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14 Sydney suburbs have median prices above $ 2 million
Sydney has 14 suburbs with median prices of $ 2 million or more, according to Australian Property Monitors.
Point Piper tops the list with its $ 9.9 million median price.
Dr Andrew Wilson, the senior economist at APM , describes prestige housing market as generally having been quiet in the past four years since rising interest rates and the global financial crisis flattened demand from aspirational buyers.
He notes Sydney had 106 suburbs with median house prices of more than $ 1 million in the six months to July.
“This was one more than the number recorded in the previous six months.
“The number of property sales in suburbs with a $ 1 million median house price was also up, from 3,950 in the six months ending in January to 3,953 recorded in the six months to July,” Wilson says.
Some 15% of all sales recorded in Sydney in the six months to July were for properties in $ 1 million-plus median suburbs, compared with 7% in Melbourne.
The latest Australian Property Monitors data has the July quarter Sydney median house price at $ 639,484 – 16% and approaching $ 100,000 more expensive than Melbourne’s $ 551,006.
“Sydney prices have also streaked ahead of Perth’s. At the start of 2007, Perth’s median was $ 530,000 – almost the same as Sydney’s,” Wilson says.
“Perth’s median remains $ 530,000, while Sydney’s has risen 20% since then.”
The disparity between Sydney and the other capitals is even more pronounced, according to the APM data.
Brisbane’s and Adelaide’s median house price sits at $ 440,667 and $ 437,002 respectively, which is nearly $ 200,000 or 45% less expensive than Sydney’s.
Wilson suggests another important point of difference is that despite being the most expensive, Sydney’s market was also the most resilient.
“The 0.6% drop over the year to July is the best result of all the major capitals, with only volatile Darwin showing any growth (3.8 %),” he notes.
Suburb Postcode Median Price
Point Piper 2027 $ 9,925,000
Bellevue Hill 2023 $ 3,340,000
Darling Point 2027 $ 3,325,000
Vaucluse 2030 $ 3,225,000
Double Bay 2028 $ 3,025,000
Dover Heights 2030 $ 2,465,500
Henley 2111 $ 2,375,000
Longueville 2066 $ 2,350,500
Mosman 2088 $ 2,250,000
Palm Beach 2108 $ 2,200,000
Kangaroo Point 2224 $ 2,170,000
Clontarf 2093 $ 2,145,000
Tamarama 2026 $ 2,075,000
Woollahra 2025 $ 2,000,001
Source: smartcompany.com.au
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More Aussies loath than love banks
Just under 50 per cent of all Australians have a negative view of Australia’s banks, new research has revealed.
According to an article in The Australian Financial Review, recent UMR Research has found the banking industry ranks slightly above car sales and electricity industries when it comes to consumer perception.
Just over 45 per cent of Australians have a negative attitude towards the banks, while 36 per cent of Australians have a positive one.
The research found Australians perceive Australia’s banks to be “powerful, greedy and bureaucratic”.
On a scale of 10 on industry perception, banks score 4.5, compared with 6.6 for tourism and mining.
But despite the general negativity towards Australia’s banking sector, borrowers are largely satisfied with their financial institution.
The latest Roy Morgan research shows more than 70 per cent of Australians are satisfied with their lender, with ANZ leading the pack on 76.6 per cent.
Source: theadviser.com.au
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Case Study – How to instantly save over $ 26,000 on lender fees
Client’s current situation:
Client owns a home valued at $ 420,000 with a home loan of $ 225,000
And an investment property worth $ 370,000 with an investment loan of $ 331,000
Their goal: To buy a new home for $ 700,000 and turn their existing home into an investment property.
The client initially attended one of the major banks and received a fantastic deal on the rate.
However, the lenders mortgage insurance on this transaction quoted was over $ 31,000 payable upfront via cash or to be added to the overall loan amount.
The client was referred to us for a second opinion.
We conducted an assessment and presented the following structure to the client:
Refinance their existing investment property with a major bank on a low rate and reduced lenders mortgage insurance fee of only $ 4,500.
Refinance the existing home to another major lender and obtained finance for the new purchase along with a low rate and the Lenders Mortgage Insurance was negotiated to $ 0.
An instant saving of over $ 26,000!
Had the client proceeded with the initial structure the overall cost would have been double the fee as interest would have been added on top of the insurance as the client would have been paying it off over time…
Often we find the borrowers don’t know what different options are available for them to save money. At times it is the ability to know where the lender special deals are, how much they can negotiate off the rate/fees, or how to correctly structure their property/loan and bank accounts to save a fortune.
For a second opinion on your current home loan contact us today! It’s free and carries no obligation.
So feel free to call Andrew Krauksts today on 02 9965 7292 or watch this introductory video on The Home Loan Advisory & request your 5 Min Best Loan Offer Call.
Sincerely,
Andrew Krauksts -
Stamp duty changes for first home buyers
Aspiring first time buyers as well as investors have been dealt a blow following the NSW government’s decision to remove stamp duty exemptions for first home buyers.
As of January 1, 2012, first home buyers in NSW will no longer be able to claim stamp duty exemptions on homes valued up to $ 600,000. Instead, only first home buyers purchasing new homes will be eligible for the concession.
Angus Raine, CEO of Raine & Horne, slammed the decision.
“We already have a major shortage of rental properties in NSW and this is not going to help young people jump off the rental market treadmill and into their own homes,” he said.
“I’d really urge the NSW government to reconsider this budget measure as it will mean first timers will need to find tens of thousands of additional dollars to buy into the housing dream.
“It will also price many first timers out of apartment markets closer to the city and will put even more pressure on overworked infrastructure in outer Sydney suburbs.”
Laing+Simmons general manager Leanne Pilkington said the new policy would hurt first time buyers.
“While this may encourage some first home buyers waiting on the sidelines to enter the market this spring, this measure in reality presents another barrier to many first home buyers looking to get their foot in the door.
“It also represents an opportunity missed. The critical need to improve housing supply remains, particularly in Sydney, however this would better be achieved through a focus on removing the planning red tape and reducing the associated costs of development,” she said.
While the changes are obviously bad news for aspiring buyers, they could also hurt investors, as first home buyers rush to beat the deadline and push up demand for property, competition, and ultimately, prices.
“It is inevitable that as first home buyers scramble to beat the 1 January deadline, we will see prices increase as demand exceeds supply,” said Real Estate Institute of NSW president Wayne Stewart.
APM economist Andrew Wilson echoed similar concerns.
“We have this sort of sunset clause, that it’s [stamp duty concessions] going to be taken away as of 1 January. This means we’ll probably get a bringing forward of demand which just might cause some short term heat in the market place as first home buyers look to take advantage of the window of opportunity over the next 4 months.”
“It’s possible we may see now see some house price movements in the Sydney market in the lead up to Christmas,” he told Smart Property Investment.
Meanwhile, Urban Taskforce chief executive Aaron Gadiel said the $ 1 billion revenue measure was a sensible step that would help boost NSW’s supply of new housing.
“This reform will remove the current scheme’s inflationary impact on home prices, and will make more housing available to more people,” Mr Gadiel said.
Mr Gadiel said that existing first home buyers’ stamp duty concessions have been poorly targeted for too long.
“NSW’s housing supply has been heavily constrained by the planning system and high development levies,” he said.
“In our supply constrained home market, the existing first home buyer stamp duty concessions inflate home prices across the board.
“But this hasn’t addressed the high cost of supplying newly built homes to the market.
“By tying stamp duty concessions exclusively to new housing, the inflationary impact on existing housing will be removed, and brand new homes will be more attractive to home buyers.”
Source: spionline.com.au
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Tips for buying your first investment property
by John McGrath
A recent survey found that 43 per cent of Gen Ys are intending to buy an investment property ahead of their first home. They’re willing to sacrifice the First Home Owners Grant and stamp duty concessions because they’d rather stay renting where they want to live and suit their lifestyle and buy an investment somewhere affordable.
So let’s take a look at my top tips, mistakes and traps for first-time investors. But first, here’s the overall picture.
I think the key to having a great property investment is outperforming the market in capital growth. Yield is important but the serious windfall comes if you find an area with great growth prospects. This can be achieved by solid research, observation and calculated risk.
Imagine if you’d bought a couple of Paddington terraces in Sydney in the 1970s and held them until today. Yet Paddington then only had potential. Very few ‘astute buyers’ wanted to touch the area. So look around and try to unearth the next Paddington. Personally, I think King Street, Newtown in Sydney is a great example of an area with incredible growth potential, along with its neighbouring suburbs.
Generally, properties within a 10km radius of a major CBD or close to city beaches (also within 10 to 15km of the CBD) will yield the greatest growth. Try to find the areas that are relatively unwanted and have the signs for future growth. In addition to location, look for areas that have access to cultural and recreational facilities (universities, art galleries, historical precincts, grand period homes etc) as well as a growing village environment.>/
And when all the research and box ticking is done, go with your gut instinct and be prepared to take a calculated risk.
Tips
•Know exactly how much you can afford and build in a buffer. Get your finance organised before you look and factor in that interest rates might creep a bit higher. Assume a few extra costs in the first few years. If you plan for a few things to go wrong, you’ll be okay if they do.
•Focus on capital growth above all else. You will make far more money out of a great capital growth investment than you will out of one that has slightly more rental return. Of course, yield can’t be ignored as you’re generally relying on it to fund the loan. The highest yielding properties are those in greatest demand. I recommend two-bedroom properties located within one kilometre of a train station.
•Register your details on the top real estate websites. You’ll get first notification of new listings and some agencies, including ours, offer registered buyers the opportunity to inspect new properties before they are made publicly available.
•Buy something that feels good. Many people say don’t buy an investment emotionally but I disagree. If it feels great to you then it will feel great to others in ten years when you decide to sell it.
•Inspect at least 10 properties before you buy. Even if the first one seems perfect, make sure you see enough to really know the market and recognise a good buy.
•Change the time you inspect properties. Open for inspections are great because they allow you to see a lot of properties in a short time but make sure you go back and see the property you like at different times of day and also on different days to make sure it presents well at other times.
•Buy older style houses or apartments for better growth.
•Take a seven-year view, as most property cycles revolve every seven years so make sure you can stay the distance to get real growth.
Mistakes
•Overpaying because you haven’t done enough research. Much of your profit can come in the buying if you do it right.
•Not putting in the effort required. Make looking for your investment a second job, as it will pay more than your first job if you get it right!
•Buying without emotion – real growth comes when you unearth a hidden gem so buy something that excites you.
Traps
•Buying brand new. It often looks and feels great, but capital growth can be delayed when you buy into a brand new building. Older properties often have better growth in the first five years.
•Overextending yourself. If you can hold a property in a good location for seven to eight years, you should be able to realise a substantial profit every time. If you stretch yourself too far and have to sell, you may end up losing money. Make sure you can afford what you’re investing in.
•Buying with friends. Although it can seem easier to buy the property you want if you go halves with a friend, it can come undone if you have different views or circumstances down the track on the time to sell. If you are forced to sell prematurely or at the wrong time, you may lose much of your gain.
Published: Wednesday, August 31, 2011, switzerbroker.com.au
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Investors should buy now
With property prices at the bottom of the cycle, investors are being told to buy now.
Australian Property Monitors senior economist Andrew Wilson said investors should not be put off by trouble abroad, as the Australian economy is, by and large, stable.
Across most markets, property prices are at the bottom, making now the perfect time to buy,” he told The Adviser.
“But, investors are understandably nervous about what’s happening overseas and don’t want to invest. What investors need to understand is that interest rates are flat and they will remain flat for the rest of the year. As such, the outlook is good for the Australian economy.”
Source: TheAdviser.com.au
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Winner of Daydream Island competition announced
Congratulations to our Winners J & M Ryan of NSW.
A new competition will start on the 1st of September and the prize is a Smart TV Entertainment Package valued at $ 9,897.00.
In the meantime, if I can be of any assistance please call me or email me at andrew@thehomeloanadvisory.com.au.
Regards,
Andrew Krauksts -
Investment property strategies to get your foot in the door
Building wealth through property investment is a skill that can be learnt by anyone. Once you understand the basic principles, learn the rules, develop a plan and take action, you’ll be well on your way to building a profitable portfolio.
Successful property investment is more about good management than good luck. You need a simple and effective strategy to guide you.
I’m a fairly conservative and risk-averse investor and I don’t think you need to be a huge risk taker or to borrow beyond your means to create a profitable portfolio. My preferred strategy focuses on maximising capital growth while keeping risk to a minimum: buy well-located property and hold for the long term using the incentives of the tax system to help you pay for it.
This strategy enables you to build wealth quickly and manage your risks so you can sleep at night.
Location is key
This is especially true for investment property. There’s a direct relationship between location and demand, and demand is the biggest driver of capital growth. People will always prefer to live close to the CBD and they’d prefer to have the beach at their door rather than 10 blocks away.
Stick with it
I recommend holding your investment for five years, preferably longer. Many people sell prematurely because they get bored or they stop seeing immediate results. If the market flattens out, don’t despair. Just ride with it, because in two or three years’ time, the market will probably not only have caught up, it will have delivered you a handsome profit. You need to be patient while the magic of capital growth takes effect.
Tax incentives
All the rent you collect is assessable for income tax and all the expenses you incur are tax-deductible. The major expenses are interest on your loan, the property manager’s fees, insurance, maintenance, advertising and accountants’ fees.
If you buy a newer property, you’re also entitled to claim deductions for non-cash expenses, namely depreciation. Buildings are depreciable over 40 years, so you’re entitled to claim 25 per cent of the cost of the building as a tax deduction every year. You can claim a depreciation allowance on renovations as well.
You’re also allowed to claim deductions for negatively geared properties – where your costs exceed the rental income you receive. For taxation purposes, you can deduct this loss against other income but you still have to contribute cash to your property as long as it is negatively geared. Why would you want to invest and make a loss? Because the capital growth of your property is greater than the cash you’re putting in.
The other side of the coin is positive gearing. The essence of this strategy is that the return you make from the property exceeds the amount you pay in interest and expenses. Positively geared properties are easier to find in regional areas where rental yields are high and capital growth is relatively low.
However, I do recommend that you always consult your tax advisor before you make any investments.
My first investment experience
To be a successful investor, you might need to think outside the box to get started. The first property I bought was a rundown inner city terrace for ,000. I cleaned it up and rented it out for $ 100 per week. Even though it wasn’t a palace, it was a lot nicer than the $ 40 per week studio I was living in. But I chose to stay there for another two years to maximise my cash flow so I could get a foothold in the market. Looking back, I’m glad I made that sacrifice. A few years later, I sold it for $ 260,000. The lesson here is that most markets are growing faster than you’ll ever be able to save. So the question is not ‘Should I get in?’ but ‘How can I get in?’
I hope this helps you in putting together your own investment strategy for future wealth through property. And whatever your strategy, make sure you get your finance pre-approved before you start looking to buy.
Source: Switzer – John McGrath
Interested in property investment? Don’t know where to start?
Book a strategy session today! First you’ll meet with our property adviser on strategy and opportunities. Ian, our property adviser, is an active investor himself with a personal property portfolio in excess of $ 15 million. He knows his stuff. And then a session with me, where I will provide you with valuable information on how to best structure your finances to invest in property.
I look forward to speaking with you.
To your success,
Andrew Krauksts -
WOULD you like to shave 10 years off your mortgage? How much interest could this save you?
It’s not rocket science, it’s simply a matter of making more repayments more often and making sure you’ve got the best mortgage for your situation.
Of the millions of homeowners, only some are getting out from under mortgage payments years, sometimes decades, before their neighbours. How?
They make an effort to pay off their mortgage early.
The average home loan is now about 0,000, but living mortgage-free is not a pipe dream.
You may only need to find an extra $ 200-$ 500 every month so that you can exceed your mortgage payments. While many think they can’t afford that, you’d be amazed at how much money you can save on a monthly basis.
KNOW YOUR BUDGET
Suncorp Bank executive manager of personal lending Tony Meredith says many people don’t know exactly where their money goes.
“Get to know your incomings and outgoings, and identify where savings can be made. You may be astounded to learn just how much you’re spending on eating out, takeaway or coffees each month,” he says. “By paying even an extra $ 20 per fortnight off your mortgage, you can make a significant difference to the balance.
“Spend your tax returns wisely. For example, depositing a $ 2000 tax return as a lump sum into an average $ 300,000 mortgage can potentially shave about eight months off a 30-year-term, saving a mortgage holder almost $ 12,000. Do this each year and watch the years drop off your loan.”
WORK IT OUT
There are plenty of free online mortgage payment calculators which will show you exactly how much money you can save by ramping up your repayments.
The monthly repayments on a $ 300,000 mortgage over a 25-year term at 7.25 per cent are about $ 2168. But a person could pay the loan off 10 years earlier and save $ 158,277 in interest by increasing their monthly repayments by $ 575.
Finding the extra money might not be easy, but it’s surprising how much people can reduce their incidental spending if they scrutinise their household budget. Ask yourself if you really need it, or do you just want it?
PAY FORTNIGHTLY INSTEAD OF MONTHLY
AMP financial planner Dianne Charman says on a $ 300,000 mortgage, a person can cut four years and six months off the life of the loan and save $ 82,823 in interest simply by swapping to fortnightly repayments.
“The loan is reduced faster as there are 26 fortnightly repayments each year, instead of 12 monthly repayments. If the person was to also boost repayments by $ 180 a fortnight, it would shave 10 years off the mortgage,” she says.
LUMP SUM REPAYMENTS
People can also attack their loan faster by making lump sum repayments whenever they can.
Charman says tax returns, work bonuses or inheritance money can all be pumped straight into the mortgage to help reduce interest.
“On a $ 300,000 mortgage, one lump sum payment of $ 5000, made five years into the loan, would save $ 15,681 in interest and reduce the term by 10 months,” she says.
“While it’s tempting to spend cash windfalls, people should try to stay focused on the main prize, that is to be debt free sooner.”
Brontie Chambers, manager of products and member value at Community CPS Australia, says even $ 5 extra each week can save you thousands of dollars in interest over the life of the loan and reduce your home loan term.
“However, make sure your loan allows you to make additional repayments without penalty,” she says. “Fixed-rate and basic (or ‘no-frills’ loans) often have restrictions on extra repayments or charge a fee for the privilege.”
KEEP YOUR SAVINGS IN AN OFFSET ACCOUNT
Since the global financial crisis, Australians have started saving again. While many people choose to park cash in high-interest online accounts or term deposits, it may be better to save in a 100 per cent mortgage offset account.
Any money in the offset account will be working to reduce interest and pay the loan off faster.
Another advantage of mortgage offset accounts is the cash can be easily accessed if necessary.
CONSOLIDATE YOUR DEBTS
You could can end up paying less interest because home loan interest rates are often much lower than personal loan, credit card and store account rates.
Chambers says that by reducing your monthly repayments into just one home loan repayment, you could reduce your monthly commitments so that you have extra cash available to make additional repayments off your home loan.
“However, this option requires discipline around future use of credit cards and store accounts, such as reducing limits or closing the account,” she says.
SWITCH CAREFULLY
Home loan exit fees have been abolished on all mortgages taken out from July 1, 2011, making it easier for consumers to shop around for a better deal.
However, people with loans taken out before this date need to carefully consider the costs associated with moving a mortgage.
There can be numerous exit and set-up charges which include early termination fees, application fees, discharge and registration fees, mortgage insurance and valuation fees.
Before making the switch, it’s important to check whether all these costs will outweigh the potential savings from having a lower interest rate, and how long it will take to break even.
Edwards Marshall Financial Solutions manager Grant Edwards says one of the biggest mortgage-busting tips is to make sure that your interest rate and bank fees are competitive.
Reduce or stop using your credit cards it’s too easy to spend other people’s money. Any reduction in discretionary spending will reduce credit card repayments and the money saved can then be allocated to increased mortgage repayments.
“Don’t spend your tax refund, pay it off your mortgage. Make sure your gas, electricity, phone and internet providers are the best deals you can get,” Edwards says.
“Allocate whatever you can save on these costs to increasing your mortgage repayment. If you’re offered overtime or a second/part-time job, consider taking it and allocate the increased income to reduce your mortgage.
“Even if it might not seem like much, every extra dollar you pay off your mortgage goes off the principal, which is the real driver to mortgage reduction. For example, a 10 per cent increase in mortgage repayments will reduce the term of the mortgage by 20 per cent.”
LOW MORTGAGE RATE AND INTEREST RATE
Make sure you have the best interest rate you can find. Most home loan mortgage rates should be offered at between 7 and 8 per cent interest. If you are higher, refinance now. Keep track of every penny that you spend for a month or two and you’ll be amazed at how much of it is frivolous.
PLAN AHEAD
It is a good idea to factor in further rises in interest rates and, if possible, start making contributions at the higher rate. It will ease the stress when repayments do increase and will also put you ahead of the scheduled loan term.
Alternatively, if rates decrease you should keep your repayments at the higher amount to enable you to pay off your loan sooner.
Source: News.com.au
Like to know more … simply download our free report and video series and learn how to correctly set up your bank accounts and link them the right way…
Any questions? Email me at andrew@thehomeloanadvisory.com.au , we’re here to help …
Regards,
Andrew Krauksts -
Property in Sydney and Melbourne run hot amid winter
SYDNEY realtors defied the gloomy winter weather, with auction clearance rates hitting a 10-month high on the weekend.
Home-buyers braved Saturday’s rain, spending $ 117.7 million on 148 properties across the city, pushing up the clearance rate to 63.5 per cent from 52.6 per cent the week before. It was the highest rate since September, The Australian reports.
The Sydney clearance rate has only topped 60 per cent on six occasions since September 11, when it hit a high of 69.5 per cent.
The Melbourne market also rose, with realtors clearing 61.7 per cent at auction on Saturday, generating $ 60.3m as 92 properties sold under the hammer.
A week earlier, 130 properties were sold, netting $ 73.3m, with a clearance rate of 55.1 per cent. Melbourne’s highest rate in the past 10 months was on October 30 last year when 72.7 per cent of properties were cleared at auction.
Real Estate Institute of Australia acting president Pamela Bennett said the upturn was due to vendors being more realistic about meeting buyers’ price expectations, as well as people’s desire to move on in life.
“It is always difficult to know all the indicators, but the market has been quiet and low for a while and it gets to a point where people want to move on with their life; they see what they like and they want to buy,” Ms Bennett said.
Source: news.com.au
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