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M A R K E T
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P U L S E
C21
PUBLISHER Century 21 Australia Pty Ltd
CONTRIBUTORS Chris Gray Tim Lawless REI Super
EDITORIAL ENQUIRIES Century 21 Australia (02) 8295 0600
ADVERTISING ENQUIRIES Century 21 Australia (02) 8295 0600
WELCOME TO THE
June 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: Spacejoy on Unsplash
C O N T E N T S J une
AGENT FEES
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SELLING
Why avoiding paying fees could be a false
The two hotspot rooms that sell homes
economy
Century 21
Your Empire CEO, Chris Gray
INVESTMENT DEPRECIATION
PROPERTY MARKET UPDATE
04
How to get the most out of your investment property Century 21 and BMT Tax Depreciation
CoreLogic Home Value Index records first national fall since September 2020, as declines accelerate across Sydney and Melbourne in May CoreLogic Head of Research, Tim Lawless
SUPERANNUATION 07 How you can boost your super REI Super C21 MARKET PULSE
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AGENT FEES
WHY AVOIDING PAYING FEES COULD BE A FALSE ECONOMY
B Y C H R I S G R A Y, C E O, YO U R E M P I R E
No one likes paying fees. Our parents idea of wealth creation was to ‘look after the pennies and the pennies will look after the pounds’ and ‘why pay someone else, if you can do it yourself?’ Their generation was very much about doing everything yourself and controlling how much money you spent. Times have changed though.
a specialist that does that particular
advert, open up your home, write
We don’t repair TVs and washing
task all day every day and can do it
down some names and numbers
machines these days, we simply
better than you in half the time.
and then agree a price. If it’s your
throw them away and buy a new one as labour is so expensive and technology changes so quickly, it would be out of date anyway.
When it comes to property, paying fees can be a very expensive exercise given that a typical sales agent charges 2% + GST which
home, surely, you’re going to negotiate harder than an agent who just wants to move on to the next listing?
In a similar vein, the thought
can add up to $25k - $30k on a
There is some logic in that thought,
process of today is that you can’t
$1m property when you add in the
however the reality is, most buyers
be an expert at everything and so
advertising and auction fees. That
don’t like discussing buying
you’re better off spending an extra
can lead some sellers to be tempted
a property with an owner. They feel
hour doing what you do best at
to try and sell their own home.
they can’t speak openly about the
your job and outsource a task to
How hard can it be? Put up an
pros and cons for fear of insulting the seller and the owner might tell them anything to get a sale. That’s why so few properties are on the ‘for sale by owner' sites. Sure, there may be more in regional or remote areas, but you don’t get many around the more expensive city areas as buyers like to go with the norm. Not that anyone really cares, but sales agents do actually work hard, and they put in more hours than a typical blue-collar worker or suit in the city. They are often doing deals late at night or on the weekends
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and they’re lucky to get a whole day
simply don’t give them the right
Is that professional advice that gives
off. Their value though is in their
brochure at the right time, suddenly
you an extra 1% growth or $10k per
marketing, the presentation of the
you’re in the wrong and haven’t got
year for the life of the property
property, bringing in competition
a leg to stand on.
worth something?
Legalities aside, I would say that in
Rather than go to the extreme
95% of cases, a property manager
of selling, buying, or renting a
will either save you double their
property yourself, an alternative
annual fee in having less vacancy
could be to simply pick a cheaper
or by being able to keep the rent
agent but is that a false economy
at market rates rather than
too? Well given the examples
a discounted rate.
above, an average agent will buy
and then negotiating a higher price. An average agent can sell a $1m property for $1m, but a great agent could sell it for $1.05m - $1.1m. Who cares what their fee is if they net you extra cash? I know many wouldn’t agree with me, but I would argue that an owner occupier might sell that $1m property for $950k. They celebrate the fact that they’ve saved the $25k agents fee but really, they’ve lost more and it’s a false economy. Even if they did sell it for $1m, they’re still potentially down by $25k - $75k on where they could have been with a great agent. The same thought process extends to property management and buyers agents fees.
Buyers agents typically charge the same 2% + GST fee as sales agents, however it seems much easier and common to be able to buy your own property rather than go through the process of selling a property.
consider asking yourself these
Yes, it does look that way at first
1. How will I do this job compared
to the sales agent proposition when
to a professional that does it all
you have been in the industry for
day, every day?
heard one say, “I’ve got such great
hassle, will they actually save
tenants, they’ve been with me for
you any money?
10 years and you’re under renting it. They know they’re on to a good thing and that’s why they pay the rent. Tenants have so many legal rights these days, I wouldn’t manage my own properties just for that reason. How well are you going to manage your property through COVID and the multiple requests for discounted or free rent and when you stand in front of a tribunal, how well do you know the law compared to your tenant? If you
questions
glance, but it’s actually very similar
might save you some time and
probably haven’t out the rent up in
the half price agent?
of paying any professional, maybe
properties. So many times, I’ve
or they get kicked out and (2) you
to save $10k on a fee and go with
that $20k - $25k?
you a property and whilst they
they are legally responsible to do,
transaction. So, do you really want
is it better to do it yourself and save
rent out and manage their own
pay the rent on time (1) that’s what
you $50k - $100k on the same
So, the next time you’re thinking
a while. Any buyer’s agent can buy
the rent on time.” No wonder they
a great agent might make or save
So surely when it comes to buying,
Some investors believe they can
over 10 years, and they always pay
or sell a $1m property for $1m, but
If you’re trying to buy a $1m blue chip property in a blue-chip
2. Why would this professional be charging half of what everyone else is charging? 3. Do I want the cheapest professional or the best professional?
location from a great agent, you’ll often have to go to auction and end up paying $1.05m - $1.1m under competition. So, what if a great buyer’s agent could buy you that same property off market or preauction for $1m? Are they worth that $25k then?
ABOUT THE CONTRIBUTOR Chris Gray is CEO of Your Empire, a buyers’ agency that buys homes and investments
And what if that great buyer’s agent could turn you off that brand new wonderfully looking property, that’s actually in a poor location,
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
has some major defects and/or is
he’s interviewed various heads of property
overpriced and get you into a much
research companies and major industry
better located ugly duckling that has renovation potential and will perform better over the long term. C21 MARKET PULSE
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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
P R O P E R T Y M A R K E T U P DAT E
CORELOGIC HOME VALUE INDEX RECORDS FIRST NATIONAL FALL SINCE SEPTEMBER 2020, AS DECLINES ACCELERATE ACROSS SYDNEY AND MELBOURNE IN MAY
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
Housing markets lost more steam in May as a combination of higher interest rates, rising inventory levels and lower sentiment dampened conditions. CoreLogic’s Home Value Index (HVI) showed Sydney (-1.0%) and Melbourne (-0.7%) dwelling values continued to record the most significant month-on-month falls, while Canberra (-0.1%) recorded its first monthly decline since July 2019. Although housing values continued
-0.8%, with housing values now
momentum in most markets.
to rise across the remaining capitals,
9.8% higher compared to the
Perth and Adelaide were the
the growth was not enough to
pre-COVID level.
exceptions, where the quarterly
offset the depreciation in Sydney, Melbourne and Canberra, which pushed the combined capitals index -0.3% lower over the month.
Canberra, Australia’s second most expensive property market behind Sydney, has experienced
growth trend lifted in May, although both regions remain below the peak quarterly rate of growth.
nearly three years of consistent
CoreLogic’s Research Director Tim
Sydney has been recording
positive growth and although
Lawless said despite the 0.5% rise
progressively larger monthly value
dwelling values increased 2.2% in
in housing values across Australia’s
declines since February, while
the three months to May, softer
combined regional areas, it was not
Melbourne has fallen across four
house values and affordability
enough to keep the national index in
of the past six months.
constraints are likely to have had an
positive monthly territory, with the
impact. Accounting for the marginal
national HVI down -0.1% in May, the
decline evident in May, Canberra
first monthly decline in the national
housing values remain 37.9% higher
index since September 2020.
Since peaking in January, Sydney housing values are down -1.5%, but remain 22.7% above preCOVID levels. Comparatively,
vs. pre-pandemic levels.
Click here to read the full article
Melbourne, which experienced a
Outside of Sydney, Melbourne and
softer growth phase, has recorded
Canberra, growth trends remained
a smaller peak-to-date decline of
positive in May, albeit with less C21 MARKET PULSE
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WE ARE ABOUT PEOPLE NOT JUST PROPERTY
At Century 21 it’s not just about selling a property. It’s about finding the right buyers and delivering the best sale results for our customers. Contact your local C21 Agent today for your no obligation FREE property appraisal. Visit: C21.com.au
WHAT WILL HAPPEN TO PROPERTY AFTER FREEDOM DAY?
Paying less in fees means you end up with more
REI Super no longer charge a monthly dollar admin fee so you can grow your super faster. We have changed and reduced our monthly fees so more money stays in your super – or your pension account. Switch to REI Super for lower fees for real estate professionals.
Switch now at reisuper.com.au/low-fees
This information may be general advice, which does not take into account your personal objectives, situation or needs. Before making a decision about REI Super, consider your financial requirements and refer to the relevant Product Disclosure Statement (PDS). REI Superannuation Fund Pty Ltd ABN 68 056 044 770, AFSL 240569, RSE L0000314 Trustee of REI Super (ABN 76 641 658 449), RSE R1000412 REIS 7523
S U P E R A N N U AT I O N
HOW YOU CAN BOOST YOUR SUPER BY REI SUPER
THE NEW FINANCIAL YEAR IS THE PERFECT TIME TO START SPEEDING UP YOUR SUPER SAVINGS
interest on your contributions,
There’s more than one way to
plus interest on your interest!
top up your super
Adding extra to your super now
the more benefit you get - but it’s
can make life so much more
never too late to start.
comfortable once you stop working - whether it’s $20 a week pre-tax via salary sacrifice, or an after-tax lump sum due to downsizing, selling shares or earning commissions. Salary sacrifice and save on tax Starting regular super contributions via salary sacrifice means that these pre-income tax contributions only get taxed at 15%, rather than at your personal tax rate (up to 45%). This means more money for you, not the taxman. Earn interest on interest and watch your balance grow Over your working life, the interest that your super earns each year earns interest as well. So you get
Obviously the longer you contribute,
Catch up on contributions If you have a total super balance of less than $500,000 from the previous financial year, you can carry-forward any unused concessional caps on a rolling 5-year basis. This means if you don’t contribute the maximum annual allowable amount into your super, you can increase your contributions in following years by those unused
It’s time to get savvy and familiarise yourself with the multitude of ways you can grow your super. Start thinking outside the box, did your partner get a pay rise or bonus this year, do the grandparents always give you cash on your birthday…remember every single dollar in your super account is earning you interest, plus your interest is earning you interest! If you are putting some extra money into your super, the government might chip in too!
amounts (for a maximum of five
Get on board and start creating
years, after which they will expire)
a better retirement for you.
by using the carry-forward rule.
Click here to read the full article
This rule applies from 1 July 2018. This means that the 2020 financial year is the first year in which you can top-up your super contributions by the carry forward amount. Annual concessional contribution caps (or limits): Financial year
Contribution cap
2018 - 2019
$25,000
2019 - 2020
$25,000
2020 - 2021
$25,000
2021 - 2022 onwards
$27,500
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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 does not constitute financial product advice. REI Super does not give any warranty to the accuracy, completeness or currency of the information provided. Although REI Super makes every reasonable effort to maintain current and accurate information, you should be aware that there is still the possibility of inadvertent errors and technical inaccuracies. REI Superannuation Fund Pty Ltd ABN 68 056 044 770, AFSL 240569, RSE L0000314 Trustee of REI Super (ABN 76 641 658 449), SPIN REI0001AU, RSE R1000412. MySuper unique identifier 76641658449129. May 2022.
SELLING
THE TWO HOTSPOT ROOMS THAT SELL HOMES When selling your home, it's important to make sure that the spaces which have the biggest impact on buyers and will add the most value are upgraded and looking their best. Not surprisingly, the most closely
for family and friends, a place to
can have a big impact and are an
inspected and anticipated rooms
relax and chat, and a room where
inexpensive way to change the
of a property are the kitchen and
memories are made.
look of your kitchen without any
master bathroom.
major financial outlay.
In this article, we'll give you some
I F YOU ARE UNSURE OF WHO
tips on how to upgrade these
YOUR TARGET BUYER IS, IT’S
spaces without breaking the bank!
BEST TO CONSULT WITH A REAL
DO YOUR HOMEWORK Making upgrades without knowing your target buyer can be costly and may not result in a higher sale price. It’s important to do your research and plan ahead if you want to get the most out of your home sale.
ESTATE AGENT WHO CAN HELP YOU UNDERSTAND YOUR LOCAL MARKET.
3. Add some new lighting: Some new fixtures or even just changing out the bulbs can brighten up your kitchen space and make it look more inviting. 4. Update the appliances:
When preparing your home for sale, ensuring the kitchen looks its best should be your #1 priority. There are plenty of cost-effective
Replacing old and outdated appliances can significantly improve the look of your kitchen. But if you're not ready for a full replacement, try painting them
Upgrades to your kitchen or
upgrades that will improve the look
bathroom are often specific to the
of your kitchen without breaking
type of buyer you are targeting. If
the bank. Here are four ideas to get
you are unsure of who your target
you started:
MASTER THE BATHROOM
1. Paint the walls: A fresh coat of
The master bathroom is a place
buyer is, it’s best to consult with a real estate agent who can help you understand your local market.
KITCHEN QUICK WINS For most people the kitchen is one of the most important rooms in their home. It's not just a place to cook – it's also a gathering spot
or adding new hardware to give them a fresh look.
paint is one of the quickest and
where homeowners can relax and
easiest ways to give any room a
escape the stresses of the day, so
facelift. Choose a light, neutral
it's important to make it appealing
colour will help make your
to potential buyers.
kitchen look bigger and brighter. 2. Replace the hardware: Cabinet knobs and drawer pull updates C21 MARKET PULSE
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By making small changes, you can dramatically improve the look and feel of your bathroom.
Photo by R ARCHITECTURE on Unsplash
Most of the updates to your bathroom are similar to what you can achieve in your kitchen so think about how these two spaces can share the costs. For example, choose a paint colour that works in both rooms. Here are five quick ideas to get you started: 1. Paint the walls a light, neutral colour.
2. Update the hardware on the cabinets and fixtures.
spending money on upgrades; on the other hand, if you don’t spruce
3. Install a new shower curtain and liner. 4. Add some new towels and a bath mat to the bathroom.
up these key interiors, your home might lag on the market. Consulting a local property expert at the start of your selling process
5. Place a vase of fresh flowers
will make a big difference to your
or indoor plant(s) on the
sale outcome and experience. Our
bathroom counters.
C21 agents are happy to help in any
If you are thinking of selling your
way to maximise your results and
home, it might seem hard to justify
achieve your property goals.
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LANDLORD INSURANCE
Frustrated with your existing Insurance Policy? Are you tired of delays, excuses and claim settlements reduced or declined?
We guarantee one of the best and most comprehensive landlord policies in the market at the most competitive pricing.
Start getting real value from your insurance today.
Full Accidental loss or damage cover
Why not, you’ve paid for the policy right?
Flood cover
With Landlord Insurance - Cover Guard Insurance has you covered.
Rent Default
We do not include delays, or excuses within our program. We are there when you need us most to ensure your claim is settled fast.
Loss of Rent cover up to 24 months and up to $2,000 rent per week
Cover Guard Premiums Our premiums are fixed by state and territory. These figures do not account for extra costs associated with extensions to the standard cover limits.
NSW
$430
QLD
$360
SA
$325
TAS
$300
VIC
$360
WA
$325
ACT
$385
NT
$420
Get the right advice for full peace of mind when it comes to your Landlord Insurance.
Cover Guard Insurance Pty Ltd (CAR 1280249 | ABN 94 637 331 241) Corporate Authorised representative of Community Broker Network Pty Ltd | AFSL 233750 | ACN 096 916 184
At Cover Guard
we always have you covered
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I N V E ST ME N T D E P R E C I AT I O N
HOW TO GET THE MOST OUT OF YOUR INVESTMENT PROPERTY If you're an Australian property investor, you'll want to make sure you're getting the most out of your investment. A property investment depreciation schedule can help you do just that! In this article, we'll guide you
to property investors because you
Depreciation is the natural wear
through the ins and out of
don’t need to spend any additional
and tear of a property and its assets
depreciation, what a depreciation
money to claim it, unlike other
over time. While all properties
schedule is and the benefits it can
deductions where money needs to
depreciate, only property investors
bring you – especially at tax time!
be spent like interest and insurance.
can claim it as a tax deduction.
WHAT IS DEPRECIATION? Depreciation is an often overlooked but important aspect of owning an investment property, so it's important to understand how it works. Depreciation is the biggest noncash property deduction available
Depreciation allows investors to D EPRECIATION IS THE SECOND LARGEST TAX DEDUCTION
recover the cost of their investment property over time.
AVAILABLE TO PROPERTY
Tax depreciation deductions are
INVESTORS AFTER LOAN
split into two categories:
INTEREST, YET 80% OF PEOPLE FAIL TO TAKE FULL ADVANTAGE OF IT.
• Capital works deductions • Plant and equipment depreciation Capital works deductions refer to your building’s structure and items that are permanently fixed within the property such as kitchen cupboards, doors and sinks. Capital works typically make up between 85-90% of the total deductions claim. Some example of items that can be claimed are: • Built-in kitchen cupboards • Doors, locks and door handles • Clothes lines • Bricks, mortar, walls, flooring and wiring • Driveways • Fences and retaining walls
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• Sinks, basins, baths and
PROPERTY DEPRECIATION YOU CAN CLAIM
toilet bowls Plant and equipment assets are items which are easily removable
First full financial year claim
Property type
or mechanical in nature – property
Cumulative five year claims
Brand-new
owners can claim depreciation for the wear and tear of these assets.
2 bedroom unit
$10,880
$45,703
Some example of items that can
3 bedroom house
$13,104
$55,042
4 bedroom house
$16,100
$67,627
be claimed are: • Air-conditioning units
Second-hand
• Blinds and curtains • Hot water systems, heaters,
2 bedroom unit
$6,558
$27,551
• Security systems
3 bedroom house
$7,380
$31,000
• Light fittings
4 bedroom house
$9,020
$37,900
solar panels
• Swimming pool filtration and cleaning systems
First five years, calculated on a 37% tax rate.
BENEFITS OF CLAIMING DEPRECIATION
You may also be able to claim back
property, so we’ve partnered with
There are several benefits to
missed dollars by adjusting previous
Australian experts in property tax
claiming depreciation on your
tax returns if your depreciation
depreciation, BMT Tax Depreciation
investment property, including:
schedule identifies deductions you
to provide you with an exclusive
• Reducing your taxable income
may have missed or haven’t claimed
discount offer.
• Maximising your return
previously.
BMT is offering a reduced fee of
on investment
$715 inc GST on single residential
• Lowering your tax liability
A PROPERTY TAX DEPRECIATION
tax depreciation schedules
If you're looking to get the most
SCHEDULE LASTS THE LIFETIME
(normally $770).
out of your investment property, a property investment depreciation
OF THE PROPERTY AND IS AVAILABLE FOR A ONE-OFF FEE
To claim this reduced schedule fee visit BMT Tax Depreciation today
schedule is a valuable tool.
IS 100% TAX DEDUCTIBLE.
WHAT IS A DEPRECIATION SCHEDULE?
It is highly recommended you work
A depreciation schedule is a
preparing depreciation schedules
report that outlines all available
for your property to really maximise
Note: Referral and affiliate fees are
tax depreciation deductions for a
the deductions you can make.
not sought or paid to anyone in the
residential investment property
They know every item that can be
exchange of depreciation services.
or commercial building. Most
claimed, and just as importantly
We receive no financial benefit for
properties, new and old, have
those that can’t be. They will also
recommending BMT.
depreciation available.
work with your tax accountant,
A well prepared schedule can
saving you both time and
provide you with a 40 year forecast illustrating all depreciable items along with both prime cost and diminishing value methods of depreciation to help you decide which method is best for you.
with a company that specialises in
hassle.` The one-off schedule fee you pay is 100% tax deductible and lasts the lifetime of the property.
EXCLUSIVE OFFER At Century 21, we want you to get the most from your investment C21 MARKET PULSE
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and enter promo code: CE11 If you order before June 30 and you can claim your fee back this financial year.
You can find more Property Investing Tips and Advice here.
