it’s
agents. Further, a real estate agent
essential you exercise due diligence
is far more likely to close a deal
and make sure you’re not paying
with a buyer’s agent over someone
too much and ensure the property
new, as they know from previous
really does tick all the boxes.
transactions that the process will
It’s also important to be aware of buyer’s agents’ services if you are time-poor, or if you would like
likely be smoother and quicker than if they were selling to a potential tyre kicker.
professional assistance to build
Provided you do your research and
your investment portfolio. A buyer’s
remain patient, in conjunction with
agent specialises in scoping out,
utilising a reputable buyer’s agent
evaluating and then purchasing
(should you choose this path),
Chris Gray is CEO of Your Empire, a buyer’s
properties on behalf of their client,
purchasing property off-market
agency which builds property portfolios for
a buyer or investor. There are many
can be a cost-effective way to build
advantages to using a buyer’s agent,
an investment portfolio, especially
the foremost being their industry
during market uncertainty.
and investment knowledge. A
Alternatively, a silent sale for
renovating on others’ behalf, providing a
buyer’s agent is a market expert and
vendors can streamline the selling
unique insight into market conditions and
a skilled negotiator; they make their
process and speed up a sale.
living buying competitively priced
ABOUT THE CONTRIBUTOR
time-poor people – searching, negotiating, renovating and managing property on their behalf. Chris’s team buys 1-2 properties a week and often spends $5m+ a year
buyer and seller sentiment. Chris hosts “Your Property Empire’ each Friday on Sky News Business channel, where he
real estate and often specialise in
interviews various heads of property research
off-market sales.
companies and major industry figures. Chris is a qualified accountant, buyer’s agent and
A buyer’s agent can also give you
mortgage broker. For more information visit
access to off-market properties
www.yourempire.com.au,
that you wouldn’t find on your own,
www.chrisgray.com.au and follow Chris on Twitter: @ChrisGrayEmpire.
as buyer’s agents are generally
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ALL YOU CAN DEDUCT
COMMONLY MISSED DEDUCTIONS BY BRADLEY BEER, B M T TA X D E P R E C I AT I O N
Depreciation is a complex area, so unless you’re a specialist Quantity Surveyor or a qualified Tax Accountant, it can be hard to wrap your head around it. As such, investors miss deductions all the time, meaning they could be losing out on thousands of dollars.
WHY ARE DEDUCTIONS MISSED?
capital allowance claims.
You should ensure you seek the
services of a Quantity Surveyor
There are a few reasons why
who specialises in property
deductions may be missed or not
depreciation to ensure claims
maximised.
are maximised. A specialist
• The first is that many investors
will have up to date knowledge
of legalisation and the tools
and tricks available to maximise
deductions in a legally
remain unaware of depreciation
and that it’s even a valid claim.
This is possibly because it is a
non-cash deduction, meaning
the investor does not need to
compliant manner. They will
also ensure that no asset goes
spend any money in order to
unaccounted for.
make a claim. Furthermore,
• Many investors are unaware
Research shows that 80 per cent
they may not realise the
that they can make a claim
of property investors are failing to
significant deductions available
for renovations completed by a
maximise the deductions claimed
and may falsely consider it a
previous owner. So long as they
from property depreciation.
minor claim not worth their time.
fall within the qualifying date
So why are so many investors
• They may not be getting
for capital works, these
missing out and what deductions
a specialist to prepare a tax
previously completed
commonly go missed?
depreciation schedule.
renovations are a valid claim and
Quantity Surveyors are one of
can provide significant
a few professionals recognised
deductions for current owners.
by legislation (Tax Ruling
• Unusual or small items often go
97/25) to have the appropriate
construction costing skills to
of depreciation, many investors
calculate building costs for
don’t realise that things as
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overlooked. Even if they’re aware
Some examples include:
simple as door stoppers, shower
curtains and spa bath pumps
can attract a depreciation
claim. While they may seem
• Door closers
small, these items can really add
up in a depreciation claim.
• Rugs
• Some investors will choose to
This schedule will cover the life of the property, can be easily used by
• Garbage bins
your Accountant when preparing your tax returns and will ensure that these commonly missed deductions will not go unnoticed.
• Smoke alarms • Exhaust fans
make a self-assessed claim.
This is risky for a variety of
reasons. Many investors do not
have the technical knowledge of
a trained professional, and as
such, they can overlook
• Shower curtains
important items or make an
• Spa bath pumps
incorrect claim, which may
mean it is not compliant and
puts them at risk in the event of
• Tennis court nets
an ATO audit. It’s always best to
get an expert on board to
• Automatic window shutters
prepare your tax depreciation
schedule.
• Electric clocks • Freestanding bathroom accessories
• Garbage disposal units
• Freestanding garden sheds • Intercom system • Electronic water filters
WHAT ASSETS ARE COMMONLY MISSED? As previously mentioned, renovations made by previous owners are commonly missed. Speaking of renovations, if an investor is currently completing a renovation, they may be eligible to scrap any assets they’re getting rid of in the renovation. This means they can claim the remaining depreciable value for certain assets. This can be commonly missed if a specialist Quantity Surveyor has not provided assistance. Furthermore, a Quantity Surveyor will know how to make use of different strategies and tools to maximise deductions sooner, such as the low-value pool. If this is overlooked, it can result in valuable deductions going unclaimed. Finally, small or unusual items are often overlooked, deemed too insignificant by investors to warrant making a claim.
• Ceiling fans • Solar garden lights • CCTV systems • Water feature pumps; to name a few These deductions may seem small, but they do add up for property investors and should not be overlooked.
WHAT’S THE SOLUTION?
ABOUT THE CONTRIBUTOR Article provided by BMT Tax Depreciation.
When it comes to property
Bradley Beer (B. Con. Mgt, AAIQS, MRICS,
depreciation, it’s always best to
AVAA) is the Chief Executive Officer of BMT
employ the services of a Quantity
Tax Depreciation.
Surveyor that specialises in tax
Bradley joined BMT in 1998 and as such he
depreciation, such as BMT, to
has substantial knowledge about property
prepare a tax depreciation schedule for your investment property.
investment supported by expertise in property depreciation and the construction industry.
This will not only ensure that these
Bradley is a regular keynote speaker and
deductions are not missed, but that
presenter covering depreciation services
deductions for all qualifying assets are maximised and compliant with
on television, radio, at conferences and exhibitions Australia-wide. Please contact 1300 728 726
ATO legislation.
or visit www.bmtqs.com.au
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LEASING YOUR PROPERTY
10 TIPS TO GET YOUR PROPERTY LEASED BY TERRI SCHEER LANDLORD INSURANCE For first-time landlords, and even for experienced property investors, finding a tenant can seem to be a stressful prospect. However, the process doesn’t have to be difficult; by boiling process down to essential elements, you’ll be surprised how simple the task can be. Making sure the house is appealing to prospective tenants is important, but there are many other tangible steps you can take to get your property leased. From knowing when to enlist professional help, to strategically planning when to open the property for inspection, here are 10 tips to help you get your property leased as quickly as possible.
1. IMPROVE STREET APPEAL
3. REVIEW C0MPARABLE RENTALS
First impressions count for everything. To maintain street
Comparing your property to others
appeal, make sure the pathway is
on the market will reveal useful
clear and that everything visible
information. You might find that
from the kerb – including doors,
you need to reduce your rental
gutters and windows – is clean
expectations or make improvements
and in good repair. Make sure the
to the property to be competitive
garden looks healthy and touch up
with other similar properties.
any external paintwork that needs freshening.
4. INVEST IN QUALITY PHOTOGRAPHY
2. SET STRATEGIC VIEWING TIMES
Good photography makes all the difference when it comes to
A savvy strategy employed by
appealing to your target audience.
experienced property managers is
Blurry photos, poor composition,
to hold inspections at the times your
and unflattering angles can turn
property presents at its best. For
renters off before they’ve even
instance, this might mean setting
stepped through the door. Make sure
viewing times after dark to show off
your property is looking its best for
a glittering city view. Alternatively,
photos – beds made, benchtops free
if the property is positioned on a
from clutter and straight curtains or
noisy street, hold off on conducting
blinds can make a real difference.
inspections until after peak commuting hours.
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Consider investing in a professional photographer; remember, their rate should be tax-deductible, and you can use the photos for years to come.
5. DO A DEEP CLEAN While it comes at a small cost of around $100-$200, enlisting the services of a professional cleaner could pay you back ten-fold if it
7. MAKE GARDENING STRESS-FREE
9. USE A PROPERTY MANAGER
If your investment property has
A fresh and clean atmosphere inside
a sizeable garden attached to it,
the house will immediately make
consider hiring a gardener. Not only
it easy for the tenants to picture
is it tax deductible, but the cost of
themselves living in your property –
long-term garden neglect can be
and this starts from the ground up.
steep. A gardener will also ease the
The ATO assumes the life of carpet
pressure on potential tenants to
is around 10 years, so use this as a
maintain their new home, adding
guide and aim to replace the carpets
further appeal to your property.
every decade or so.
8. USE A PROPERTY MANAGER
10. AVOID PEAK RENTAL TIMES
According to The Australian
Avoid listing from late November
Landlords Panel*, around 23%
and through December. Many
of landlords self-manage their
people will be too busy to house-
properties – even though most
hunt until the New Year, so listing
landlords are working full time.
your property during the Christmas
attracts a new tenant sooner. Have the property deep cleaned before taking photos, or before inspections, and have the tenants maintain the standard to ensure the property is presented in its best light.
6. BE PROACTIVE WITH REPAIRS
It’s important to consider whether
season would risk your property remaining vacant, potentially for
Falling behind on even minor
your time is best spent finding and
repairs could see tenants move your
managing tenants or whether this
property to the bottom of their pile.
is best left to the expertise of the
Instead, structure your leases so
Everything that needs to be fixed
professional. Also, keep in mind that
they become due in late January or
should be fixed. This includes leaky
some insurers require a property
October.
taps, broken light fittings, damaged
management agreement to be in
fly screens on doors and windows,
place as a condition of insurance.
over a month.
and even loose doorknobs that need tightening.
ABOUT THE CONTRIBUTOR The information contained in this article is intended to be of a general nature only. Terri Scheer does not accept any legal responsibility for any loss incurred as a result of reliance upon it. Insurance issued by Vero Insurance. Read the Product Disclosure Statement before buying this insurance and consider whether it is right for you. Contact Terri Scheer on 1800 804 016 or visit our website at www.terrischeer.com.au for a copy. https://www.terrischeer.com.au/
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FRONT FACELIFT
WAYS TO IMPROVE THE FRONT OF YOUR HOME ‘First impressions count’ may be among the most used clichés in the English language, but that’s because it’s undeniably true. When it comes to your home, the first impression serves as a benchmark for the rest of the house, especially for those who haven’t been inside. Fortunately, there are various simple tricks to help give your front yard a facelift.
CLEAN UP Many properties can fall victim to bad first impressions if the front yard is untidy or overgrown. Simply trimming overgrown trees, weeding the garden, cleaning up any toys and replacing any broken pavers and steps can be a great way to boost street appeal and create a safe front entrance to your home.
ADD FURNITURE Buying furniture for the front of
Here are three changes you can
your house can add character and
make to the front of your home to
create a relaxing space to farewell
improve street appeal:
visitors or enjoy your morning coffee. Deciphering which furniture
FRESH PAINT Giving the front of your property or elements of your front yard a fresh coat of paint can completely revamp the perception of your home. Renovators looking for the
best suits your home often depends on the style of your property and your taste. A small outdoor table and chairs set or an outdoor bench with contemporary throw cushions are typically good options for personalising a front porch.
most striking results often paint their front door, front fence, eaves and beams, and outdoor furniture if they have it.
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RELENTLESS MOVES
Big dreams are realised after small goals are achieved consistently. Speak to a Century 21 agent today to find your dream home.
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