2 0 1 8
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 Charles Tarbey Tim Neary Tim Lawless Chris Gray Bradley Beer Carolyn Parrella, (Terri Scheer Landlord Insurance)
EDITORIAL ENQUIRIES Century 21 Australia (02) 8295 0600
ADVERTISING ENQUIRIES
WELCOME TO
THE SEPTEMBER 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 S E P T E M B E R
CHAIRMAN STATEMENT
02-03
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SPLASH YOUR DEPRECIATION CASH
Market woes reveal new challenges for
Ways to splash the extra cash from
first home buyers.
depreciation.
Century 21 Chairman, Charles Tarbey
BMT Tax Depreciation, Bradley Beer.
HISTORIC MARKETING PUSH
04
PROPERTY INSPECTIONS
C21 launches countrywide campaign.
Making the most of rental property
Real Estate Business Journalist, Tim Neary
inspections.
08-09
10-11
Terri Scheer Landlord Insurance.
HOUSING CORRECTION
05 THE POWER OF PAINT
Housing deepens with falls across most cities.
Paint – the renovator’s friend.
Corelogic Head of Research, Tim Lawless
EDUCATING YOURSELF
06-07
Are you too old to keep learning? Your Empire CEO, Chris Gray.
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C H A I R M A N STAT E ME N T
MARKET WOES REVEAL NEW CHALLENGES FOR FIRST HOME BUYERS
B Y C H A R L E S T A R B E Y,
CHAIRMAN CENTURY 21 AUSTRALASIA
National dwelling values were down for the eleventh consecutive month in August and this result may leave many people wondering what the traditionally busy spring market will hold. In the current market, downsizers,
thinking about reining in some
The biggest impact has come
first home buyers and investors
of the current first home buyer
from the Royal Commission. The
are seeing pockets of value across
incentives.
number of loans rejected has
the market. However, tight credit conditions are making it tough for many to borrow.
Opportunities for first home buyers and downsizers are now in abundance however,
Interest in real estate never seems
first home buyers
to abate. The media is always able
may face a new
to find a good headline, whether it’s
challenge in
covering a boom or a falling market.
the form of
There is no doubt that a change in
Interest rate
this mean disaster for everyone?
hikes, which
Not so long ago, various state governments were very vocal on how they were focused on affordability issues. With prices falling in many markets, there seems to be less of this type of chatter at present. This suggests to me that governments may be
unable to secure a loan.
and investors
“The number of loans rejected has spiked significantly leaving many first home buyers out of pocket....”
I believe the banks
are being encouraged to refinance their loans if their bank is independently raising rates, but a recent
have started
survey from Digital
delivering now to
Finance Analytics
avoid being seen as unfriendly around Christmas time, and the Royal Commission into banking, have had a very noticeable impact in the market.
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first home buyers out of pocket and
Many homeowners
the banks.
the market is happening but does
spiked significantly leaving many
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showed that this may be a lot harder than many people think. The survey suggested that around 40 per cent of people that tried to
refinance a property loan recently were unable to do so. In my view, tight lending
Y E A R - O N -Y E A R D E M A N D B Y C A P I TA L C I T Y
conditions will negatively impact property values moving forward. If government intervention does not occur to rectify the imbalance, property values will be impacted
4.7%
even more in the future and negative equity, particularly for buyers who purchased within the last 24 months, may become a major issue.
NT
5.9%
6.4%
QLD
WA
2.7% SA
If we see a situation where interest
-22.5%
rates are rising and property values
NSW
are declining, I fear that thousands of property owners will become financially stressed which is not good news for the market. It’s fantastic that many affordable buying opportunities are presenting in the current market but it’s also important that people can attain finance to take advantage of them.
Demand for properties is calculated from the average number of times properties in that area are viewed on realestate.com.au in the past quarter. Source: Realestate.com.au Australian Property Report July 2018. Data obtained by RP Data Pty Ltd trading as CoreLogic Asia Pacific.
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16.2% ACT
-6.1% VIC
38.6% TAS
HISTORIC MARKETING PUSH
C21 LAUNCHES COUNTRYWIDE CAMPAIGN Century 21 has launched the largest marketing campaign in its history, which has already reached over two million Australians. Running in every state and territory, the campaign showcases the company’s new brand while challenging consumers to expect more from real estate agents.
B Y T I M N E A R Y, JOURNALIST AT R E A L E S TAT E B U S I N E S S
powerfully reposition the C21
branding and to better project a
brand to better reflect what the
modern image to consumers.
business stands for and to
“So far, the results
challenge consumers
“The new multichannel campaign is reaching thousands of potential buyers and sellers of real estate each day...”
to expect more from us. “We have already begun to see heightened levels of interest in the network at a strategic time as we lead into spring.”
The campaign’s visuals and message are currently being seen on buses and outdoor billboards, in cinemas and shopping centers, online and on Australian television channels. Century 21 chairman Charles Tarbey said that the initial reaction to the campaign had been positive. He said that he expects the buzz around the new brand to build as the campaign deepens.
have been very pleasing and we expect that this substantial marketing investment will benefit our network for years to come,” Mr Tarbey said.
The campaign follows
The rebranding is taking
Century 21’s global parent unveiling
place across all 80 countries that
an international rebranding
Century 21 operates in, making it
campaign at its recent Masters
one of the most momentous events
event in Orlando, Florida.
in the business’ nearly 50 years of
Global president and CEO Nick
operation.
Bailey welcomed the substantial change of the logo with its refreshed colour palette. The company received global recognition for the change by winning the most innovative
“The new multichannel campaign
marketing campaign at the Inman
is reaching thousands of potential
Innovator Awards in the United
buyers and sellers of real estate
States.
each day,” Mr Tarbey said.
from the campaign
To coincide with the Australian
“While the campaign aims to
campaign, Century 21 offices across
drive traffic to our offices across
Australia are being renovated and
Australia, it is also designed to
refreshed to align with the new
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The story C21 launches countrywide campaign, tells consumers to get more from agents, fi rst appeared on Real Estate Business (REB). Article Link: https://www.realestatebusiness.com.au/ breaking-news/17669-c21-launchescountry-wise-campaign-tells-consumersto-get-more-from-agents
HOUSING CORRECTION
HOUSING CORRECTION DEEPENS WITH FALLS ACROSS MOST CITIES
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
National dwelling values were down for the eleventh consecutive month suggesting spring selling conditions may deliver a challenge amidst rising advertised stock levels, tight credit and indications that mortgage rates are tracking higher. Australia’s housing market correction continued through August with the CoreLogic National Home Value Index tracking 0.3% lower over the month. Since peaking in September last year, dwelling values have been consistently tracking lower, down a cumulative
Five of the eight capital cities
concentrated in Sydney and
recorded a fall in dwelling values
Melbourne where dwelling values
over the month, highlighting the
were previously rising the fastest,
weak housing market conditions
but have now fallen 3.5% and 3.3%
are broad-based. The only cities
respectively over the first eight
where dwelling values edged higher
months of the year. Considering the
in August were Adelaide (0.3%),
sheer size of the cities; Sydney and
Darwin (0.1%) and Canberra (0.5%).
Melbourne comprise approximately
Focusing on the three month trend shows Melbourne is now Australia’s weakest capital city housing market, with dwelling values falling 2.0% over the three months ending August; the weakest rolling
60% of Australia’s housing market by value, and 40% by number, the weaker performance in these cities has a significant drag down effect on the combined capitals and national reading of the market.
quarterly result since the three
The regional markets have also
months ending January 2012. Perth
continued to weaken, with values
isn’t far behind, with values down
slipping lower for the second
1.9% over the past three months,
consecutive month across the
reversing the temporary positive
combined rest of state index to
2.2% through to the end of August.
movements recorded earlier in
be down 0.2% over the month and
the year.
0.6% lower over the rolling quarter.
CoreLogic head of research Tim
Adelaide rose to the top of the
Lawless said, “Weaker housing market conditions can be tied back to a variety of factors, foremost of which is the tighter credit environment which has slowed market activity, especially amongst investors. Fewer active buyers has led to higher inventory levels and reduced competition in the market. Collectively, these factors have been compounded by affordability challenges, reduced foreign investment and a rise in housing supply.”
quarterly performance stakes over the three months to the end of August, taking over from Hobart where values have posted two consecutive months of subtle falls. Adelaide dwelling values were half a percent higher over the past three months, with quarterly gains also recorded in Canberra (+0.4%) as well as Hobart and Brisbane, both up +0.1%. Over the year to date, the weakest housing market conditions are
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Regional areas of the mining states continue to deliver the most significant drag on the headline growth rates, with values down 3.5% over the past three months across regional WA and 1.0% lower across regional Queensland.
E D UC AT I N G YO U R S E L F
ARE YOU TOO OLD TO KEEP LEARNING? B Y C H R I S G R A Y, C E O, YO U R E M P I R E
Most people finish their formal education when they leave school, some carry on to university and a few go all the way to an MBA. But how many continue on beyond that and commence an education in personal wealth or property, as that’s where the real money could be hiding?
99 per cent of most people’s
it doubled every 15 years, or $10-
education is built around trying
15m+ if it doubled every 10 years.
to get a job and building that into
If it was your home then it should
a career. When the average full-
be capital gains tax free and if it
time wage is around $80k and
was an investment, you should get
the median wage for all workers is
another 2 per cent net rent which
$55k, assuming you work from 18
will give you another $1-2million.
to 65 that would roughly equate to $2.5m to $4m of income you earn in 47 years. Take tax off and you’re left with a lot less.
So, if your main family home or investment property can easily earn more than you do in a lifetime, how much energy and effort should
If the median property price is
you be putting into your personal
currently $870k in Sydney and
wealth education versus that of
$556k nationally, that same
your career?
property could be worth $5-7m+ if
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$1m to spend. Live until you’re 80
The economy and property market
or 90 and that could be another
are constantly changing and so we
$2-3m in additional wealth. If you
all need to change with the times.
give it a go, at least you’ve got a
An education is for life, not just
chance of success. Do nothing and
for school and those that are more
1. ADVICE AND EDUCATION ARE WORTH WHAT YOU PAY FOR IT.
you’ve got a 100% chance of not
active with education, often have
succeeding.
a higher chance of success than
If you get some free information
4. YOU CAN’T BE AN EXPERT AT EVERYTHING.
CHRIS GRAY’S ADVICE FOR EDUCATING YOURSELF FURTHER:
or advice, then its value to you is often equal to what you’ve paid for it i.e. nothing. Free information is normally either biased or it’s marketing to get you to do something else that does cost you money.
2. IT DOESN’T HAVE TO COST A FORTUNE. Books can be an excellent source of education and the only real cost is you putting in some time to read them, take notes and then to act on them. If you are really short of money, every book should be available from your local library and if you’re short of time, then audio
those that bury their heads in the
There’s no way you can be a qualified accountant, lawyer, financial adviser, mortgage broker and buyer’s agent all at the same time. But you don’t need to be. The
sand. Just remember, if nothing changes, nothing changes.
Note: The numbers used in this
article are for indication puroposes only and do not consider personal circumstances, tax, ability to cash
person that creates the wealth is
flow a property and service a
the one that makes the decisions
loan. For more accurate numbers
i.e. you. It’s good to have a bit of
seek the services of accountants,
knowledge around all the skillsets
mortgage brokers and buyers’
above so you know how to converse
agents that are suitably qualified
on those topics, but you don’t
property professionals.
have to be a specialist. Think of yourself as the CEO of a business, surrounded by your heads of marketing, accounting, distribution and sales – you just need to be the manager.
books could be the way to go for you. You will still need to get some real-life advice from an adviser but you should be able to get 80 per cent there by yourself.
5. CONCENTRATE ON WHERE YOU GET YOUR EDUCATION FROM. Friends, colleagues and family are the most common sources of
3. IT’S NEVER TOO LATE TO START LEARNING. Even if you’re 60 years old it’s not too late, as long as you’re expecting to live another 5 – 10 years+. Assuming you think the property market is going to continue to grow over the short to medium term then that 10 years could be another property cycle. Buy an additional $500k – $1m property and that will ideally give you another $500k –
ABOUT THE CONTRIBUTOR Chris Gray is CEO of Your Empire, a buyer’s agency which builds property portfolios for time-poor people – searching, negotiating,
information as we think we can
renovating and managing property on their
trust them. But are they qualified
behalf. Chris’s team buys 1-2 properties
to give us advice? I would suggest that you should get advice from someone that has got what you
a week and often spends $5m+ a year renovating on others’ behalf, providing a unique insight into market conditions and buyer and seller sentiment. Chris hosts
want (i.e. wealth, freedom, choice).
“Your Property Empire’ each Friday on
Our parents always used to go to
Sky News Business channel, where he
the bank manager for property advice, but as full-time employees that concentrate on protecting the
interviews 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
bank’s money, are they the best to
www.yourempire.com.au,
advise on what creates wealth so
www.chrisgray.com.au and follow Chris on
you can leave your full-time job?
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Twitter: @ChrisGrayEmpire.
S P L AS H YO U R D E P R E C I AT I O N C AS H
WAYS TO SPLASH THE EXTRA CASH FROM DEPRECIATION
BY BRADLEY BEER, B M T TA X D E P R E C I AT I O N
Once an investor starts claiming depreciation, they can expect an improvement in their cash flow. This is because depreciation essentially lowers taxable income, meaning more money back in an investor’s pocket at tax time. For most people, the extra cash from a tax return is put into savings, towards a holiday or a new car, or put towards everyday living expenses. But as an investor, there are smarter ways to use the extra cash you will make from depreciation.
HERE ARE JUST A FEW: PAY OFF YOUR DEBTS First things first, if you have any major outstanding debts, this may be a good chance to reduce or eliminate them. While a Financial
This means that if one area suffers, you still have a stake in another area that is growing. Ideally, this will offset significant financial losses. For example, a residential investor might look to invest in shares, bonds or even venture into the world of commercial property.
Advisor can advise which debts you should be paying off first according to your own financial situation,
GROW YOUR PORTFOLIO
things like credit card debts (which
Most investors will stop at one
often have very high levels of
property but if you have the means,
interest) or personal loans could
you can experience greater returns
be a good starting point.
by growing your property portfolio. Carefully consider whether this works for your financial situation
DIVERSIFY YOUR PORTFOLIO
and fits in with your investment goals.
Most Financial Advisors will tell you that diversifying is a great way to minimise risk and is important for long-term financial success. When you have a diverse portfolio, these different investments are likely to react differently to the same event.
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As always, do some proper research to ensure you’re investing in the right area and the right property to maximise capital growth and rental returns.
BOOST YOUR SUPER
This could potentially boost rental
decisions to determine the best
returns and increase the overall
course of action for your individual
It’s never too early to plan for your
value of the property.
circumstances.
retirement. If you’d like a similar standard of living once you retire, it’s likely you’re going to need to make some voluntary payments on top of what your employer pays. This money is concessionally taxed,
EXPAND YOUR BUSINESS If you’re a commercial property investor or running a business as the tenant, extra cash never goes
will generally be locked away until
astray.
you retire and you’ll benefit from
Depending on how the business is
compounding returns over time.
performing you could use this extra cash to expand or invest in other
DO SOME RENOVATIONS ON YOUR INVESTMENT PROPERTIES
parts of your business. For example, this may give you the funds to upgrade your business equipment or start expanding into a new area.
Is your investment property a bit run down, in need of some better appliances or just crying out for a fresh coat of paint? Well this is your chance to change that. Using the extra cash from depreciation to improve your current property is a great idea, provided you don’t overcapitalise.
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. Bradley joined BMT in 1998 and as such he
CONSULT WITH AN ADVISOR Please note that these examples are general in nature and do not take into account your personal situation. As always, you should
has substantial knowledge about property investment supported by expertise in property depreciation and the construction industry. Bradley is a regular keynote speaker and presenter covering depreciation services on television, radio, at conferences and
consult with your Financial Advisor
exhibitions Australia-wide.
when making such financial
Please contact 1300 728 726 or visit www.bmtqs.com.au
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PROPERTY INSPECTIONS
MAKING THE MOST OF RENTAL PROPERTY INSPECTIONS The benefits of routine rental property inspections are often untold. They shouldn’t be a source of frustration but seen as an invaluable opportunity to ensure the upkeep of your investment property and that your tenant enjoys their rental experience.
BY TERRI SCHEER LANDLORD INSURANCE TIMEFRAMES
MAINTENANCE ISSUES AND REPAIRS
Legislation differs from stateto-state, but generally it is
Tenants may use the rental property
recommended rental inspections be
inspection as an opportunity to raise
held once every three months.
concerns or request maintenance to the property.
Quarterly rental property inspections give landlords an
If the tenant will not be present at
opportunity to build rapport with
the rental property inspection –
their tenants and identify any issues
they may be at work for example
before they escalate, while tenants
– landlords should contact them
can raise any concerns.
ahead of time to discuss any issues.
Rental property inspections help
Landlords must give tenants a
This could include identifying
landlords ensure their investment is
minimum of seven days’ notice
leaking taps or consumables to be
being well cared for and to monitor
before completing a rental
replaced such as light globes or
for any maintenance or health and
inspection. It may be worthwhile
water filters.
safety issues.
planning a full year of inspections
At the same time, landlords should respect that for the tenant, the rental property is their home. They too should have an opportunity to
in advance, so that they are not forgotten by the landlord and an inspection organised at short notice doesn’t cause renters undue stress.
If any tenant-related issues are identified during the rental property inspection, landlords must serve the tenant with a Notice to Remedy. This should outline the problem and by when it needs to be rectified.
voice any concerns.
Examples include damage, unkempt gardens and additional cleaning requirements.
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RENTAL INSPECTION CHECKLIST
and free from food splatters, overflow or built up grime.
• Monitor for signs of termite damage and rust.
Buying a good quality vacuum will There are many different areas to
go a long way to building rapport
consider when completing a rental
with the landlord for pet owner
property inspection. For example,
tenants.
It’s important that landlords
landlords should ensure the tenant
provide their tenants with a Notice
keep the home reasonably clean
to Remedy as soon as possible
while tenants should raise any
after the inspection, if issues are
maintenance issues outside of
identified with the home, such as
their responsibility, such as
cleanliness. The tenant should be
faulty built-in appliances
given 14 days’ notice to rectify
and age or weather-related
the issue before further action is
problems.
taken. Any maintenance issues
Tenant-specific matters:
identified by the landlord, or raised by the tenant, should
• Check for general
be responded to in a timely
condition and cleanliness
manner. Leaky taps and squeaking
– for example, carpets,
floorboards are not considered
walls, doors, floors,
urgent, however broken windows
window furnishings and
and faulty appliances should be
kitchen.
rectified immediately.
• Monitor wet areas for mould and potential water damage, including kitchen, laundry, ensuite and toilets. • Check health and tidiness of garden, including lawns, trees and plants. There are some areas of the home that are often overlooked. Tenants may forget to clean or maintain
AFTER THE INSPECTION
Landlord-specific matters: • Ensure all doors and windows open, close and lock freely. • Checking for leaking taps and pipes (internally and externally) and ensure all waste water flows freely. • Check air-conditioning and water
them, while the landlords forget to
filters are clean and free from
inspect.
blockages.
Exhaust fans are a common case of
• Check weatherboard, bricks and
out-of-sight and out-of-mind. They
tiles for cracks and deterioration
are however prone to attract lint
– these could cause a legal
and dust in bathrooms and oil and
liability insurance claim against
grease in kitchens. Dirty or blocked
the landlord if falling debris
as a result of reliance upon it. Insurance issued by
exhaust fans can pose a potential
injures the tenant.
Vero Insurance.
fire risk. It can be easy to forget that ovens are a fixture of the property and belong to the landlord, not the tenant. They should be kept clean
• Look under / around the house for dampness or wood rot. • Check hot water service and cold
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
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
water supply for leaks,
for a copy.
temperature and pressure.
https://www.terrischeer.com.au/
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THE POWER OF PAINT
PAINT – THE RENOVATOR’S FRIEND Many underestimate what a simple coat of paint can do to improve a space. Whether it’s a tired room or perhaps an exterior that needs a cheap facelift. Renovating an investment property
RELATIVELY INEXPENSIVE
In the end, it’s hard to get a paint
Tins of paint can be easily
and look to deploy relatively neutral
purchased and often don’t cost very
colours. As a paint renovation can
much. They are easy to move and
be done in stages, it doesn’t have
easy to apply.
to mean the end of your weekend as well.
LOTS OF FREE ADVICE
or home can often add significant
Be it the expert at the local shop,
value to a property. However,
television of Youtube , it’s not hard
renovations (especially when they
to procure solid advice so that your
are DIY) can often be stressful,
paint job looks fantastic.
costly and miss the mark. But that doesn’t mean there are not smart renovation strategies that can
THE POWER OF COLOUR
be simple and fun to complete.
Colour has many amazing effects.
Here are three reasons why a coat
It can make a room look more
of paint can be a renovator’s best friend:
job wrong if you do your research
spacious or even contribute to a feeling of relaxation.
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DON’T SETTLE FOR AVERAGE 70% of homesellers settle for the first real estate agent they meet. Don’t settle, speak to a Century 21 agent today.
C21.com.au Source: NAR Profile of Home Buyers and Sellers, 2017