The Hottest Spots to Buy in Australia this 2011

RP Data research shows solid growth in suburbs 10km outside capital cities, where real estate is more affordable, and middle-ring suburbs along major transport spines top its list of strong performers, indicating that buyers are rating both the price and commuting time high in their priorities.

Property analysts are also bullish on large regional towns where state governments have poured money into transport and infrastructure to try to decentralize population growth.

And while chatter about a housing bubble in 2011 has grown louder recently, experts say a property slump is over-emphasised.

Australia Property Monitors senior economist Dr Andrew Wilson forecasts activity will be restrained in most markets early on but demand and price growth should resume by mid-year.

What if a Property is Deemed Uninhabitable?

Do you still need to pay rent if your property is inhabitable?
What happens if your home is damaged in a civil emergency?
As an owner are you covered?
http://truepropertymanagement.blogspot.com/2011/01/if-property-is-deemed-uninhabitable.html

In each Australian state the tenancy legislation varies however in Victoria if a property is deemed "uninhabitable" then the tenancy can end immediately and the tenant has no further obligation regarding rental - basically just walk away.  Their problem will be where to go as the available rental properties will be limited at such a time.

If owners have tenancy insurance it should provide cover for loss of rental for a period up to 1 year until repairs are completed.

This is the wording from the Tenants Union of Victoria site:

Home Owners Face Affordability Shock

Home owners in the flood ravaged suburbs of Queensland could struggle to repay their mortgages when the water begins to subside.

According to a recent report by Fitch Ratings, home owners could suffer an “affordability shock” due to an increase in expenses and loss of income.

"Borrowers who have been directly or indirectly affected by the flooding will likely experience some financial distress in terms of property damage, increased living expenses, and potential loss of income," Fitch associate director James Zanesi said.

"Queensland's floods might also temporarily reduce available income in selected mortgage-backed transactions depending on their exposure to the affected areas.”

Reports suggest that up to 40,000 properties may be affected by the floods, the majority of which will be located in Brisbane.

Assuming that the impacted areas are reflective of the Australian mortgage market, approximately half of properties are estimated to have a mortgage in place.

But even with this in mind, Mr Zanesi said it is too early to quantify the magnitude of the eventual affordability shock.

“Australia’s major banks have already announced payment holidays of up to three months in favour of affected households and increased credit availability or disaster relief packages. Special government disaster flood assistance grants and private help might offset the impact on such borrowers. Structural assistance grants and private insurance might also reduce the costs of property damage and further government help may be forthcoming, given the magnitude of the catastrophe,” he said.

“Borrowers affected by the flooding that have equity above their scheduled mortgage balance, may choose to draw down on their mortgage to meet clean-up and repair expenses and to make mortgage payments until their income returns to normal.”

Source: www.rebonline.com.au

Melbourne Real Estate Trends - 2011

Looking toward 2011 there are a number of trends that will influence the local residential property market.

INTEREST RATES AND HOUSING AFFORDABILITY 

House prices may have stabilised over the past six months but the cost of home ownership has not. As a result of multiple increases in interest rates, which have not been matched by higher incomes, the affordability of housing has been substantially eroded over the past 12 months. Further interest rate increases would have a negative impact in 2011. As a result, in 2011 suburbs at or below the median will increase in popularity.

AUCTION STOCK LEVELS

Many home owners looking to sell in 2011 will have watched the performance of the auction market over the last few months and noted the drop in the clearance rate to around 60 per cent. This is likely to lead to a number of sellers looking to use private sales rather than auctions as the selling method in the same way that high clearance rates in 2009 led to more auctions in 2010. This is then likely to increase competition for the homes at auction.

FIRST HOME BUYERS

With the promise of a 20-per-cent cut in stamp duty from 1 July 2011, we are likely to see a small increase in first home buyers in the second half of next year.

POPULATION PRESSURE

There still remains a substantial gap between the Victoria’s population growth and the supply of new dwellings; this gap won’t be closed in 2011, resulting in ongoing pressure in all segments of the housing market.

 

Source: http://www.reiv.com.au/news

How to End a Tenancy Agreement

Steps for a tenant to end (terminate) a tenancy

1. Give the landlord/agent written 'notice of termination' (see below) with the right amount of notice. If you are posting the notice, allow 4 extra days for delivery.
   
   
2. Remove all of your belongings. Clean and take photos of the premises. Leave the premises as you received them except for fair wear and tear.
   
   
3. Invite the landlord/agent to inspect the premises and complete the final condition report. They do not have to do this before you give them the keys. (This is why you take photos.)
   
   
4. Attend the final inspection by the landlord/agent, if possible. Participate in the inspection and get a copy of the condition report.
   
   You can complete a final condition report, without the landlord/agent, to go with your photos. Get a friend to assist and witness your condition report. You do not have a right to go back into the premises once you have handed back the keys.
   
   
5. Lock up the premises and hand back the keys to the landlord/agent. Get a receipt for the keys.

Late Rent - Dealing with Arrears

So, you've done your homework, signed up a tenant and still found yourself in an unfortunate situation. From here on out, it is a process of damage control. It is highly likely you will lose money. The key to limiting your losses is speed. Act immediately.

• Tackle overdue rent immediately. A tenant should be two to four weeks in advance at all times.
  
  
• A bad tenant will make all types of excuses for not paying the rent. Do not accept any excuses except those that would genuinely affect their ability to pay. Compromises can be made for legitimate difficulties, particularly for tenants with a good track record.
  
  
• If rental arrears occur, take note of whether you had to call the tenant to chase the rent, or whether they notified you of their difficulties. The latter is usually a more positive sign.

Bad News Banks, New Online Tool Will Save Borrowers Money

MORTGAGE holders will be able to compare costs for switching banks with an online calculator launched by the Australian Securities and Investments Commission. 

The move comes ahead of a series of banking reforms that Treasurer Wayne Swan has promised will be released later this month.

ASIC launched the new tool which allows mortgage holders to assess whether changing mortgages will help them pay off their home loan faster and how long it will take them to get ahead after paying an exit fee to their previous financial institution.

A mortgage exit fee can be as high as $1000 and the cost has led to a brawl between banks and Mr Swan in recent months.

Last month ASIC changed the rules for banks, restricting them to charging exit fees that reflect the cost to them of closing a mortgage early.

Concerns had been raised that banks were charging excessive mortgage exit fees to stop people refinancing when they found a better deal.

ASIC chairman Tony D'Aloisio says the regulator has seen a sharp increase in the inquiries it has received about switching home loans in recent months as interest rates have risen.

"Recent interest rate rises have been hard on borrowers," he said. "Until now it's been difficult to work out whether another loan would leave you better off after all the exit and entry fees.

"Shopping around could save borrowers thousands of dollars in repayments.

"We've noticed a large spike in inquiries about bank switching and exit fees in the last couple of months."

Mr Swan said the calculator would help Australian families assess the savings they could make by switching to a more competitive offer.

"I've been working closely with our regulators for some time now to develop a package of new reforms to help build up more competition in the banking system, and I'll release those reforms this month," Mr Swan said.

The tool allows mortgage holders to input details of an existing loan, including the exit fee, and compare it with any new loan they are offered.

The calculator will then tell mortgage holders how long to wait before a cheaper loan will represent an overall saving after switching costs, which loan will be paid off faster and what can be saved in minimum monthly repayments.

Mr Swan is being pushed to withdraw the Government's deposit guarantee for the big banks and extend it for building societies and credit unions.

The controversial move is intended to divert billions into smaller lenders, enabling them to grow their mortgage businesses and provide a real alternative to the big four.

The idea has been put forward by Mark Bouris, head of Yellow Brick Road, the financial services company, in its submission to the Senate inquiry into banking competition.

Mr Bouris met with the Treasurer on Friday and afterwards Mr Swan told The Sunday Telegraph he admired Mr Bouris's business model and wanted to see more like it.

Yellow Brick Road has a partnership with Gateway Credit Union, which involves taking Gateway's funds, rebranding the money as Yellow Brick Road mortgages and distributing them through YBR's 45 branches.

Mr Swan is considering a variety of measures to increase the market share of mutuals.

Read more:
 http://www.news.com.au/money/banking/bad-news-banks-new-tool-will-save-borrowers/story-e6frfmcr-1225965747071#ixzz17VaLAXbZ

The Comfort Factor

Over the past few years our predictable Melbourne weather has been anything but predictable with drought turning to heavy rains followed by high humidity akin to Northern Queensland.  This has significantly changed the way prospective tenants prioritize their list of “must haves”.  

Air Conditioning is now high on their list of priorities, particularly at this time of year when Melbourne temperatures soar.  While you may not recoup the initial outlay for air conditioning immediately, as it does not increase the rental value significantly, it will certainly ensure the property is leased or re-let in a shorter time period of time thereby increasing the net return on investment.

With 2010 having just been declared the hottest year on record it may be time to consider your options regarding providing year round climate control.

Australia Moves to Melbourne's West

Australia’s fastest growing region is no longer the Gold Coast but rather Melbourne's West, a new study has found.

According to KPMG research, over the 12 months to June 2009 the municipalities of Wyndham and Melton faced a population boom with 18,000 new residents, exceeding the Gold Coast with 17,000.

KPMG demographer Bernard Salt said housing affordability had played a large part in the region's recent population boom.

“There are new house and land packages on the market in Werribee for less than $280,000, compared to Melton South where packages start at around $260,000," Mr Salt said.

In addition to the increased population, the West is projected to add 175,000 people and 82,000 dwellings throughout major growth areas of Werribee and Deer Park over the next decade.

“Population growth at this pace and scale means more demand for social infrastructure such as houses, shops, schools, roads, medical centres and sporting grounds," Mr Salt said.

article by Matthew Sullivan

Cleaning up a Rental Property

TIPS FOR GETTING A RENTAL BOND BACK

Cleaning your rental property up to a standard where you get your bond back can be a nightmare.  By separating your property into rooms and making a checklist of everything that requires cleaning, you can work through the house one room at a time in a systematic fashion, ensuring nothing is missed.  

All rooms will require that the windows are clean, skirting boards wiped down and a mop to the ceilings if they are marked.  If the carpets are showing signs of your stay it may pay to get a commercial carpet cleaner in.  Vacuum under any furniture left in the house and ensure all tiles and/or lino is clean.

Kitchen:

Probably the most time consuming room, start here while you are fresh.  Take particular care to clean:

• Oven
• Microwave
• Dishwasher
• Cupboards (in, under and on top of)
• Whiteware (inside and out, underneath)
• Sink