Super Massive $25,000 Giveaway

September 23, 2010 Leave a comment

Throughout October, First National Real Estate is offering the chance for one lucky individual or family to update their home with $25,000 worth of brand new furniture and energy efficient appliances.

All entrants have to do is visit the First National Real Estate website, firstnational.com.au, follow the prompts, answer a couple of simple questions and submit their entry form to be in the running for the $25,000 home furnishings voucher.

‘Lots of First Home Buyers bought homes last year as a result of the stimulus package and many more Australian families are putting off the replacement of old, inefficient appliances. So, we thought we’d give one lucky family or individual a helping hand’ says Stewart Bunn, First National Real Estate’s communications manager.

First National Real Estate adopted an energy efficiency stance in 2009, providing its national network of offices with an Energy Efficiency Kit to assist its agents to reduce energy consumption in their offices and their customers’ homes.

‘An important part of the kit is a booklet printed on recycled paper that shows Australian homeowners and tenants how to lower their home’s energy bills’ says Mr Bunn.

‘The book was so popular, our office soon ran out of copies but customers can still download a copy, or see all our energy efficiency and sustainability advice, by visiting firstnational.com.au/energyefficient’.

The website, booklets and brochures help people choose, and better use, more efficient appliances, solve design problems in older homes, and create more sustainable Australian native gardens.

To enter the competition, participants should visit www.firstnational.com.au and follow the links to the Super Massive $25,000 Giveaway.

‘You can enter as many times as you like between 1 October 2010 and 31 October 2010. It’s that simple, there’s no skill required and all entrants have an equal chance to win’ says Mr Bunn.

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Australia would buck another global downturn

September 22, 2010 Leave a comment

Australian Coat of Arms (adopted 1912)

Image via Wikipedia

Australia‘s economy is the envy of the developed world.

Not only did we escape the global downturn with hardly a scratch, but we’re in a very strong position to withstand any more external economic shocks. We have interest rates back up to average levels and government debt at much lower levels than any of our overseas counterparts.

This means that if the US fell into recession again, or even if China’s economy took a turn for the worse, Australia still has the levers to stimulate the local economy.

When it comes to housing, the strength of the local market has overseas investors and commentators all worked up, even given the moderation in price growth experienced over the last quarter. Foreign financial markets are convinced that Australian housing is the next big bubble that is about to burst.

Many major retail and investment banks recently released their perspectives on the situation and they all came to the same conclusion – there is no speculative “bubble” in the local property market.

Even if you subscribe to the view that Australian housing is relatively expensive, the sequence of events that would need to occur to spark heavy prices falls is unlikely.

During the global financial crisis Australian property suffered only a 4 to 5 per cent fall in price. In the US, the 30 per cent fall in property prices was driven by subprimehome lending, and the typical oversupply that accompanies high levels of speculation. In Britain a similar size fall in prices was driven by a domestic bank credit crunch that was a result of a global credit crisis. Both led to a combination of a collapse in demand and distressed selling.

In Australia we have no subprime lending sector to talk about and a significant undersupply of new housing.We have interest rates at levels higher compared with other international economies, so the Reserve Bank could respond to any overseas credit rationing by dropping interest rates again. Even in the extreme event of another economic storm which would force banks to withhold new lending, it is unlikely to lead to a wave of distressed selling.

Homeowners with a mortgage are in a strong position. A report from one of the big four banks, considered to be Australia’s largest home loan provider, stated that its average home loan to home-value ratio is only 43 per cent and that 70 per cent of customers are paying their mortgage in advance, and are an average of nine payments ahead.

Australia has an undersupply of housing because of the natural increase in population and immigration.We have an economy where unemployment is approaching historic lows and incomes are set to rise strongly. If we also take into account strong gross domestic product, retail sales and consumer sentiment indicators, and low mortgage arrears and delinquency rates, doomsayers will continue to be off the mark when it comes to predictions of house price collapses in Australia.

SOURCE: Anthony Ishac | Sydney Morning Herald | September 20, 2010

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Depreciation – Old vs New

September 21, 2010 Leave a comment

Many investors remain unsure about whether it is worthwhile obtaining a depreciation report for a residential property that was built before 1985.
Current tax legislation states that any property built before 18 July 1985 (residential) and 20 July 1982 (non-residential) cannot claim the capital works allowance as a deduction. This often results in the investor not thinking to obtain a depreciation report, as they believe that their property is too old. However, it is worth enquiring about any property – even one that’s 100 years old!

In the case of older properties, it is worth noting that a capital allowance and tax depreciation report covers not only the capital works allowance but depreciation of plant and equipment as well. This means that all properties that obtain an income by the way of rent should be eligible to claim a deduction for the plant and equipment items contained within the property.

Even if a property is too old to claim the capital works allowance for the building structure, the investor will still be eligible to claim the plant and equipment allowance. Additionally, if extensions or renovations were completed after 1982 (non-residential) or 1985 (residential), they will attract the capital works allowance.

Older Properties

Depreciation on the structure of a building is governed by the date that construction began. This may mean that a property might not be eligible to claim depreciation on the original structure. However, investors will still be able to make a claim on the fixtures and fittings within the building. All eligible assets are valued at the time of settlement regardless of their age. Older properties that have had a renovation are also eligible to claim depreciation on the work completed, even if a previous owner carried out the work.

New Properties

Owners of new investment properties are eligible to claim depreciation on the building structure and the fixtures and fittings in their property. The effective life of a new building for Australian Taxation Office (ATO) purposes is 40 years (some exceptions apply). This means a brand new property is able to claim the entire construction cost over the life of the property. Properties that are not brand new can claim the residual of the 40 years. For example, if an investment property is 5 years old and its owner wants to claim depreciation on the structure, they have 35 years left of deductions to claim.

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Your future starts today

September 14, 2010 Leave a comment

Queensland First National members are excited about their upcoming state conference, scheduled for 11-13 October at the Outrigger Twin Towns Resort in Coolangatta.

This annual get together creates the opportunity for property managers, sales staff and principals to discuss the issues that specifically influence Queensland real estate. The agenda incorporates the fun of the ‘Not So Special Olympics’ and key corporate business such as the Queensland General Member Meeting. All staff are invited to attend this gathering that will cater to everyone’s interests.

Queensland members are advised to contact National Office on 1800 032 332 to register.

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Property sales in Oz rebound as first time buyers re-enter the market, reports show

September 13, 2010 Leave a comment

The political climate in Australia remains fragile but the real estate market has had a boost with first time buyers helping sales jump 11% in August.
The latest real estate figures to be published show that home and mortgage sales jumped as homebuyer confidence strengthened and mortgage delinquencies stabilised.

With the Reserve Bank keeping official interest rates on hold, property sales across the nation were 10.9% higher than in July, the figures from the Australian Finance Group (AFG) show.

And for the second consecutive month, sales to first time buyers climbed from 9.5% of the market in June to 11.7% in August.

Australia’s biggest mortgage broker said first time buyers share of the mortgage market bottomed at 9.5% in June, before climbing to 11.1% in July and 11.7% in August. The trend was strongest in New South Wales with sales to first time buyers making up 15.5% of all sales, up from 11.7% in June.

‘We now have two months of data which show that first home buyers are coming back,’ said Kevin Matthews, executive director for mortgage broker AFG.

The report also shows greater competition between lenders on price and policy and increasing loan to value ratios that are supporting both entry level home buyers as well as property investors.

Matthews also said the impact of the government grants, which had the effect of bringing forward first time buyer demand, seemed to have ‘washed through the system’.

‘With property prices in many areas having stabilised, and some lenders prepared to lend up to 95% of the property’s value, property is becoming more accessible to first home buyers and more attractive to investors,’ he explained.

Property investor activity varied across the states, with New South Wales and Victoria topping the market. Almost 37% of all mortgages sold in New South Wales came from investors, while in Victoria they accounted for 36.4% of all the sales. By comparison, investor confidence in the mining states of Queensland and Western Australia remained weak, largely due to the uncertainty over a possible mining super tax.

The index also revealed that buyers preferred to take out their mortgage loans with non-banks. Although still accounting for the lion’s share of mortgage loans, bank loans have dropped from 92.5% in the first quarter of 2009 to 87.5% in the second quarter of 2010.
Over the same period, the non-banks have increased their share from 7.5% to 12.5%.

Confidence among homebuyers is upbeat and is now above 2008 levels but has yet to surpass 2009 levels, according to lenders mortgage insurance provider Genworth Financial.

Its latest index of homebuyer confidence shows that 20% of home buyers expect to have repayment difficulties over the next 12 months.

SOURCE: Property Wire 8 September

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Good times ahead in commercial real estate

September 10, 2010 Leave a comment

Media Release – 10 September 2010

Speaking at the First National Commercial conference at Hyatt Sanctuary Cove, BIS Shrapnel senior projects manager Maria Lee today forecasted good times ahead for the Australian commercial real estate market, despite the expectation of continuing bad news from the US and European markets over the next few years.

‘Recovery is already underway and the markets have had their shakeout. The risks of overvaluation are gone and most property sectors are now undervalued. Instead, there is now the prospect of rising, not falling prices over the next few years’ says Ms Lee.

After a round of equity raisings last year, major investors have recapitalised, reduced their debt levels, and building has virtually stopped. While the risk of oversupply has not entirely disappeared, they’ve greatly diminished.

Many commercial property markets have seen peak vacancy rates now and are in recovery mode. With very little supply underway, the risk of oversupply is unlikely to arise again for quite some time. This means good times ahead for commercial property as leasing and investment markets recover and there will be some great business opportunities for commercial agents.

European and US economies are anticipated to stay weak for quite a long time so people shouldn’t be disturbed by bad news emanating from those sources. We’re now much more closely aligned with Asia and Asia’s doing well.

Maria Lee characterises the office market as being similar to the 50 metre race for a group of under sixes.

‘They’re all lined up on the start, waiting for the gun. The gun sounds; some children head straight down the course – they know where they’re going. Some are blocking their ears because they don’t like the sound of the starting gun, then, with a delayed reaction, they set off down the course as well. But, there are always a few children who set off in the wrong direction but eventually they do all reach the finish line.

‘So in the office market race, Melbourne is the front-runner. Sydney and Adelaide are heading in the right direction; Canberra has definitely taken a step backwards. Brisbane and Perth look as though they are heading in the wrong direction at the moment. However, the point is that they’re all going to get to the finish line but it’s just a question of timing’.

Office markets around Australia are already, or shortly will be entering, an upswing phase of the cycle. The key to recovery is lack of supply, which is not expected to pick up soon because there are too many obstacles. Rents are too low, yields are too soft, finance is expensive and difficult to get hold of, and although tenant demand has picked up, it is still difficult to secure sufficient tenant pre-commitments to get a building over the line.

Supply is not expected to really kick in until between 2012 and 2014/15, in some markets. On average, supply is unlikely to catch up to demand until mid-decade at the earliest, so there will be a sustained period of tightening markets and rising rents.

The scene is set for substantial rises in capital values over the next five to seven years.

Underlying demand for industrial property is recovering. Businesses are re-stocking, import and export activity has picked up, and that bodes well for warehouse space. Meanwhile manufacturing has troughed but manufacturing output is forecast to grow more quickly over the next five years than it did over the last five, which also bodes well for the demand for factory space.

Firming yields were the main driver capital gain in the retail sector until 2007, however yields have since softened by about 95 basis points for regional shopping centres, 180 basis points for sub-regional centers, and a little bit less than that for neighbourhood centres.

Retail yields are not expected to firm back to 2007 levels because yields firmed too far in the run up to 2007. What we are now seeing is an unwinding of previous over firming. The forecast is for a mild firming and then cycling within a fairly narrow band. Strong returns will not been seen from the yields side so the emphasis will shift to shopping centres incomes and growing those incomes.

‘In the run up to 2007 you didn’t need to be an expert at retail management, now expertise is needed. For those who have the expertise, there will be good buying opportunities because prices have come off and there will also be mismanaged centres to pick up and good development opportunities.

‘There should be great opportunities for agents to assist landlords and their tenants in leasing space as demand recovers, and also to broker investment deals as property fundamentals continue to improve so we can look forward to much more idyllic surroundings for the next few years at least’.

Issued by: First National Real Estate

For further information contact Stewart Bunn, National Communications Manager, First National Commercial on 0413 624 317

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Please help support the Children’s Village

September 8, 2010 Leave a comment

Architect's impression of the proposed Children's Village

First National Webbers (Caloundra, QLD) has set itself the goal of raising $100,000 before the end of December to build a children’s orphanage in Uganda. The First National office has already raised $32,000 towards the ‘Children’s Village’.

Thousands of Ugandan children have no home, family, or chance of education. First National Webbers plans to build the orphanage with bare hands, next January, on 10 acres of land that has already been purchased by another community group. Support is needed in the form of volunteers willing to pay their fares and accommodation, then assist with the project, either by cooking and cleaning, caring for the young ones, or helping build. A post-construction safari has been arranged as a reward for the hard work of those that contribute.

Visit http://www.thechildrensvillage.org.au/ for more information or to make a donation. Or, contact First National Webbers principal Robert Webber on 0412 723 457.

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Going nowhere fast!

September 7, 2010 1 Comment

The Australian Housing and Urban Research Institute recently completed a survey of 1604 older home owners and found that they’re about as keen on moving house as getting divorced, their partner dying, or finding themselves imprisoned.

The important findings make it clear that if government is hoping for any relief from older Australians to its housing supply problems, it can look elsewhere. Ninety per cent of them believe their home is just the right size for them, even after their children have moved out. So, government will just have to put its planning and policy thinking cap back on because its current assumptions are wrong.

Australian homes are considered big by international standards. Take the Canadian view, for instance. Applying that government’s calculation of housing occupants to housing size and composition shows that 88 per cent of Aussie homes are grossly under-occupied and hence under-utilised.

Older Australians live as singles or couples in houses with three or more bedrooms and they own their homes outright. If just 20 per cent of Baby Boomers were to downsize into smaller accommodation, the vexing housing supply problem would be solved.

Over 55 year olds make up 25 per cent of Australia’s population – that’s 5.6 million people. Over 65 year olds make up a further 13 per cent – 2.9 million people. The over 65 component will grow to 19 per cent by 2021 and when you add the figures together it’s not hard to see that the problem, with immigration thrown into the mix, is getting worse.

To avoid moving into retirement villages or into their children’s homes, which they find ‘distinctly unappealing’, older Australians plan to alter their homes, installing grab rails and ramps so they can stay put. Less than 20 per cent are willing to consider downsizing.

The Australian Bureau of Statistics says there will be between 9.4 and 10 million households by 2021, but that’s reliant on houses being built faster than the population is currently growing. At current rates, it’s possible that close to 20 per cent of Australia’s larger housing stock will be inaccessible to first home buyers, young families or investors.

Adding to the complexity, 1.7 million people own two, three or more properties and Baby Boomers are overrepresented. They, however, have no intentions of downsizing, considering those extra bedrooms ideal for other recreational pursuits and the accommodation of visiting relatives and friends. Plus, instead of passing on that wealth to their children, Baby Boomers intend upon selling their investments and spending the money, so the homeownership will not necessarily be passed to offspring.

Homeownership among young people is falling and this is not a new trend. Australia is certainly one of the most expensive places in the world to buy a house and the chronic shortage of homes means rents will simply continue to increase.

Planners are increasing housing densities and encouraging smaller apartment-style dwellings to cater for a perceived demand that it appears does not exist amongst older homeowners. Perhaps it shouldn’t surprise government when it has been long known that Australians love their traditional quarter acre block, the back yard barbecue and, increasingly, a vegetable patch.

It is Australian families as well as immigrants of the future who will probably occupy inner city and middle suburban ring apartments, which, most likely, will be owned by others.

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First National Commercial – PowerUp

September 6, 2010 Leave a comment

This Thursday, First National estate agents are heading to Hyatt Regency, Sanctuary Cove for the network’s annual commercial conference.

With a sharp new brand and renewed momentum, First National Commercial has grown considerably this year, adding 10 offices to its national network already. Another two will join within the next two weeks!

The conference will bring together keynote presentations from BIS Shrapnel, Westpac, and a series of business contemporaries from professions including law, human resources, commercial real estate development, sustainable building designers and marketing strategy.

First National Commercial helps First National residential members seed additional income streams, thereby strengthening their businesses. Major commercial brands are chiefly centered in capital cities but the suburbs are where First National Real Estate holds an advantage. The vast bulk of Australian commercial property is situated not in high-rise office towers but suburban shopping strips. First National’s spread of residential agencies throughout Australian suburbs places First National Commercial in a unique position as its growth rate makes it one of Australia’s most prolific commercial brands.

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First National Real Estate CEO says search engine ranking critical

September 3, 2010 5 Comments

One of First National's latest search engine optimised websites

First National’s Chief Executive Ray Ellis has commented on the critical importance of real estate website search engine ranking, saying Australian consumers should take a closer look at their agent’s websites.

‘While many homeowners understand that the Internet is now a crucial component of marketing when the time comes to sell, how many of them actually check an estate agency’s Google ranking before signing up with their agent’ says Mr Ellis.

It’s now a well accepted fact that nine out of ten people start their search for a new home using the internet. While the major real estate portals like realestate.com.au and domain.com.au may seem like a logical starting point to many consumers, more people start out by entering the name of the suburb plus the words ‘real estate’ in a search engine like Google.

‘This is where the results get interesting’ says Mr Ellis.

‘One prominent real estate brand markets itself to Australians with the promise that its brand is “searched more often than any other real estate brand” but the evidence shows that it just isn’t being found. Consumers need to be wary of listing with agents who have an ineffective Internet strategy as their home may not receive the exposure it needs to maximise its price.

‘A common mistake is making the assumption that the agent with the most advertising in the local newspaper will achieve the best result. First National Real Estate’s research shows nothing exceeds the importance of Internet marketing and the ranking an agent’s website receives when it comes to maximising price. The vast majority of buyers find our listings online so agents must work to achieve page one search engine results for their website’ says Mr Ellis.

Business Review Weekly conducted a review of Australia’s top 30 real estate brands in 2009. The websites of those brands were then subjected to an independent assessment that found First National Real Estate was number one at marketing its listings in a way that attracts a maximum of exposure.

Those in the know refer to ‘Inbound Marketing’ as the Holy Grail of search engine optimisation. To the merely mortal, ‘Inbound Marketing’ loosely translates to the steps an entity takes to attract ‘views’ or ‘hits’ to its website. The more hits for real estate agents, the more sales. The major real estate brands are therefore locked in a pitch fork battle as they vie for supremacy, and the stakes are high!

‘Newspaper advertising volume once helped major brands retain their coveted prominence but First National Real Estate recognised six years ago that print media was a battle of the past and that it had to revolutionise its Internet strategy if it were to deliver the greatest value to its customers’ says Mr Ellis.

The network terminated its former web-hosting alliance partner in 2004 and set about building a completely different approach to website management.

‘We listened to the best and brightest in the website design profession and we also consulted our own agents to craft the most flexible, user friendly, search engine visible websites in the profession. Our strategy is quite simply the most effective in Australia right now.

‘When the director of another major brand writes to his franchisees, as took place this week, acknowledging the brand’s search results are “hopeless” and that they are not the dominant force online that they feel they should be, it underlines just how careful consumers need to be when choosing their agent’.

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