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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 REI Super Home Beautiful
EDITORIAL ENQUIRIES Century 21 Australia (02) 8295 0600
ADVERTISING ENQUIRIES Century 21 Australia (02) 8295 0600
WELCOME TO THE
February 2022 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
Cover image: Minh Pham on Unsplash
C O N T E N T S F e b ruary
REFINANCING OPTIONS
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SUPER STAPLING
What can you do when the bank says
New rules to avoid multiple, costly super accounts
no to refinancing
REI Super
Your Empire CEO, Chris Gray
LUXE FOR LESS
PROPERTY MARKET UPDATE
05
Affordable ways to make your home look luxe Home Beautiful
January results surprise to the upside, as Sydney and Melbourne growth rates stabilise CoreLogic Head of Research, Tim Lawless
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REFINANCING OPTIONS
WHAT CAN YOU DO WHEN THE BANK SAYS NO TO REFINANCING
B Y C H R I S G R A Y, C E O, YO U R E M P I R E
I’ve been investing in property for almost 30 years and I’m still learning. I get to know more from friends, colleagues, books, other investors and generally just by asking questions and being inquisitive.
Let’s say a number of years ago you
back the title deeds. They probably
bought 2 x $500k properties with
won’t do it if you say you’re going to
2 x 80% loans of $400k each. Over
sell a property as that would reduce
time ideally those properties would
the income you’re using to service
grow to $1m each and so you would
the $800k debt, but if you say
only be 40% geared on both.
you’re doing it for asset protection
You might then like to access some of the equity to take a holiday, do some renovations or retire early. In an ideal world you refinance to
/ diversification reasons that may give you a better chance. So then you have your original $1m of property with the bank and your 80% $800k loan.
A lot of my strategy has been about
80% again and have $800k in your
buying blue chip properties in blue
redraw account $2m x 80% = $1.6m
At a later date you may then choose
chip locations and then refinancing
less $800k already owed = $800k
to refinance or sell.
However, if you don’t have the
With that $1m of debt free property
ability to service $1.6m they won’t
you might be able to go to a 3rd
lend it to you.
or 4th tier lender and get a 10%,
every year or two in order to build my cash buffer or to buy more property. In the good old days, you could tick a box to say you could afford it and you would get a 80% loan. These days you’ve got to watch how much Uber Eats you order and how often
If you sell one of those properties for $1m then the bank may require you to pay off that original related
20% or 30% no doc loan at very reasonable rates as the risk is very low for the new lender.
mortgage of $400k which means
If that’s still not possible due to
you only get $600k net proceeds
serviceability constraints then you
Serviceability is a major issue with
from the sale, less tax of $125k
could sell one.
refinancing these days and that’s
($500k capital gain less 50% CGT
what property investing has turned
discount x up to 50% tax). So you
into - 90% of a game of getting
only end up with $475k.
you take your pet to the vet.
money from the bank and 10% of what property to buy and how to manage it.
But this time you get the full $1m proceeds as those properties are debt free. You still pay the $125k
There’s an argument to say that the
capital gains tax but now you
bank only needs $1m of security for
end up with $875k cash rather
your $800k original loan, not the
than $475k.
One alternative strategy to consider
$2m current value and so there’s
is to try and get banks to release
a chance they will release $1m of
properties debt free.
property debt free and give you C21 MARKET PULSE
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One of my friends has done this a couple of times and I’m currently going through this process now.
I still have no intention of selling one unless I really have to, but at least it will give me flexibility in the future. As always check your strategy with your mortgage broker, accountant and/or financial planner before taking any action. I hope this gives you some more options and as you can see, not all buyers agents or mortgage brokers are the same and so I suggest using ones that have got the results that you yourself want.
ABOUT THE CONTRIBUTOR Chris Gray is CEO of Your Empire, a buyers’ agency that buys homes and investments for time-poor professionals – 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, buyers’ agent and mortgage broker. For more information, visit www.yourempire.com.au and follow Chris on Facebook: @YourEmpire C21 MARKET PULSE
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We are proud to have been rated No.1 in Canstar Blue’s 2021 Most Satisfied Customers – Real Estate awards. No matter your property goals, we can help you achieve them. Contact your local C21 agent to find out what makes us different.
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P R O P E R T Y M A R K E T U P DAT E
JANUARY RESULTS SURPRISE TO THE UPSIDE, AS SYDNEY AND MELBOURNE GROWTH RATES STABILISE
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
CoreLogic’s national measure of housing values rose by 1.1% in January, up 10 basis points from the December result, when the national index was up 1.0%. Five of the eight capital cities recorded a modest uptick in the monthly rate of growth, including Melbourne, which had posted a slight decline in values in the previous month. However, the quarterly change continued to soften, reflecting the longer-term trend of slowing growth across most regions of Australia. CoreLogic’s Research Director, Tim
The annual change in national
Regional markets have again shown
Lawless, notes housing stock is thinly
housing values reached a new
a substantially stronger result for
traded during January and it will be
cyclical high in January, with
housing values, with the combined
important to monitor the trend as
Australian dwellings up 22.4%
regionals index up 1.8% over the
transactional activity picks up.
over the year; the highest annual
month and 6.3% over the rolling
rate of growth since June 1989.
quarter. This compares with a 0.8%
In approximate dollar value terms,
and 2.6% rise respectively across
the typical Australian home is now
the combined capital cities over the
worth $131,236 more than it was a
same periods.
“As the volume of home sales moves out of seasonal lows, we should get a firmer reading on how 2022 is shaping up,” he said. “The early indication is that housing markets are starting 2022 with a similar trend to what we saw through late last year. Values are still broadly rising, but nowhere near as fast as they were in early 2021.” “A softening in growth conditions has been influenced by less government stimulus, worsening affordability, rising fixed term mortgage rates and, more recently, a slight tightening in credit conditions, and a surge in new listings through the final quarter of last year.”
year ago. Brisbane has recorded the highest annual growth rate across the capital cities, with housing values up 29.2% (approx. $159,763).
Similar to the capital cities, it was regional Queensland (2.0%) and regional South Australia (2.1%) that led the pace of growth over
Continuing a pattern seen over
the month, however every broad
recent months, the January results
‘rest of state’ region recorded at
showed greater diversity, with
least a 1.2% gain, demonstrating
Brisbane (2.3%) and Adelaide (2.2%)
a depth of demand for regional
leading the pace of gains ahead
housing.
of Hobart (1.2%) while growth in Melbourne (0.2%), Darwin (0.5%), Sydney and Perth (both 0.6%) recorded substantially softer outcomes.
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Click here to read the full article
SUPER STAPLING
NEW RULES TO AVOID MULTIPLE, COSTLY SUPER ACCOUNTS What is super stapling? From 1 November 2021, employees will become ‘stapled’ to an existing super account of theirs. This means that when a new employee doesn’t choose a super fund, their employer must pay super contributions into their existing account (stapled fund). HOW WILL IT WORK? Employers must offer their employees a choice of super fund
BY REI SUPER
Where a new employee hasn’t
most recently. Where there is
chosen a fund and doesn’t have a
more than one active fund rules
stapled fund, super contributions
will be applied to select the most
must be made to a new account in
appropriate fund, for example, the
the workplace default super fund.
fund with the biggest balance.
WHY THE CHANGE? reduce the chance of workers
DO STILL NEED TO HAVE THEIR OWN DEFAULT OR PREFERRED FUNDS?
accumulating multiple super
Yes. If a new staff member
accounts after moving from one
is not already a member of a
job to another. Having more than
superannuation fund, then their
one super account can be costly
employer is generally required to
for employees, as it can mean they
offer them choice of fund and if
are paying multiple sets of fees and
they don't choose a fund they will
insurance premiums.
sign them up to the company's
The new rules are designed to
to meet their superannuation
CAN EMPLOYEES CHOOSE TO CHANGE THEIR SUPER FUND?
obligations by providing new
Absolutely. Employees will always
employees with a superannuation
have the ability to change funds if
Standard Choice form (either a
they wish. If they do, their new fund
hardcopy or through the ATO via
will become their stapled fund.
myGov) within 28 days of starting
Employees will still need to notify
at the company.
their employer if they do change
From 1 November 2021, if an
super funds.
employee doesn’t choose a fund, employers must use an ATO database to check if the employee has a stapled (existing) fund. If a stapled fund exists, super contributions must be paid into that fund.
WHAT IF MY EMPLOYEE ALREADY HAS MORE THAN ONE SUPER ACCOUNT? If an employee has more than one fund, they will be automatically stapled to the one that has been active (received a contribution)
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default fund, which will then become their stapled fund.
Click here to read the full article
DISCLAIMER Future investment performance can vary from past performance, and you should not base your decision to invest in REI Super simply on past performance. Past earning rates are not an indicator of future earning rates. The investment returns of REI Super are not guaranteed, and the value of the investment may rise or fall. This article was brought to you by Industry Super Australia. The information contained in this article is of a general nature does not constitute financial product advice. However, to the extent that the information may be considered to be general financial product advice, REI Super advises that REI Super has not considered any individual person’s objectives, financial situation or particular needs. Individuals need to consider whether the advice is appropriate in light of their goals, objectives and current situation. Members should obtain and read the Product Disclosure Statement for REI Super as well as the Insurance Guide and consider speaking to a licensed financial advisor before making any decisions. REI Superannuation Fund Pty Ltd ABN 68 056 044 770 AFSL 240569. RSE L 0000314 REI Super ABN 76 641 658 449 RSE R1000412 MySuper unique identifier 76641658449129 October 2021.
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REI Superannuation Fund Pty Ltd ABN 68 056 044 770 RSE L0000314 AFSL 240569. REI Super ABN 76 641 658 449 and RSE R1000412 MySuper unique identifier 76641658449129 for the general information of members of REI Super. It does not take into account any member’s individual financial objectives, financial situation or needs. Members should obtain and read the Product Disclosure Statement for REI Super before making any decisions and consider talking to a financial adviser before making an investment decision. Past performance is no indication of future performance. January 2022. REIS 7645
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LUXE FOR LESS
AFFORDABLE WAYS TO MAKE YOUR HOME LOOK LUXE
BY HOME BEAUTIFUL
It often feels as though a beautifully designed room and a limited budget are mutually exclusive things, but that isn't always the case. Money doesn't buy style, but great style can make a space look far more expensive than it really is. 3. LAYER, LAYER, LAYER!
the best ways to elevate your home
A great-looking home looks
and make it look more bougie than
complete and pulled-together, and
it really is.
layering is the key to this (a little
White walls and neutral furniture are timeless canvases that make changing, adding and upgrading everything else a cinch, because you don't have to worry that it'll all fit in together. Plus, neutrals
like the right shoes pull together an
spend some serious cash on an item like this rather than buying several cheap versions over the years. Save
rugs for a very affordable price.
drawer handles) can really drag a
not a museum. A plush throw and
space down. Upgrading is relatively
decorative cushions are an easy way
inexpensive, and is usually a DIY
to make your living room look more
job, to boot. Plus, it's generally
impressive and cohesive.
relatively inexpensive, so it's a good
days, it's time to upgrade. If your
that way, it makes sense that you'd
Temple & Webster have some great
they look like they belong in a home,
poky apartments).
every day for at least 10 years. Put
look. The lesson? Go big. Really big.
Dated hardware (like taps and
If your dining table has seen better
consider this: you'll sit on it almost
space feels, the more expensive it'll
7. REPLACE THE FIXTURES
a space look bigger (perfect for
a sofa might seem like a waste, but
The bigger the rug, the bigger the
depth and warmth, and ensures
4. TOSS THE STUFF YOU HATE
Dropping a few thousand dollars on
6. GO BIG
outfit). Layering gives your rooms
tend to always look great and make
2. SPLURGE ON THE BIG STUFF
exactly. Our tip: start at IKEA.
space will feel. And the bigger the
Here, we've collated a list of 10 of
1. START WITH A NEUTRAL PALETTE
cabinets) that fit the space you have
light fixtures look like they were installed in the '60s, invest in some
area to go a bit wild in and make a statement or embrace a trend. When and if you get over it, you can always replace them again and change the whole feel of the room.
new ones. You don't have to spend
8. GO OVERSIZE
a fortune, but changing the things
Large-scale artworks look amazing
you don't like will make your space
– and expensive. But they don't
feel instantly more inhabitable,
have to have the price tag to match.
and will clear the way for you to see
Go to second-hand stores, student
what's missing or what needs to
art shows and even IKEA to score
be done.
cool finds. If you can't find anything you like, then it's also really easy
your pennies on stuff that won't
5. FAKE BUILT-INS
last the distance, like accents. Art
Built-in custom cabinetry looks
is another area to invest in that will
super-expensive... because
elevate your home tenfold, and can
generally, it is. But you can fake
really tie a room together.
the look with a cabinet (or several C21 MARKET PULSE
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to make your own - whether you start from scratch or paint over an exisiting piece.
Click here to read the full article
