C21 Market Pulse | May 2023 | Australia

C21

WELCOME TO THE May 2023

ISSUE OF C21 M aRKET PULSE

PUBLISHER

Century 21 Australia Pty Ltd

CONTRIBUTORS

Chris Gray Tim Lawless Realty Assist Openn REI Super BMT Tax

EDITORI a L ENQUIRIES

Century 21 Australia (02) 8295 0600 a DVERTISING ENQUIRIES

Century 21 Australia (02) 8295 0600

DISCL a IMER

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.

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F URTHER EVIDENCE a USTR a LI a’S HOUSING DOWNTURN IS OVER

BY TIM LAWLESS, HEAD OF RESEARCH, CORELOGIC

After falling -9.1% between May 2022 and February 2023, Australian housing values look to have bottomed out, posting a second consecutive monthly rise. CoreLogic’s national Home Value Index (HVI) increased by half a percent in April, following a 0.6% lift in March to be 1.0% higher over the past three months.

Sydney increased 1.3% in April and is leading the positive turn in housing conditions, with dwelling values rising each month since February. Sydney values arenow 3.0% higher than the recent trough recorded in January. In further evidence that a positive growth trend has emerged, the four largest capital cities all recorded a rise in housing values over the rolling quarter.

According to CoreLogic’s Research Director, Tim Lawless, it is becoming increasingly clear the housing market has moved through an inflection point. “Not only are we seeing housing values stabilising or rising across most areas of the country, a number of other indicators are confirming the positive shift. Auction clearance rates are holding slightly above the long run average, sentiment has lifted and home sales are trending around the previous five-year average,” he said.

The more positive trend in housing values comes amid a worsening imbalance between supply and demand. “A significant lift in net overseas migration has run headlong into a lack of housing supply. While overseas migration would normally have a more direct correlation with rental demand, with vacancy rates holding around 1% in most cities, it’s reasonable to assume more people are fast tracking a purchasing decision simply because they can’t find rental accommodation,” Mr Lawless said.

“Many prospective vendors have stayed on the sidelines through the downturn, keeping inventory at below average levels and providing sellers with some leverage at the negotiation table.”

Mr Lawless said the growing expectation the rate hiking cycle is over, or nearly over, following a sharp decline in values was another likely factor supporting housing demand.

“This could be contributing to a broader perception that the market has bottomed out, and for those attempting to time the market, that it is considered to be a good time to buy,” he said.

“As interest rates stabilise there is a good chance consumer sentiment will improve, bolstering housing market activity from both a purchasing and a selling perspective.” Notably, the trend towards more positive housing market conditions has occurred while interest rates remain well above average. “The last time we saw housing values trending higher through a rising interest rate environment was during the mid-tolate 2000’s when the mining boom was underway. This period was also characterised by surging net overseas migration that contributed significantly to housing demand,” Mr Lawless said.

Click here to read the full article

M a KE yOUR PROPERT y SHINE BEFORE S a LE

BY REALTY ASSIST

If you’ve sold a home in the past, then you’re already well aware of all the hidden costs and surprise expenses that come along with it. For those of you who are selling a property for the first time though, it’s far too easy to find yourself short on funds for all the unavoidable expenses.

Sure, there’s the big three – the real estate agent’s commission, conveyancer fees, and marketing costs for listing the property. But what about things like going to auction (if you’re that way inclined), property repairs and maintenance, relocation costs and all the other fun stuff?

Investing money into the sale of your home can feel like a bit of a Catch-22 – you don’t have the funds for it right now, but the higher price you’ll fetch for your property would more than cover it. This is where RealtyAssist saves the day.

GET A CASH ADVANCE ON YOUR VENDOR PAID ADVERTISING

RealtyAssist is deeply committed to making the sale of your home as smooth, seamless and stress-free a process as possible. Your devoted real estate agent’s role is to go above and beyond to ensure you get the best price possible for the sale of your home. RealtyAssist’s role is to ensure you have the funds to get your house not just “sale ready”, but “wow factor ready”.

Perhaps you’re looking to get professional photographs taken to show your home in its best light, or take care of that roof restoration or kitchen remodel to list your home in optimal condition. Then again, maybe you’ve already sold the house, but can’t buy your next property until cash settlement (which can take months).

Whatever your reasons are for needing quick access to cash upfront, the team at RealtyAssist understands that selling your property is a complex process. Their aim is to make it infinitely easier for you by helping with what’s often the most difficult part of selling your home and moving: cashflow.

Countless Australian home-sellers have already benefitted from RealtyAssist’s VPACollect product, in which you’re advanced all the funds required to stage your home, make any necessary repairs, and list it in all the right places – popular online real estate websites, social media, glossy flyers, brochures, newspapers… you name it.

HOW DOES THE PROCESS WORK?

1. Pick your dream team! Select a Century 21 agent that you trust and list your home with them.

2. Defer your payment. You can either pay up-front OR, defer your Vendor Paid Advertising (VPA) payment.

3. You've sold your house, congratulations! Now it's time to pay back VPACollect. When you defer your VPA, RealtyAssist pays your agency up-front on your behalf, and you simply replay RealtyAssist later.* Not only does RealtyAssist cover your listing costs, but the funds can also provide extra funds for marketing, repairs, gardening, staging, and other improvements to ensure you get the best possible outcome when selling your home. Your property deserves to shine, and RealtyAssist is here to make that happen.

Need more information? Call RealtyAssist on 1300 355 729, or email service@realtyassist.com.au

*Repay at Settement, 180 days or withdrawal of property – whichever occurs first.

Defer your marketing costs with RealtyAssist.

650 customer reviews

“Can I give it six stars? Wanting to sell a house but not having the funds to show it off correctly was a worry. This system has allowed me to tidy up the place and market it well. Well worth it!”

BUY AND SELL PROPERTY WITH CONFIDENCE

With Openn you always stay informed, can see how many buyers are interested and you’ll never miss out on making or receiving that winning offer.

Find a Century21 agent using Openn:

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O NLINE a UCTION VS TR a DITION a L C a MPa IGN

BY OPENN

DOES SALES METHOD REALLY MAKE A DIFFERENCE?

New properties hit the market every day, competing for buyers' attention. Some properties will outperform their counterparts due to a number of factors, including location, condition, price and marketing.

But what if the sale circumstances of the listings were almost identical?

Two similar properties listed 3 days apart in the same price range,

with the same agent and marketing budgets, recently had a stark difference in buyer interest. Both properties were beautifully styled and located within postcode 3217 –a popular Greater Geelong hotspot.

The biggest differentiator?

One property was being sold via a traditional private treaty sales method, while the other was being sold via Openn’s transparent online auction method, Openn Negotiation.

THE RESULT

The difference in property views and enquiries is compelling:

• Property page views:

796 (Private Treaty) vs 1,761 (Openn)

• Phone and SMS reveals:

0 (Private Treaty) vs 12 (Openn)

• Email enquiries:

3 (Private Treaty) vs 10 (Openn)

Continued over page

The Openn Negotiation sales method allows bids to be accepted from as early as day one, and the current bid is able to be revealed on all online portals. This unique feature has proven time and time again to be a powerful tool for igniting interest for properties, as buyers benefit from the transparency of the process.

In comparing the total views of the two properties on realestate. com.au, interest begins to increase again around day 12 for the Openn property. This is when the agent secured their first bid of $512,000, which was advertised online and provided confidence in the demand for the property, inspiring more buyers to get involved. A total of 5 qualified bidders participated in the online sale, which culminated in the

property selling for $685,000 on day 18. At the time of writing, the other property remains on the market.

The Openn platform’s consistent ability to help both sellers and the buyers get the best outcome is what makes it such a powerful tool in any market condition.

Ultimately, no two properties are the same and there are a number of logical and emotional factors that can influence the outcome of a property sale. However, when faced with a scenario where the sale circumstances are comparable, but the results vary so extremely, it is hard to ignore the role sales strategy plays in achieving the best possible result.

THINKING ABOUT SELLING OR LOOKING TO BUY?

Search and connect with Century 21 agents using Openn on our Find an Agent portal

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WHY CHOOSE YOURPORTER

Independent – we are not aligned with or owned by any energy retailer. We have created a panel of providers to compete for your business

Freedom – stay in total control, making choices to suit your needs be it cost, product features or supplier preference

Simple – use our easy, online signup process or speak to one of our friendly consultants Our service comes at no cost and no obligation

Based in Melbourne, we are 100% Australian owned and operated

CONNECTING SERVICES HAS NEVER BEEN EASIER

STEP 1

Once referred by an agent, YourPorter will contact you via SMS, email, and/or phone.

STEP 2

Choose your service providers via the online connection platform, or with the help of one of our friendly call centre team.

STEP 3

Hedonic Home Value Index

1

yOU’RE TOO L aTE, yOU’VE MISSED IT

CoreLogic Home Value Index: Further evidence Australia’s housing downturn is over

BY CHRIS GRAY, CEO, YOUR EMPIRE

second consecutive monthly rise. CoreLogic’s national Home Value

“This could be contributing to a broader perception that the market it is considered to be a good time to buy,” he said.

“As interest rates stabilise there is a good chance consumer a purchasing and a selling perspective.”

For those that have been reading my Century 21 articles or following me on social media for the last year, I make no apology – you’ve been given plenty of warning, but you’ve missed it, and you can’t get it back.

What’s that you say? The bottom of the property market.

CoreLogic’s Research Director, Tim Lawless, an inflection point. “Not only are we seeing housing values

CoreLogic have just released their results for April 2023 and the Sydney market has risen for 3 months in a row and it’s up 3% for the quarter. Many of the other capitals have risen in the past month too.

average,” he said.

For those that were trying to bottom the market, it certainly looks as if you’ve missed that point in time that you were so eagerly waiting for.

to find and negotiate that right property and with no doubt more other buyers keen to start looking, there’s probably going to be more competition at auction. There’s a very good chance that you could be paying 5 – 10% more than you would have if you bought 6 to 12 months ago.

rates dropping over the next few years in line with inflation.

“A significant

1% in most cities, it’s reasonable to assume more people are fast tracking a purchasing decision simply because they can’t find rental accommodation,” Mr Lawless said.

“Many prospective vendors have stayed on the sidelines through the sellers with some leverage at the negotiation table.”

If you are now ready to start looking, chances are that it will still take you a few more months

Sure, interest rates did rise again this month with the RBA moving things upwards 0.25% and there may be the odd rise still to come. However, there’s much more talk about some fixed rates dropping and commentary about variable

Another positive to come into the equation for those that want to see prices rising, is the discussion about the upcoming high immigration numbers with more and more people choosing to live in our beautiful country. All those people need somewhere to live and many will flock to our major capital cities to undertake education or to get employment.

All this positive chatter affects consumer sentiment and it’s that positive sentiment that pushes property prices higher rather than

CORELOGIC HOME VALUE INDEX RELEASED 1 MAY 2023

the logical facts and figures or cash flow numbers. If people want something badly enough, they’ll find a way to buy it.

All is not lost though; this is simply the start of the next long-term cycle and upswing. Sure, if you bought a while ago it would have been cheaper than buying tomorrow, but when you look back in 5 – 10 years’ time, you should be sitting on a pretty healthy profit.

Whilst I am a believer of time is of the essence and the sooner you get in the better, you still need to ensure that you buy the right property, no matter whether you’re looking for a home, holiday home or investment.

Not all properties would have risen over the last few months, and some may continue to fall for some time

due to their oversupply and lack of demand. In my 10+ years hosting Your Property Empire on Sky News Business alongside C21 Chairman, Charles Tarbey, I interviewed hundreds of experts on what they believed would rise by more than others. Many of those findings are in my book ‘The Effortless Empire’ and so if you’re ready to take some action feel free to download a copy of the book or the audio from www.YourEmpire.com.au. There’s no cost to download.

No one can be certain what’s in store for our various property markets, but 3 months growth is a good sign that it’s likely to go up in the future rather than down. So please take note and remember, most people’s regret in life is not buying more property sooner.

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: @ChrisGraySydney

S Ta RT GETTING FIN a NCI a LLy FITTER

BY REI SUPER

and combine all your super accounts today, and you’ll also enjoy having less paperwork moving forward.

2. REVIEW INVESTMENT OPTION/S

3. MAKE EXTRA CONTRIBUTIONS

1. FIND AND COMBINE ANY LOST SUPER

There’s currently billions of dollars in lost super in Australia – some could be yours if you’ve changed names or moved jobs a lot and not taken super with you. Owning multiple super accounts means you’re paying multiple fees and (probably) multiple insurance premiums. This is money that should be boosting your super, not draining it, through the power of compounding interest. Find

Depending on how close you are to retiring and your appetite for risk, changing your investment options (or mix) could really impact how your super performs. We invest in Cash, Bonds, Shares and Unlisted Property and Infrastructure which are not open to individual investors. Each investment option has different performance objectives, risks and investment time frames, so you should choose the option/s that best suits your needs. All our options aim to outperform industry averages and benchmarks. Learn more about how we manage investments.

It may sound obvious, but making even small extra contributions to your account each month can make a big difference to the size of your super account come retirement time. The most common method is Salary Sacrifice, where money is ‘sacrificed’ from your salary before tax and put into your super to grow. This means you could also save on tax as these contributions are only taxed at 15%. Other options are making after-tax contributions, such as lump sums (commissions, payouts); low-income earners may be eligible for a Government CoContribution; or if you’ve taken time off to study or raise children, your spouse may be able to contribute to your super.

4. CHECK YOUR INSURANCE COVER

What stage of life you’re in often dictates how much and what type of insurance/s you need. For example, young people renting and with no dependents may need more TPD (Total and Permanent Disability) Insurance and less Life Insurance cover than someone with a partner, children and a mortgage.

Click here to read the full article

It's easy to neglect your super. But our Wellness Check provides simple steps that could make a big difference to your future financial well-being.

Bid farewell to the super gap

Ta X TIME TIPS FOR PROPERT y INVESTORS

BY BMT TAX

The Australian Taxation Office (ATO) has announced it will be using a new data-matching program to prevent landlords from incorrectly claiming tax deductions and failing to declare rental income and pay capital gains tax. In this article, BMT discusses some common mistakes that property investors should refrain from making at tax time.

INCORRECTLY CALCULATING PERSONAL USE

Tax deductions are only available for the period the property is genuinely available for rent. When a property is not genuinely available for rent, for example when it is being used privately, tax deductions cannot be claimed. However, investors can claim pro - rata depreciation deductions for the period their property is rented out or is genuinely available for rent. This is particularly relevant for

owners of holiday houses who also occupy the property privately.

Property investors should not claim deductions for expenses related to personal use of the property or claiming deductions for expenses that were not actually incurred. Travel expenses are a good example, since they are often claimed incorrectly. To claim travel as a tax deduction the trip must be for the sole purpose of travelling to and from the investment property. So, if a property investor is checking

on their property on the way to a holiday destination, these costs aren’t eligible to be claimed.

NOT CLAIMING TAX DEDUCTIONS CORRECTLY

Investment properties generate thousands of dollars in tax deductions each year, and claiming all tax available deductions minimise your taxable income.

The table (to the left) outlines many of the tax deductions available to investment property owners. Keeping record of all expenses related to managing and maintaining an investment property not only makes tax time easier but is a way to prove costs in the event of an audit.

FAILING TO REPORT ALL INCOME

Property investors must report all income earned from an investment property on their tax return. This includes all rental payments, bond money if retained, some types of insurance payouts, government

rebates and money paid by tenants to repair damage.

FAILING TO CLAIM DEPRECIATION

Failing to claim depreciation is the biggest mistake an investor can make. This is because depreciation is a non-cash deduction and the second-biggest tax deduction after loan interest.

Depreciation is the natural wear and tear of a property and the

assets within it. The ATO allows owners of income-producing properties to claim this as a tax deduction. Depreciation is claimable in two categories. Capital works (Division 43) deductions are claimable on the building’s structure and assets permanently fixed to the property. Plant and equipment (Division 40) depreciation is claimable on the easily removable or mechanical assets.

Claiming depreciation allows investment property owners to lower their taxable income while boosting cash flow.

BMT Tax Depreciation conducts physical site inspections to ensure that all depreciation deductions are identified correctly and claims are maximised compliantly.

To find out more about the deductions within an investment property call BMT on 1300 728 726 or request a quote.

To ensure compliance with ATO rulings and regulations, we recommend that property investors seek advice from an accountant.

Bradley Beer (B. Con. Mgt, AAIQS, MRICS, AVAA) is the Chief Executive Officer of BMT Tax Depreciation. Please contact 1300 728 726 or visit bmtqs.com.au for Australia-wide service.