New homes to drive property market

March 28, 2012 Leave a comment

Media Release – 27 March 2012

A solution to Australia’s sluggish start to the property market for 2012 may rest with the New Homes Building sector says First National Real Estate, especially if associated regulatory and government taxes were reduced.

“New home building is a key barometer for the health of the domestic economy and can often drive first home buyer activity,” Mr Ray Ellis, CEO, First National Real Estate said.

“But the disappointingly weak start for new home sales early this year, indicate low interest rates are not enough to sustain improvements in new home building conditions and something more needs to be done at the policy level.”

An industry report released in February this year showed a decline of 7.3 per cent in seasonally adjusted new home sales in January, with Victoria experiencing the sharpest decline of 19.6 per cent.

“The report also showed a decline in detached house sales for NSW and SA as well, which further weakened results, but strengthened the case for government action,” Mr Ellis said.

According to Mr Ellis, a real opportunity exists for governments to set the new home building agenda and look at policy reform that will reduce new home building taxes.

“Up until now, both state and federal governments have relied on Victoria to prop up this segment of the Australian market, but the results show they can no longer do that.  It is up to governments to show leadership and do something,” Mr Ellis said.

“Policy reform, especially reducing taxes and costs for home building would have a multiplier effect.  It would attract people in a financial position to build a new home, and have the knock on effect of increasing economic activity through jobs and sales activity.

“Everyone’s a winner, so why can’t we build more new homes?”

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

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First National agent awarded $100,000 in damages

March 14, 2012 Leave a comment

Lëtzebuergesch: Schëld Alice Springs

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SOURCE: Northern Territory News, 7 March

An Alice Springs real estate agent has successfully sued a Territory newspaper for defamation and has won $100,000 in damages.

First National Real Estate Framptons director David Forrest lodged a defamation claim in the NT Supreme Court against Alice Springs News editor Erwin Chianda.

Mr Forrest claimed Mr Chlanda defamed him in an article that suggested the agent should be stood aside from his position in the Real Estate Institute of the NT and had engaged in fraudulent behaviour as principal of his agency.

The article said Mr Forrest was the subject of a fraud investigation and an NT Government Agents Licensing Board inquiry directly before the sentence “The probes follow the collapse of Carey Builders.” The company left homebuyers out of pocket.

Randal Carey was criminally charged, and convicted, for building houses while being unregistered.

Mr Forrest claimed the article indicated he deserved to be stood down. Mr Chianda took no steps to verify those suspicions by checking with the police because of his behaviour as principal and his “connection” with Carey Builders.

Mr Chianda claimed it was an honest opinion a defence under the Defamation Act.

Justice Judith Kelly found the article was not based on material that was “substantially true” a requirement under the defence.

She said: “The article does not distinguish between suspicions, allegations and proven facts.

“Mr Chianda took no steps to verify those suspicions by checking with the police.” Justice Kelly found a sum of $100,000 was sufficient to “vindicate” Mr Forrest’s reputation.

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Warragul makes top 100 for growth

March 8, 2012 1 Comment

First National Clark Director, Peter Clark

Residents of the regional Victorian township of Warragul will be delighted to learn that their town made the top 100 list of places experiencing the biggest increase in median prices last year.

In 2010, Warragul’s middle market price was $283,993, but this increased by 8.2 per cent to $307,341 over the course of 2011.

First National Real Estate Clark’s principal, Peter Clark says he’s not surprised, considering the lifestyle benefits and close proximity to Melbourne.

‘What the RP Data top 100 list reveals is that there’s a population shift underway from capital cities to outer ring suburbs and regional areas. Prestige suburbs hardly rated a mention in the list that highlighted areas where property values grew the most.

‘While 41 Melbourne suburbs experienced higher than national average growth in house prices in 2010, only two suburbs were represented in 2011’ said Mr Clark.

Throughout Australia, it was generally areas associated with mining, infrastructure and building activity that fuelled leaps in property values. However, regions with good access to capital cities and well-developed local infrastructure are rising in appeal.

First National Real Estate has monitored a lift in buyer enquiry throughout regional areas in recent years, developing its focus on the ‘Lifestyle’ segment of the marketplace which seeks to cater to the needs of former city residents looking for more space, a community connection and the opportunity to take advantage of all that that offers.

‘Our network has just today announced its official sponsorship of the Regional Victoria Living Expo which takes place at Melbourne’s Convention Centre between 27 and 29 April this year’ said Mr Clark.

‘This sponsorship underlines our commitment to the communities in which our agents work and live. We have 83 offices throughout regional Victoria and our agents are working hard to address the specific types of questions and concerns Melburnians have when they are contemplating a move to the country.

‘We don’t expect this trend to slow either. As cities become more congested and living costs rise, people will increasingly look to the better value offered by regional Victoria.’

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First National urges government to lead

March 2, 2012 1 Comment

Chief Executive, Ray Ellis

Media Release – 2 March 2012

Now that the ‘politics’ of politics are all but settled, First National Real Estate is calling on the government to start focusing on the real issues at hand – namely property and getting Australia going again.

First National Real Estate’s CEO, Mr Ray Ellis, is urging the government to take a stronger leadership role and hold banks accountable for their independent actions on interest rates, to ensure they act more responsibly when the next decision is handed down.

“The recent move by the major banks to independently raise interest rates at a time when restraint was required was very disappointing, and the real estate industry, as well as mortgage-holders, are looking to the government to reign in the banks in some way,” Mr Ellis said.

“The market was showing strong signs of improvement and it is irresponsible of banks to raise rates when the RBA determines they should remain on hold.

“In some capital cities, auction clearance rates dropped on the weekend after the banks raised their rates and fewer properties sold at auction than for the same time last year, evidence the market was subdued following their irresponsible actions.

“This followed our agents reporting drops in listing volumes for the second month in a row, media reporting market activity across the board had picked up in January, up by 40 per cent over last January, and market conditions being good, but the banks’ actions undermined the positive progression of the market, which is only to the detriment of the Australian economy as a whole.”

Mr Ellis said while the government may have been distracted by their own ‘politics’ at the time, it is hoped they will be more attentive when the next RBA interest rate decision is made.

“Real estate is a key driver of the Australian economy, so it needs to be supported during times of uncertainty and reducing consumer confidence,” Mr Ellis said.

“It was fiscally irresponsible for the banks to behave in that manner, and we are certainly looking to both them and the government to do the right thing next time.

“We are doing our bit to provide a supportive environment by offering financial incentives and competitions for our customers and putting them first, and all we are asking is that the government makes sure the banks do the same.

“It is in everyone’s best interest.  Australia will be better for it, home buyers and sellers will be better for it and in the long run, so will the banks.  It is a proven fact that consumers will remain loyal to businesses that support them during tough times.”

Mr Ellis also encouraged mortgage seekers or holders to use their influence and remind the banks how important their patronage is.

“Banks are all vying for the mortgage dollar and are on record as saying they will negotiate on rates to retain their share of the market – buyers and mortgage holders are in a position to make them keep to their word.

“It’s a basic premise that when the banks do the right thing by their customers at times that count, their customers, in turn, will do the right thing by them.”

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

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Should you invest in Australian property?

February 14, 2012 Leave a comment

Consider these statistics...

The decision to rent or buy is always a big one. The traditional strategy of buying a first house and then moving up to the ideal home as your income and equity grows is fast being replaced by the initial purchase of an investment property. However, the alternative of renting indefinitely while you save to buy is becoming equally difficult because of escalating rents and an historic squeeze on vacancies.

If you’ve wondered whether you’re ahead by renting or better off buying, consider these statistics.

  • The median net wealth of a renting household is $55,265 whereas homeowners have nine times as much – $487,183
  • Renters comprise 28.7 per cent of the nation’s households but have only 6.3 per cent of the nation’s wealth
  • Australians who own their home are worth 13 times more than renters – $734,394

So, despite arguments to the contrary that emerge from time to time, real estate ownership has made the average Australian second only to Swiss residents as the wealthiest in the world.

So how do you take the step from renting to buying your first home?

  1. Approach the market with a sound five-year plan. Get into the market, pay down the mortgage, and establish equity in the home as a basis for long-term financial security and flexibility.
  2. Budget for extras. As well as a solid deposit, have money set aside to cover insurance, routine maintenance costs and to meet mortgage payments for several months if something goes wrong.
  3. Don’t worry about the market. Your focus should be on building a deposit while looking for the property that matches your lifestyle and budget.
  4. Compromise. Your perfect home is likely to be out of reach for now, so focus on hunting down a property that has solid real estate attributes – good location, off-street parking, security, quality finishes and proximity to restaurants and transport. Choose something that will suit your needs for the next five years or so while you build up equity and prepare for the next phase of home ownership.

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’80s Outback’ Home On Selling Houses Australia

February 10, 2012 2 Comments

Media Release 10 February 2012

Living room before

In a first for the Northern Territory, a local home with frontage to the Alice Springs Golf Club is soon to be the subject of a forthcoming Selling Houses Australia episode says First National Real Estate Framptons.

The programme, which delves into the real issues faced by homeowners and provides advice aimed at getting challenging properties sold, tackles a large Alice Springs home with multiple additions and a fractured feel.

First National Framptons sales agent, Dominic Miller says the Red Sands Court home was initially listed quietly with Framptons in March last year, after failing to sell through another agent in 2010.

Several extensions and additions from the 1980s, 1990s and 2000s as well as problems with the way the house flowed from one section to another, had proven to be a stumbling block for the vendors.

‘Unfortunately, this wonderfully spacious and well located home just didn’t make the most of its assets’ says Mr Miller.

‘It’s only 200 metres from the Alice Springs Golf Course clubhouse and the position offers great views of the fairway and nearby Mac Donnell Ranges, but the home just didn’t make good use of its location.

‘Some parts of the home were very 1970s and other parts were renovated in the 1980s. Unfortunately, although the kitchen had been modernised, it seemed to be cut off from the rest of the home.’

With a slow response from prospective buyers making it evident that something needed to be done to give the sale a real boost, Selling Houses Australia was called in.

Living room afterwards

Now in its fifth series, Selling Houses Australia was the LifeStyle Channel’s highest rating programme in 2011 and its host, property expert Andrew Winter, helped First National Framptons and the home’s owners give the house a reality-check.

‘The home was taken off the market and, after some serious planning, given a makeover to resolve the issues that were making it difficult for buyers to see its potential, then returned to the market in mid-October’ says Mr Miller.

‘With a different look and feel, buyer’s immediately responded more positively and we were able to draw their attention to more the important attributes of the home and its position.

‘After all, the Alice Springs Golf Course is rated as one of the top 10 desert golf courses in the world and, as many Alice Springs residents well know, being on its doorstep is a very good position indeed.’

Titled ‘80s Outback’, the episode featuring the home at Red Sands Circuit goes to air on the LifeStyle Channel on 15 February at 8.30 pm.

Issued by: First National Real Estate Framptons

For further information:

Sales Agent, Dominic Miller on (08) 8950 8322 or 0418 897 767

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First National Supports Rates Decision

February 9, 2012 1 Comment

Media Release – 9 February 2012

First National Real Estate’s CEO, Mr Ray Ellis, supports the RBA’s decision to keep interest rates on hold, saying stability is what is sought during times of ongoing consumer nervousness and tension.

“The market is tightly wound at the moment, and movement of any kind could unsettle confidence, which is why we believe the decision by the RBA was the right one at this time,” Mr Ellis said.

“Our agents have reported drops in listing volumes for the second month in a row, which, in part, reflects home owners waiting for selling conditions to improve before they put their properties on the market but also reflects seasonal factors.

“While the market remains slow in much of Australia, decreases in housing availability will begin to place upward pressure on prices as it increases competition, ultimately reducing the number of days it takes to sell a home.”

Mr Ellis said home buying opportunities, even with the rates remaining steady, were still plentiful as interest rates are still relatively low and home prices are at their most affordable for quite a number of years.

“This all bodes well for a property market looking for signs of stability and recovery” Mr Ellis said.

“Any decreases in rates at this time could have further added to consumer nervousness, which is still suffering from uncertainty around global economies and impacts of rising living costs, especially with the advent of the carbon tax.

“At the same time, an increase now could result in reduced affordability, something first home buyers in particular can ill-afford at a time when some of the government assistance schemes are being cut back or dropped altogether.

Mr Ellis said he encouraged anyone looking to purchase a home at the moment to negotiate.

“All the Big 4 banks and other mortgage lenders are on record as saying they are willing to discuss rates with home buyers in order to retain their share of the market, so buyers are in a real position of power to make them deliver on their statement,” Mr Ellis said.

“A calm approach is exactly what is needed right now to allow the property market to catch its breath and stabilise activity, so it can prepare for the next wave of influencing factors. This falls right into the hands of home buyers who should be able to secure the best deals they have for many years.”

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

 

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Renting With Pets, Think Again…

February 3, 2012 1 Comment

You own an investment property and you’re wondering whether you should consider applications from tenants with pets.

Conventional wisdom and maybe even your property manager’s advice suggests you might want to think twice about that. Obviously there’s the potential for damaged carpet as a result of small accidents, marked walls or garden damage. But is that really any different from the normal wear and tear of renting to people without pets?

New research suggests perhaps not.

Responsible pet owners typically work hard to ensure their pets don’t annoy neighbours and don’t do damage to their rental property. They know that one black mark against their name means it may be much more difficult to rent in future, or worse, they may have to surrender their pet to be euthanised, if they can’t find a suitable property.

The research also shows that tenants with pets pay and average $25 to $35 dollars more per week for their property.

Naturally, as with all rental applicants, good pet references are essential. Your property manager may also ask that your tenants sign an annexure to their lease, clearly spelling out expectations and requirements such as having carpets steam cleaned when the property is vacated.

As a landlord, the choice remains yours but allowing your property manager to consider applications from prospective tenants with good references expands your pool of potential customers. Anecdotal evidence also suggests tenants with pets rent for longer periods, reducing the wear and tear that occurs when people move in and out, and, lifting your annual net return.

First National Real Estate offers a ‘Pet Friendly Rental Search’ on its national and member websites. Prospective tenants simply tick the ‘Pet Friendly’ box when searching for property to instantly separate properties that are an option for them.

Even though vacancy rates are at very low levels and many landlords experience no difficulty finding good tenants for their properties, renting to a responsible tenant with a pet may see your investment leased for a longer period, at a higher rate, and that’s well worth thinking twice about!

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Years of Service Earns Australia Day Honours for Network Founding Member

January 30, 2012 1 Comment

Norm Abbey, A First National Real Estate founding member

A founding member of the First National Real Estate network, Mr Norm Abbey was awarded a Medal of the Order of Australia (OAM) at the 2012 Australia Day honours. Norm Abbey received his citation for service to people with disabilities, particularly through Shannon Park Foundation.

As the founding and inaugural president of the parents and friends committee, Norm Abbey was instrumental in buying land to build Shannon Park Centre.

He was also an active fundraising auxiliary member, twice heading campaigns for $150,000.

Mr Abbey became involved after son Peter was diagnosed with cerebral palsy at 18 months.

“I always felt I had to put something back into the community. We received a lot of support with Peter and wanted to repay that.”

First National Real Estate N.H Abbey was established by Norm Abbey in early 1973. The office has provided a first class and professional Real Estate service to the townships of Portarlington, Indented Head, St Leonards & the Bellarine Peninsula over this period.

Norm retired in late 2004 and handed the business over to his son Craig who has maintained the integrity and honest professionalism that N.H. Abbey First National Real Estate has become known for along with brother Dennis Abbey Leesa Scorgie (Norm’s daughter) and Tracey Abbey (Craig’s wife) the Portarlington office is a family affair.

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The Lucky Country?

January 18, 2012 Leave a comment

An example of Australia's vast, undeveloped interior...

Is it just luck that only 4.9% of Australian homes are worth less than their purchase price?

First National Real Estate would argue that luck has nothing to do with it.

The latest figures from RP Data emphasise the resilience of the Australian housing market, despite the ongoing concerns of international market commentators.

According to the organisation, strong growth in home values over the recent growth cycle is why most regions have seen significant levels of equity accumulation. In fact, over the five years to September 2011, capital city home values increased by around 28%.

Although there have been recent declines, as outlined in First National’s 2012 Property Market Outlook, approximately 43% of homes are worth more than twice their original purchase price.

Capital city home values are down 3.3% from their October 2010 peak to September 2011, but taking a longer term view, that’s hardly something for Australians to fret about, especially given the dire circumstances faced by our European and US home owning colleagues who are facing losses in equity well exceeding 40%.

Australia’s property market circumstances are almost entirely unique and largely misunderstood by foreign analysts.

Firstly, the great majority of Australians dwell on the coastline, leaving our vast interior mostly ‘undeveloped’. This makes demand for available land and housing on the coastline unusually strong. This combines with a population which grows at more than 300,000 per year, while we continue to build less than 150,000 homes per year – the opposite of what was occurring in Europe and the USA prior to the GFC. In the USA, a building boom created an oversupply, financed largely through non-recourse lending.

What’s non-recourse lending?

It’s a type of finance you couldn’t dream of acquiring in Australia. Here, before a bank will lend you the necessary finances to buy a property, you must prove you have the ability to pay it back. That starts with at least having a job, unlike some of the lending practices that were prevalent in the States, prior to the GFC, that didn’t require such fundamentals of a borrower. Non-recourse lending also allows the homeowner to walk away if their home becomes worth less than they paid for it, and it then becomes the bank’s problem. Walk away in Australia and the bank will reposess your home, sell it for the best price they can, then sue you for any shortfall. So, in other words, there’s no walking or running away and the investment remains your problem. This provides a strong incentive to ‘hold on’ in times when the market isn’t rising.

The flood of property for sale in the USA is largely the result of homeowners simply handing back the keys and walking off. The cascading oversupply combines with almost zero demand, apart from the occasional foreign bargain hunter looking to take advantage, to further suppress house prices.

So, with an entirely different approach to lending, record immigration, almost zero unemployment, an under-supplied housing market, and a culture that embraces home ownership rather than renting, there’s scant chance of any form of major correction in the Australian housing market despite its current, cyclical softness.

 

 

 

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