2 0 1 9
P U L S E
S E P T E M B E R
M A R K E T
C21
PUBLISHER Century 21 Australia Pty Ltd
CONTRIBUTORS Kathryn Madden Elite Agent Magazine 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
SEPTEMBER 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 S E P T E M B E R
PROPERTY SPOTLIGHT
02-03
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BENEFITS AS A CO-OWNER
Spotlight on: luxury apartment living.
How co-ownership can benefit investors.
Home Beautiful Magazine Editor, Kathryn Madden
BMT Tax Depreciation, Bradley Beer
EXPANDING NETWORK
04
VAMPIRE POWER
Century 21 expands Western Australian presence.
Vampire power: which appliances are contributing
Elite Agent Magazine
to a scary energy bill?
08-09
10
On The Move
PROPERTY MARKET UPDATE
05 FRONT FACELIFT
National dwelling values record first rise since
Ways to improve the front of your home
October 2017. Corelogic Head of Research, Tim Lawless
PLAN YOUR RETIREMENT
11
OPEN HOMES 06-07
Why increasing your debt when you’re 50 could be a great thing.
A selection of properties for sale with Century 21 from right around Australia. As seen in the current edition of Home Beautiful Magazine.
Your Empire CEO, Chris Gray
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13-21
PROPERTY SPOTLIGHT
Spotlight on: luxury apartment living
BY K AT H R Y N M A D D E N ,
EDITOR, HOME BEAUTIFUL MAGAZINE
Once upon a time, the dream of home ownership comprised a quaint weatherboard cottage with a white picket fence. Today, it involves sprawling city views, an on-site gym and a dashing doorman. Luxury apartment living is booming in Australia, with buyers and renters of all ages lapping up the benefits. “The trend started at the turn of this decade and has been growing in prominence ever since,” says Charles Tarbey, Chairman of
Century 21 Australasia. Envisioning
facilitates deliveries, dry-cleaning
your own plush penthouse? Here’s
and other day-to-day demands.
everything you need to know.
However it’s not all about opulence, but rather, convenience. A body
WHY ARE LUXURY APARTMENTS TRENDING?
corporate or strata firm looks after
A rooftop pool, swanky spa and
in the lock-and-leave lifestyle if
in-house cinema may seem
affords (namely, travelling to the
beyond your reasonable real-estate
coast on weekends rather than
possibilities, but apartment living
mowing the lawns).
all the general maintenance of a complex, and many residents delight
makes luxury more accessible than ever. Cutting-edge design and dazzling finishes define the best blocks on the market, which take cues from five-star hotels with their lavish lobbies and lounges. Some even come with a concierge who
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WHO MAKES UP THE MARKET? Today’s luxury apartment inhabitants are an inter-generational bunch.
Millennials are increasingly choosing to rent for lifestyle and
WHAT TO LOOK OUT FOR …
buy where they can afford – so
Future buyers and renters alike
while they might have invested in
should approach the luxury
the aforementioned weatherboard in
apartment market with a considered
the ‘burbs, they’re opting to live in a
eye. “Find a complex that has a high
slick urban apartment kitted out with
owner-occupier scenario, as this
high-end amenities.
can guarantee minimal disruption,”
Then, there are the Baby Boomer downsizers. “Many homeowners have gained equity over the years and can comfortably sell and have sufficient funds to buy a quality apartment with funds left over,” says Tarbey. “Also, personal security is an issue confronting older couples, and apartment living gives them a strong feeling of safety.” Finally, it seems we’re taking cues from mega-cities like New York and London. Families with children now make up a quarter of Australia’s total apartment population, with the figure increasing by 56 per cent
advises Tarbey. “When there’s a high level of investor-ownership, movement within the complex is frequent.” If you’re looking to buy, check that the strata fees are in line with other comparable complexes and that there’s a solid sinking fund – this will be your safety net for communal expenses, from exterior painting to a broken elevator to water damage. Adds Tarbey, “Be mindful of the position and orientation of the apartment – a west-facing apartment isn’t ideal in the Australian climate [due to intense afternoon sunlight].”
between 2011 and 2016, according to the Australian Bureau of Statistics.
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/spotlight -on-luxury-apartment-living?category= open_homes
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EXPANDING NETWORK
C21 EXPANDS WESTERN AUSTRALIAN PRESENCE Century 21 has expanded its network with the opening of a new office in Canning Vale, south of Perth. Strategically situated on the doorstep of one of Perth’s fastest growing suburbs of
A 10-year journey working in the
Century 21 CEO Warren McCarthy
professional sporting arena such
was full of praise for the new office.
as America’s Cup and Volvo Ocean Race campaigns led to Mr Pattullo developing his ethos of “Principal with Principals”. His belief that working diligently to ensure all parties are cared will deliver a win-
corridor, the C21 Resicomm office will be headed up by
Mr McCarthy said.
is our commitment to providing
“Simon is a great operator and we’re very pleased that he chose the Century 21 brand to help deliver continued success to his business.”
superior professional service and high ethical standards each and every day,” Mr Pattullo said.
Simon Pattullo.
“Our highly-
Mr Pattullo, who was born and bred in the region, has an extensive background in real estate including many years as a Director/Licensee of his Canning Vale agency. Having been taught by the ‘old guard’, Mr Pattullo specialises in residential sales, strata management, property management and all aspects of commercial real estate throughout Western Australia.
continued success to his business,”
personalised service, experience and in-depth market knowledge ensures our team are highly sought after by vendors and investment property owners alike, to sell and manage their properties.” The C21 Resicomm team have a love for their community and a deep understanding of the local property market, and will offer residential, rural, commercial and land sales, property management and auctions.
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The story C21 expands Western Australian Presence, first appeared on Elite Agent. Article Link: https://eliteagent.com/c21-expandswestern-australian-presence/
Pictured: Simon Pattullo, C21 Resicomm
Canning Vale
Century 21 brand to help deliver
win scenario.
Canning Vale, the busy
very pleased that he chose the
“Our point of difference
Southern River, Harrisdale and
“Simon is a great operator and we’re
P R O P E R T Y M A R K E T U P DAT E
NATIONAL DWELLING VALUES RECORD FIRST RISE SINCE OCTOBER 2017 The recovery in housing values accelerated in August 2019 with national dwelling values increasing by 0.8% over the month. The lift in housing values through August was substantial, however, the recent growth is a continuation of the trend seen throughout the year whereby value falls were consistently losing momentum, and have now started to rise.
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
Housing values increased across
past year while combined regional
five of the eight capitals over
market values are -2.9% lower.
the month, but slipped lower in Adelaide, Perth and Darwin. Across the rest-of-state regions, only Vic, Tas and NT recorded monthly increases.
CoreLogic research director Tim Lawless said, “The significant lift in values over the month aligns with a consistent increase in auction clearance rates and a deeper pool of buyers at a time when the volume of stock advertised for sale remains low. “It’s likely that buyer demand & confidence is responding to the positive effect of a stable federal government, as well lower interest rates, tax cuts and a subtle easing in credit policy.”
dwelling values, regional Tasmania is the only major region where values are currently at an historic high. Sydney dwelling values remain
Mr Lawless noted it was the third
more than 10% below their previous
successive month of capital gain
peak (-13.3%) and Melbourne values
in Sydney, Melbourne and Hobart
are almost 10% lower than the peak
and the second successive month
(-9.5%). Mr Lawless said, “Although
of increases in Brisbane. He said,
the recovery trend in these two
“While the ‘recovery trend’ is still
cities continues to strengthen, the
early, it does appear that growth
expectation is that it will take some
trends are gathering some pace,
time for values to return back to
particularly in the largest
their previous highs.”
capital cities.” Commenting on the August results,
Despite the recent increases in
The weakest market conditions
The rolling quarter saw national
continue to emanate from Perth and
values lift by 0.6%; the first rise in
Darwin, where values dipped further
values over a three month period
over the month, although the
since November 2017. Combined
three month trend in both cities is
capital city dwelling values have
suggesting an improvement in the
increased by 1.0% over the past
rate of decline. Darwin values are
three months while combined
now 30.7% below their May ’14 peak
regional market values have
and Perth values are 20.6% down
continued to trend lower,
from the June ’14 peak.
down -0.6%. National dwelling values reached their largest annual falls in May 2019 at -7.3%, by the end of August 2019 the annual decline in dwelling values had lifted to -5.2%. Combined capital city dwelling values are -5.9% lower over the
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PLAN YOUR RETIREMENT
WHY INCREASING YOUR DEBT WHEN YOU’RE 50 COULD BE A GREAT THING 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. Our parents have always suggested that if you want to retire early and be financially free then you need to be debt free. Society has always
B Y C H R I S G R A Y, C E O, YO U R E M P I R E
said the same: ‘debt is bad and
equity to invest elsewhere?’ Instead
evil’. This might be true and a safe
of waiting to pay your first home off,
option for the average person, but
why not invest now? Reducing your
for those that want to create even
personal, non-deductible debt is a
more freedom and choice in their
good thing - however investing in a
retirement, it doesn’t have to be
second or third property will often
the case.
make hundreds of thousands of
As you get older there is often a large amount of spare equity in the family home. Having it sit
dollars more than the few thousand you’ll save in interest paying off your home.
there doesn’t make you any richer,
The main way people lose money
however if you get it working you
in real estate is when they buy
could have twice as much - if not
something too speculative and
more - on retirement. Most people
volatile, or when they are forced
spend a lifetime paying off their
to sell. If you buy median-priced,
mortgage, and when they finally do,
blue-chip properties in blue-chip
the banks say ‘why not use that dead
locations, and have the cash flow to
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hold on for the long term, it rarely
are the same, so if you want to be
goes wrong. Create a cash flow
more entrepreneurial you need to
buffer from your existing equity to
find an entrepreneurial lender.
ensure you never have to sell.
If you want to play things safe you
ABOUT THE CONTRIBUTOR
Your lifestyle doesn’t have
should buy a home, pay it off, and
to sacrifice if you buy more
invest from there. However, if you
investments - even if they are
want to create an extraordinary
negative geared. Just as you can
retirement, you need to go against
use your spare equity as a cash
the crowd. Investing can be risky if
buffer, you could use your equity
you don’t know what you’re doing.
host of ‘Your Property Empire’ on Sky News
to help cash flow in any difference
Make sure you hire professionals
Business channel, where he’s interviewed
between the rent and the mortgage.
who are making money through
Think of it as working capital in your
property investment themselves,
business. Banks have responsible
rather than people who have the
lending codes to abide by which
qualifications but aren’t practicing
www.yourempire.com.au,
should ensure that you do have the
what they preach.
www.chrisgray.com.au and follow Chris on
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
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.
serviceability to cover any extra borrowings. However not all lenders
C21 MARKET PULSE
Chris Gray is CEO of Your Empire, a buyers’
07
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BENEFITS AS A CO-OWNER
HOW C0OWNERSHIP CAN BENEFIT INVESTORS BY BRADLEY BEER, B M T TA X D E P R E C I AT I O N
A number of investors are entering the property market by teaming up with a friend, family member or business partner to purchase an investment property. This poses questions when investors come to complete their annual income tax return, particularly given ownership structures can influence how deductions are calculated.
IMMEDIATE WRITE-OFF
IMPORTANT LEGISLATION
Australian legislation allows
Legislation introduced in 2017
property investors to claim an
brought about major changes to
immediate write-off for assets with
plant and equipment depreciation
an opening value of less than $300.
claims. Plant and equipment
In a situation where ownership
depreciation refers to the wear
is split, an accountant can apply
and tear that occurs to the easily
this rule and claim an immediate
removable fixtures and fittings
write-off to items where an owner’s
found within the property. Under
interest in the asset, as opposed
current legislation, owners of
to its total opening value, is
second-hand residential properties
below $300.
who exchanged contracts after 7:30pm on 9th May 2017 cannot
LOW-VALUE POOLING Where an owner’s interest in an asset is less than $1,000, these
As an investor, it’s important to
items will qualify to be placed in a
know how ownership structure can
low-value pool. Pooling is a method
affect your cash flow. Two methods
of depreciating plant and equipment
of depreciation assist in the process
assets at a higher rate to maximise
of maximising depreciation claims
depreciation deductions. Investors
for co-owners - immediate write-
who decide to place assets into
off and low-value pooling.
a low-value pool can claim them at a rate of 18.75 per cent in the year of purchase and 37.5 per cent thereafter.
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claim deductions for previously used plant or equipment assets. Investors who purchase brandnew residential and substantially renovated properties, commercial real estate or add new plant and equipment assets to a second-hand residential property can still claim substantial depreciation deductions.
CO-OWNERSHIP CASE STUDY, 50:50 SPLIT The following example highlights the importance of splitting assets’ opening value and applying depreciation legislation to each person’s interest in each item. A couple purchased a residential investment property with a 50:50 ownership share. A site inspection performed by a depreciation expert found $27,462 worth of eligible plant and equipment assets. A Quantity Surveyor conducted an assessment on the depreciation deductions and the results are shown below.
Without Co-ownership vs With Co-ownership Deductions Year one
Year two
Year three
Year four
Year five
Total Deductions
Without 50:50 split report
$5,547
$4,628
$3,763
$2,871
$2,218
$19,022
With 50:50 split report
$6,039
$4,671
$4,600
$3,211
$2,600
$21,121
Depreciation deductions in this scenario are based on a full financial year. The plant and equipment assets are brand new and comply with 2017 legislation.
By applying a split to the value of the assets in a co-ownership scenario, an additional $2,099 could be claimed in depreciation deductions.
ABOUT THE CONTRIBUTOR 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.
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VA MP I R E P OW E R
VAMPIRE POWER: WHICH APPLIANCES ARE CONTRIBUTING TO A SCARY ENERGY BILL? Standby power - also known as ‘phantom load’ or, scarier still, ‘vampire power’ - is the energy that is used while your devices are turned off, but still plugged in.
BY ON THE MOVE
download content, run automatic
phantom power, with standby costs
Wi-Fi checks, and require complex
being typically around the $5 mark
standby sensors to enable them to
for an entire year. That being said,
be turned on by remote control or
in a world where households rarely
even voice activation. A gaming
have only one screen, this wasted
console on active standby uses
energy use can add up quickly.
an average of 5.4W of power per hour, clocking an extra 0.15 cents of electricity every 60 minutes.
According to the Department of
Forgetting to turn them off when
Industry, Innovation and Science,
you go on holiday could be a costly
Australians spend $860 million on
mistake.
the amount you spend on vampire power will vary depending on the number and type of appliances left on standby, the appliance efficiency ratings and your electricity rate.
standby power annually. To put that in perspective, that’s roughly $100
Every household is different, and
But no matter which way you
per household each year.
WHERE ARE THE VAMPIRES IN YOUR HOUSE?
ACTIVE STANDBY VS PASSIVE STANDBY
The ones to watch out for are
Appliances which are turned off,
machines and dishwashers.
yet still display the time or can
Your wireless modem is also a nasty
be activated by remote control
user of phantom power. But seeing
or internal timers, are typically in
as it’s technically ‘in use’ all the time,
‘passive standby’ mode when not
it may not be the most practical
in use. These use relatively little
ABOUT THE CONTRIBUTOR
device to shut off every day. If you
electricity, just enough to power
are looking to cut costs, consider
On the Move is Australia’s leading service connections
sensors that enable it to be switched
turning off your modem when you
gas, phone, internet, pay TV and insurance.
back on.
head to work in the morning, and
Since 2004 On The Move has partnered with Real
But not all appliances are so simple.
definitely if you go away on holiday.
Estate agencies and other organisations to give
The ones to watch for are those
You might be surprised to know
lights-on experience.
who go on “active standby”. Gaming
that DVD players and televisions
consoles, for example, routinely
consume relatively small amounts of
https://www.onthemove.com.au/
slice it, there’s a lot of money and energy being drained by phantom consumption.
Gaming consoles; Washing
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specialist providing a one-stop service for electricity,
their customers a convenient and seamless move-in,
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Electricity
Gas
Home Phone
NBN / Broadband
Pay TV
Insurance
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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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
n the 4. DO YOUR RESEARCH i n e e As s on of If you plan to buy an apartment i t i be particularly illusive.eMake sure d ent rrexact cu to check the locationa ofu the tiful be sure to get a strata inspection e B e m enough room report and familiarise yourself laundry, that Hothere’s e! n i z a g with any levy fees, past, current or in the kitchen toM bea functional and those rooms. If you’re looking at
apartments, then the laundry can
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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Invite to your property millions of potential buyers.
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