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What does off-the-plan mean – and what do you need to know?

Ironfish — Mon, 21 Sep 2020 00:14:49 +0000

Whether owner-occupier or investor, the majority of people in Australia buy ‘second-hand’ property – that is, a property which has already been built, ranging from a few years old, to over a hundred years old in the case of Federation era homes or terraces. A second category is new property or buying ‘off-the-plan’ – which tends to be far less understood, and therefore more difficult to navigate on your own, especially as a new investor or first home buyer. Buying a house, apartment or townhouse ‘off-the-plan’ means signing a contract to buy a property that is yet to be built. You can view the developer’s plans, designs and renders for the property, but can’t view a physical building. Buyers pay an initial deposit – typically around 10% – and pay the balance at settlement once construction of the property is completed. The timeline can vary depending on whether it’s a house or apartment as well as a number of other factors. Currently most of the Government incentives for first home buyers apply primarily to new or off-the-plan property only. In NSW for example, the state government recently announced that stamp duty will be waived for first home buyers purchasing new properties costing up to $800,000 – representing up to $31,335 of savings. But while first home owner grants and stamp duty savings may be the first draw card for some, there are other factors which greatly increase the appeal of off-the-plan property, particularly for investors with a ‘buy and hold’ strategy. Experienced investors are aware of certain cashflow advantages. For example, the difference between the depreciation claimable for second-hand versus new properties is substantial; representing potentially thousands of dollars-worth of depreciation – resulting in a positive cashflow over the year. There are other benefits too; from being able to enjoy contemporary, architectural design to less maintenance requirements than older, established properties. At the same time, there are also some factors to be aware of prior to making a purchasing decision. Uncertainty around construction timelines, quality and markets are key considerations as well as the finer details such as contract structure, inclusions or certain tactics such as ‘bait pricing’. To help potential first home buyers or investors understand this subject, Ironfish has put together a comprehensive ‘buyers guide’ to buying off the plan. Ironfish is a national property investment services company with an in-house property selection and research team which monitors the market and identifies great quality apartments, townhouses and house and land packages in excellent locations for our investors. The property team conducts a rigorous due diligence process to assess each property, to make buying off-the-plan as simple and convenient as possible and to provide additional peace of mind for buyers. Bringing together Ironfish’s 14+ years of experience in this specialised area, reviewing thousands of new developments, this guide covers each property type in detail – houses, townhouses and house and land – complete with checklists and FAQs. As a preferred property partner, Ironfish is offering BMT customers a free copy of this eBook which can be downloaded below: Download “A Guide to Buying Off-the-Plan” For more information about Ironfish’s property selection and other investment services, or to learn more about buying off the plan, please book a free consultation with one of Ironfish’s experienced strategists or visit www.ironfish.com.au. Article supplied by Ironfish. Information current at time of publishing.

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What’s happening in the commercial property market

BMT team — Tue, 22 Oct 2019 22:24:48 +0000

Most of the published information about commercial real estate relates to the highly visible ‘prime’ end of the market, but sometimes this gives a distorted view of the market. It’s important to consult trusted real estate agents to reveal the data associated with the less examined small and medium size market. Commercial real estate agents closely monitor market activity, as well as legislative changes and expert analysis to track responses to market conditions, like fluctuation in rental prices. The rent a property can command closely determines the value of commercial real estate, much more than with residential properties. Here’s a glimpse, from the perspective of rental asking prices at what’s happening and why in the Australian commercial real estate market. National market overview Major markets Office, Retail and Industrial National market overview The Australian commercial property market is made up of three major city markets – Melbourne, Sydney and Brisbane. These cities account for the lion’s share of the national commercial real estate industry. In the current market, there’s no shortage of events influencing sentiment towards commercial real estate. The three major metropolitan markets act in unison, responding and reacting in real-time to many local, national and international events as they hit the news. Commercial real estate has experienced cyclical highs and lows, lasting two years between property highs. National asking rent increases peaked in early 2017 at very high levels then trended downwards through to May this year when price increases have again shown signs of increasing in recent months. Major markets Sydney has experienced several peaks and troughs throughout the past few years. These cycles have lasted approximately 10 to 14 months between peaks. While Sydney’s commercial real estate rent rises sailed through previous national elections unfazed, this year was different. Sydney office rents dropped prior to the federal election and have since shown a rise in the months following. Melbourne and Brisbane are not synchronised with Sydney. Melbourne rent increases followed with a slow and graceful decline. However, there has been an upswing in lease prices since the middle of 2018. While Brisbane rents have managed only increases of 1 per cent every three months at best. Office, Retail and Industrial Office asking rent increases have been in what stockbrokers would call a ‘trading range’ for many years, starting in January 2017 with a slow declining peak over each of the last three successive cycles. Recently, there have been signs of a breakout from the trading range. Retail rents paint an interesting picture. The retail market was on the decline for quite some time. Since July 2018, retail rents have shown an increase, despite the gloom portrayed by some of the media. In comparison, the industrial property market has been travelling well and has enjoyed reasonably stable rent growth over the last five years. Commercial real estate properties are valued based on the revenue they can generate. The change in rent not only affects what the tenant pays, but also the value of the landlord’s asset. To keep updated on the commercial property outlook, check out Commercial Property Guide’s Asking Price Index. The Index brings together hundreds of commercial real estate agent opinions about the future direction of commercial real estate price movements. It measures the change in sentiment of experienced and expert agents on the future direction of commercial property prices. Article by Commercial Property Guide

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Could this regional city be the next property hotspot?

Simon Pressley — Mon, 19 Aug 2019 06:54:28 +0000

A high proportion of property investors often overlook regional locations which offer great potential. Right now, one of the strongest property markets in Australia is the inland regional Victorian city of Mildura. Mildura’s 7.8 per cent increase in median house price over the last twelve months is superior to all Australian capital cities. Only Hobart, Canberra and Melbourne have produced a higher rate of capital growth over the last three years. You’ll get change from $300,000 for a good quality house in Mildura and the 6.1 per cent median rental yield, regardless of the size of your deposit, puts a standard investment property in cash flow positive territory. While several capital cities are currently feeling the pinch from housing over-supply, Mildura’s vacancy rate of 0.6 per cent is reflective of one of the tightest rental markets in the country. As for employment opportunities, the 6.9 per cent increase in job advertisements over the year ending May 2019 is higher than six out of eight capital cities. There’s no such thing as a ‘perfect’ property market however, as you’ll see throughout this Mildura Property Market Research Report, this location certainly ticks the right boxes. Mildura property market history Over the last twenty eight years, Mildura’s median house price has more than tripled from $78,000 in 1990 to $270,000 as at December 2018. The trend line in the below chart confirms how incredibly consistent the market has been for just shy of three decades, with the average annual growth over the period being 4.5 per cent. The largest property market downturn ever experienced in Mildura was in 2008 (the year of the GFC) when the median house price declined by just $10,000. Contrast this against the $225,000 decline in middle-ring Sydney over the last two years and one can only hope that property investors are now starting to re-evaluate Mildura’s potential. Over the most recent five years (ending March 2019), Mildura’s 25.6 per cent price growth is on par with Canberra and superior to Brisbane, Perth, Adelaide and Darwin. As for rents, according to CoreLogic, Mildura’s current median house rent is $320 per week. Rents have increased by 18.5 per cent over the last five years and 6.7 per cent over the twelve months ending March 2019. Mildura population Located on the Victorian side of the Murray River, Mildura is the largest settlement in the Sunraysia region. Mildura is an important service centre for dozens of smaller country towns within a 100-kilometre radius. During 2017-18 the inland city had a population growth rate of 0.8 per cent, equal to Adelaide and driven largely by overseas migration. The demand from overseas migration is led by skilled labour, particularly to support the region’s agriculture productivity. Mildura housing supply Based on Mildura’s average annual population growth over the last five years (477) and its average household size of 2.4 people, the base-level demand for extra housing in Mildura is 199 dwellings per year. According to Australian Bureau of Statistics data, an average of 293 new dwellings have been approved in Mildura over the last five years. On face value, the data suggests recent supply should have been sufficient for recent demand, but the reality says otherwise. Mildura’s dwelling stock increased by 428 between the Census periods – enough for an increased population of 1,027 people. However, ABS data shows the actual population growth across this period was 2,742 (1,715 more than supply accommodated for). For much of the last decade, roughly seventy residential dwellings were recorded as ‘vacant’, or a vacancy rate of just shy of 2 per cent. All considered, Mildura’s rental stock would benefit from an additional forty to fifty dwellings. Mildura property market outlook Mildura is a shining example of a regional location that continues to produce solid results. Advantages: Mildura is one of the most accessible property markets in Australia for owner-occupiers and investors Current housing under-supply places pressure on real estate prices Continuation of tight supply is likely to maintain pressure on prices Strong housing demand is driven by healthy local economic conditions and overseas migration to meet skills labour shortages Exciting outlook for the Australian agriculture sector presents a great opportunity for regional cities like Mildura Strong investor cash flow supported by high rental yields and prospect for further rent rises Disadvantages: Declining internal migration Property growth cycle is already underway, although this is no suggestion of the cycle being too advanced for new buyers to benefit from

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Is Australia’s apartment love affair like The Bachelor?

Simon Pressley — Mon, 21 May 2018 06:05:25 +0000

There’s an interesting relationship unfolding between the supply and demand of property markets in Australia’s biggest cities. I use the term ‘relationship’ loosely because what I’m referring to is about as scientific as that (un) reality TV show, The Bachelor. As we’ve seen over and over (make that ‘my wife has seen’ – I don’t watch the show), simply placing an attractive man and an attractive woman in a romantic hideaway is absolutely no guarantee that they’ll be compatible. It’s not that dissimilar in Australian property markets at the moment. It seems that developers and city councils are concocting their own version of The Bachelor. The plot goes something like this ‘… our population is growing, they all need to live somewhere, we’ll whack up as many high rises as we can, they’ll buy whatever we build.” They’ll all live happily ever after. Apparently! In Propertyology’s opinion, the enormous increase in the ratio of apartments to total new dwellings built in Melbourne, Canberra, Brisbane, and Darwin raises a big question mark over how these values might perform over the next decade. It’s one thing to question whether the total volume of new dwelling supply is equal to, above or below what is required to accommodate the increased population in different locations. It’s a completely different thing to evaluate whether what has been built is what the public actually want. There will always be an emotional connection between human beings, the style of dwelling that each household desires, and which part of town they want to live in. Developers don’t determine that, buyers do! According to official data, roughly 50 per cent of capital city households are families with children and, if anything, the average number of people living within each household is increasing. But for some inexplicable reason, the proportion of apartments to detached dwellings is increasing from three out of ten to almost one for one; in some cases, even higher. There’s no question that demand for apartments in Australia’s biggest cities is increasing however, the rate of apartment construction is occurring far too fast to be tested by those who they are being built for – the Australian public. For generations subsequent to the arrival of the First Fleet at Botany Bay in 1788, detached houses were the only style of dwelling built. Fast forward to 2016 (the last Census) and 43 per cent of Greater-Sydney’s 1,855,734 total dwelling stock were apartments and townhouses. And since the 2000 Sydney Olympic Games, six and a half out of every ten new dwellings approved were apartments. Evolution! Five consecutive years of record volumes of new (overall) supply may very well result in Sydney dwelling prices declining over these next couple of years. However, at least public demand for apartment living has been well and truly tested. Melbourne is a completely different story. The 2016 Census confirmed that 32 per cent of Greater-Melbourne’s total dwelling stock of 1,832,043 were apartments and townhouses. That’s quickly changing with the volume of apartments constructed over the last five years being three times higher than the long-range average. We already know about Melbourne’s population growth being phenomenal. We also know that supply of new dwellings has been at record high volumes for several years. But it seems that Melbourne developers and city councils have just rushed in and decided that they’ll marry the two together by assuming everyone has the same personality. From the start of 1985 to the end of 2017, Victoria’s average quarterly dwelling completions consisted of 7,281 houses and 2,711 apartments (9,992 total dwellings per quarter). In other words, for every ten dwellings completed, only 2.7 were apartments. From June 2012 to December 2017 (the largest residential construction boom in Australian history), the total quarterly volume of dwellings completed in Victoria increased significantly to 14,203. Detached houses represented 7,880 (much the same as the 33-year average) while 6,323 were apartments. For every new house built in Melbourne there’s now just shy of one new apartment built as well. The courting period for Melbourne’s growing population and the style of digs that they prefer to live in has not been long enough. While it’s clear that the property sector has a love affair with building apartments, the odds of a perfect match with the public is as scientific as The Bachelor. In contrast, Sydney dwelling completions during the five year residential construction boom produced a ratio of apartments to houses of slightly more than one (51.7 per cent). But the important difference is that Sydney is an extremely mature apartment market. Its relationship has been tested whereas Melbourne’s hasn’t. Melbourne’s median dwelling values have been consistently declining since January 2018; the large volume of supply of total dwellings has certainly played a part in this. But it’s the sudden structural change in dwelling style that Propertyology questions. 68 per cent of new dwellings completed in Canberra over the last five years were apartments and townhouses. And there’s more in the pipeline with 78 per cent of dwelling approvals over the last three years being for attached dwellings. That’s quite a step up from the 48 per cent three decade average. The proportion of attached dwellings completed in Brisbane (from 31.9 per cent to 42 per cent) and Darwin (41.7 per cent to 51.7 per cent) has also increased significantly. At the other end of the spectrum, only 15 per cent of Hobart’s dwellings are apartments and townhouses. Sure, apartments provide an affordable option for living closer to town. But suggesting that everyone wants to live in an apartment close to town is akin to only inviting six-foot tall brunettes on The Bachelor. Buying a property is the largest financial decision that most people ever make. People want to live in what they want to live in. It’s foolish to expect that thousands of people will fork out $600,000 plus on one asset that they’re not happy with. Maybe they’ll continue to rent. Maybe they’ll completely relocate to a different city where they […]

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Key things to consider when choosing a Tax Accountant

Chan Naylor Team — Tue, 20 Mar 2018 00:20:29 +0000

When you’re a property investor, it’s common to work with a number of experts during the time you hold your investment. It’s likely that one of these will be an Accountant. While hiring a Tax Accountant comes with a fee, this is often a small price to pay when you think about the unforeseen and hefty taxes they may help you avoid and the strategies they can put in place to help you get the most from your investment. While there are a lot of Accountants out there, you should do some preliminary groundwork to ensure you choose the right one for you. Firstly, check they have expertise in the areas relevant to you. Your Accountant should have a good deal of experience working with other clients in the same or a similar situation to yours. This means that the Accountant has worked on complex situations before and has already been exposed to a broader set of issues relevant to your situation. You should also know the number of years the Accountant has been in the field. Ideally, you’ll want them to have at least five years of experience doing individual tax returns. It is also better if your Accountant has a certified public accountant license, even if it isn’t necessarily required. There are many Accountants who do tax work even without special training in tax, so it is preferable that you choose one with more advanced training. Experience is good but a formal education is better as this may offer a broad perspective in individual, partnership, corporate and fiduciary tax. You should also make sure that your Accountant will stand by the tax return he or she prepares for you and represent you in case of an audit. With this, the Accountant should review your past tax returns at no extra charge. This only takes a few minutes and it will demonstrate his or her willingness to serve you. An Accountant typically charges by the hour and the rate varies by location and seniority. To help lower your fees, make sure you come to any meetings organised so you spend less time with your Accountant. Use a spreadsheet or a QuickBooks file to easily show him or her your income, expenses and other relevant information. You should also pay attention to their personality and the gut feeling you get from them upon your preliminary meeting. It’s important that you feel comfortable with your Accountant as you will have to ask plenty of questions and share what is often personal information with him or her over time. Finally, have a think about location. While some investors may prefer their Accountant to be based locally, this is not a necessity anymore as you can send your documents easily via email or Dropbox. Nevertheless, if face-to-face meetings are important to you, be sure to research the location of your prospective Accountant and get an idea of what hours they are generally available to meet. If you need a reliable Tax Accountant, visit the Chan & Naylor website to learn more about our services. You can leave your details and we can schedule you in for a free consultation. Chan & Naylor Group has nationwide offices in Brisbane and Capalaba in Queensland, Melbourne and Moonee Ponds in Victoria, East Perth in Western Australia, and South West Sydney, Parramatta, Pymble, North Sydney, and Sydney in New South Wales.

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Research reveals new housing demand hotspots

Simon Pressley — Wed, 07 Mar 2018 01:02:54 +0000

Contrary to general belief, population growth is not the biggest influence on property prices – far from it, in fact. There are a range of factors that influence the demand side of the property price equation. Aside from affordability, the biggest influence is economic conditions. Jobs. Jobs. Jobs! Propertyology’s recent analysis of national job data for the 2017 calendar year concluded that numerous locations across regional Australia may soon see considerable strength build in their property markets. In alphabetical order, Albury, Armidale, Ballarat, Ballina, Bowral, Cairns, Coffs Harbour, Dubbo, Mackay, Muswellbrook, Port Macquarie, Townsville, Warragul and Warrnambool are likely to see increased market activity over the coming year or two. A marked improvement in local economic conditions was a key driver that transformed 2011-12 property price declines in Sydney and Melbourne into boom markets over the last four years. Similarly, it’s not that long ago that Tasmania was in recession but the remarkable turnaround in its economy now sees Hobart as Australia’s hottest property market by a country mile. Sustained job growth within a community puts more money in people’s pockets, attracts new people to a region and boosts local confidence. It increases the chances of renters becoming home owners, provides home owners with confidence to renovate, increases demand for local goods and services, and gets more people at open homes. Tracking trends of job volumes is a more reliable measurement of the direction a localised economy is heading in, rather than looking at isolated unemployment rate. At a capital city level, Melbourne (10 per cent), Hobart (there it is again ~ 9.8 per cent), Canberra (8.7 per cent) have produced the largest increases in jobs over the last two years. While the measurement of job volumes is far from the only metric that Propertyology look at, it’s no coincidence that these numbers correlate with property market performance. While Brisbane is (finally) producing some encouraging employment data, inner-city jobs continue to reflect the post-mining boom pinch. The miserable 1.9 per cent increase in CBD jobs over the last two years is not the only disappointing data. CBRE recently reported that commercial office vacancy rates were 16.2 per cent (in other words, one in six Brisbane offices is empty). The significant number of regional locations that have produced rates of job growth above the two-year national average of 6.6 per cent is reflecting strong regional tourism, a very exciting outlook for Australian agriculture, advanced manufacturing (especially food-related), some good infrastructure projects, and a rebound in (parts of) the mining sector. The strong growth in retail, accommodation and food, and arts and recreation jobs reflect the sustained strength of Australian tourism. From 5 million international visitors in 2008, Australia is on target for 10 million by 2020. But, it’s more than the traditional holiday hot-spots of Sydney, Melbourne, Brisbane and the Gold Coast that people are now visiting. With more affordable airfares and a significant increase in destinations that now offer direct flights within one or two hours, tourists are exploring alternative attractions throughout Tasmania and mainland regional Australia. The continuous extra demand from international and domestic tourists is creating new jobs in great cities like Cairns (tropical wonderland), Dubbo (Western Plains Zoo), Orange and Armidale (foodie experiences), Bendigo and Ballarat (our gold rush heritage), and regional Tasmania (because, well, it is God’s country!). If Queensland can ever get its act together with a serious tourism campaign, the state with more tourist attractions than any other has the potential to set economic records. And, when the cash registers start ringing again, Queensland’s affordable housing and desirable lifestyle will drag interstate migration well above 20,000 per year. That’s one of the most sustainable growth drivers that any property market could wish for. April’s Commonwealth Games is just a short sugar fix; the state still lacks a long-term tourism strategic plan. While growth in jobs for regional Australia is well overdue, the 2017 data just supports the trends that Propertyology flagged a few years ago and has influenced our decision on a few locations across that our buyer’s agents are helping people invest in. Aside from Australian tourism, the millions of extra people entering the middle class each month during the Asian Century have an enormous attraction to our produce. This nation that was first built off the sheep’s back is now Asia’s food bowl. Universities have recently experienced an unprecedented increase in agriculture-related degrees. And new manufacturing jobs are being created by food processing businesses such as abattoirs, cheese factories, and wine making. Renewable energy is a fast-emerging sector that benefits regional economies more than capital cities. Household budget pressures and environmental pressures are the trigger for billions of dollars already being invested in job-creating wind, solar and battery projects across this vast country. 2017 was one of the strongest years for job growth in Australian history, with a 5.7 per cent increase in volumes for the year. And it wasn’t a year in isolation – total jobs in Australia for the last two calendar years have increased by 6.6 per cent. Closer analysis of ABS data shows that the industry sectors which produced the largest rates of employment growth in 2017 were health (104,317), construction (100,664), retail (60,064), education (40,991), accommodation and food (36,485), and agriculture (28,901). A 2017 net job loss occurred in manufacturing (85,060), admin and support (28,698), public admin and safety (27,433), and mining (4,688). One would assume that a significant portion of manufacturing job losses in 2017 related to Toyota and Holden plant closures (Adelaide and Melbourne) late last year. The health sector is Australia’s biggest direct employer (13.3 per cent of all jobs). The recent growth in the health sector is indicative of our aging population combined with the rollout of new positions under the NDIS program. Propertyology believes that Australia’s construction industry (the backbone of our economy) is now at an interesting cross road. Completion of the mining construction boom in 2012-13 resulted in large volumes of workers in this sector being redeployed to new residential […]

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2018 property market outlook

Simon Pressley — Mon, 15 Jan 2018 05:19:37 +0000

This time last year, Sydney and Melbourne were in the middle of a property market boom and every property market analyst in Australia was predicted that those same cities would again finish top-of-the- table in 2017. Everyone except Propertyology, that is – we were the one black sheep who made the bold prediction that Hobart would be Australia’s best-performed capital city for 2017 [refer here]. Similarly, we also said that several regional locations would perform well. Now that the jury is out, let’s review what did happen in 2017 and see what our crystal ball says for the year ahead. Who were the winners and losers in Australian property markets during 2017? Melbourne (12 per cent) and Sydney (10 per cent) produced their fifth consecutive year of strong growth. Canberra (7 per cent) was the surprise packet, while Adelaide was also steady. On the other hand, Perth and Darwin had their third year of declining prices. Brisbane (3 per cent) was again underwhelming. Australia’s third biggest city has only seen 35 per cent compound growth over the nine years since the onset of the GFC while Sydney, Melbourne and Hobart produced that in just two to three years. Australia’s most affordable capital city, Hobart, has been the clear stand out in 2017 with 14.3 per cent growth for the twelve months ending September 2017. Given that Hobart also has the best rental yields in the country, the total return (capital growth + yield) is 5 per cent more than Melbourne and 7 per cent more than Sydney. With three months of data yet to unfold to round out the 2017 calendar year, we believe Hobart will end 2017 with at least 16 per cent price growth. That will make it the largest annual increase by any capital city in ten years. What is driving the Hobart property market? As predicted by Propertyology when we began investing in Hobart in mid-2014, the Tasmanian economy has been the most improved in Australia by a long streak and, as usually happens, its property market followed suit. The Apple Isle has some of the best agricultural products and tourism experiences in the world; Hobart is also a beautiful university city. But it’s only recently that people outside of Tasmania have grown to appreciate this. Chinese President, Xi Jinping, made a special visit to Hobart (and only Hobart) in 2014 to foster business relationships and now the secret of Tasmania is well and truly out. The rate of employment growth in Hobart over the last year was four times the national average and double the next best capital city. The economy doesn’t appear to be slowing down either; job advertisements have a very steep trajectory. Records keep being broken in retail trade (the cash registers are ringing loud) and visitor volumes (domestic and international). The strong economy and high consumer confidence means that locals are keen to transact in property and there certainly aren’t any affordability barriers. How did regional Australia perform in 2017? Newcastle (12.7 per cent) and Wollongong (15.5 per cent) again benefitted from the Sydney knock-on effect. Lifestyle markets like Byron Bay (14.1 per cent) and Port Macquarie (9.3 per cent) also performed very well. Lesser-known New South Wales locations such as Maitland (6.2 per cent), Bathurst (6.5 per cent), Dubbo (5.3 per cent), and Orange (4.7 per cent) performed better than four out eight capital cities. The tomato capital of Australia, Guyra, had a stellar year with 16 per cent growth. In Victoria, Geelong (7.9 per cent) had another good year and Ballarat (4.2 per cent) was solid. Vindicating Propertyology’s belief from a couple of years ago that parts of regional Australia with specific agricultural products and locally-based food manufacturing businesses would do well, Colac was a stand out with 19.6 per cent price growth. The underrated rural township of Goondiwindi was Queensland’s star performer last year with 20 per cent price growth. Gold Coast (7.8 per cent), Sunshine Coast (5.7 per cent), and Beaudesert (5.5 per cent) again performed better than the state’s capital. While major regional service centres such as Townsville, Rockhampton, Gladstone and Mackay saw price declines, they all produced an increase in sale volumes and there are a number of positive things soon to impact their respective economies which will flow through to property prices. A 6 per cent increase in transaction volumes in the industrial township of Port Augusta forced the median house price up by 13.2 per cent over the last twelve months. In Western Australia, the lifestyle markets of Broome and Busselton were price growth neutral over the last year while the performance of Albany and Geraldton was in line with Greater-Perth’s, producing a mild decline and showing signs of stabilising. Port Hedland (-33 per cent) and Karratha (-22.6 per cent) had big falls. Launceston (-1.2 per cent), Burnie (2 per cent), and Devonport (2.9 per cent) were yet to show any property price growth resulting from Tasmania’s improved economy although sales volumes have increased and days-on-market are reducing. How will Sydney and Melbourne perform in 2018? 2017 was the fifth year of Sydney and Melbourne’s growth cycle and, even without APRA’s recent credit-tightening intervention, logic would suggest that the property markets of Australia’s two most expensive cities are due to moderate. While there are no immediate signs of Sydney’s economy slowing down, auction clearance rates and sale volumes suggest that Sydney’s property market had flattened right out by the end of 2017. Property prices appear to be well out of reach of most of the buying public and local sentiment has been dampened by suggestions from some economists that prices could fall by as much as 10 per cent. There are real risks with Sydney’s market however, all things being equal, Propertyology’s view is that Sydney property prices are likely to be largely flat for some years. Our analysis of building approval data is such that we see potential for unit prices to ease in some parts of Sydney. Melbourne ended 2017 […]

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Claiming work related deductions, car and travel expenses

BMT team — Mon, 20 Nov 2017 22:07:23 +0000

A very easy way to boost your tax return refund is by taking advantage of the deductions that you can claim. When you complete your tax return, you will be entitled to claim deductions on expenses you’ve incurred, which are related directly to earning your income. If you want to claim work related deductions, the money spent from your pocket must not have been reimbursed by your employer. The expenses should be directly related to earning your income and you have a record to prove these expenses. Car and travel expenses are costs that many people claim in their tax returns but not all travel and car expenses are deductible such as travel to and from work. Properly claiming these expenses cannot only save you a lot of money but can keep you out of trouble with the Tax Office. If you use your car for work, the claimable travel and vehicle expenses are leasing, depreciation, registration costs, insurance costs and costs of running such as fuel, oil and servicing. You cannot claim expenses for your private use or those related to voluntary work. You can also claim by using the kilometre travelled for business method. The Tax Office gives you a rate that is used based on the type of vehicle you have. There are many complex deductions which you can claim to reduce your taxable income. Make sure you are claiming all deductions available to you by working with a professional that can help you maximise your tax return. What can you do? If you would like to know more about how you can protect your assets, you can click here to know more about Chan & Naylor’s services. You can leave your details here and Chan & Naylor will schedule you for a free consultation. Whether you are a beginner, seasoned investor or business owner, Chan & Naylor can give you guidance to maximise the financial areas of your life. They can give you an integrated solution of your superannuation, taxation, property investment, asset protection, estate planning and more. If you like what you are reading, you can subscribe to Chan & Naylor’s newletters at www.chan-naylor.com.au. Disclaimer

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Australian expats and foreign investors to face tax reforms and CGT exemption lift

Chan Naylor Team — Tue, 03 Oct 2017 23:54:44 +0000

Under the proposed housing affordability laws, Australian expats might see an increase in tax liability when they sell their Australian homes. While living overseas, they could lose the Capital Gains Tax (CGT) exemption on a home which used to be their main residence to give Australian buyers an opportunity to purchase properties. The reform is part of the policy changes in property investment aimed to improve housing affordability. Currently, Australian residents are fully exempt from CGT on the sale of their main residence throughout the ownership period. The capital gain is included in an individual’s taxable income and calculated as part of income tax. Australian residents are also partially exempt if the house was their main residence for only part of the ownership period. The absence rule allows them to treat a home as their main residence for CGT purposes for an unlimited period of time as long as they don’t rent it out. Meanwhile, Australians living abroad for work can qualify as non-tax residents, which removes their Australian tax liability while they live abroad. However, the new policy will no longer grant them the absence rule or offer a partial exemption for the period when their home was their main residence. Foreigners who live and own property in Australia, on the other hand, are exempt from CGT as long as they are not foreign residents when they dispose of the home. There is, however, the new ghost house levy for foreign owners of Australian property in case it is unoccupied or available for rent for at least six months of the year. Their non-final withholding tax upon disposal of a taxable Australian property has been increased to 12.5 per cent of the sale value as well. Its threshold was also lowered to $750,000. The proposed changes apply to properties bought from 7:30pm on the 9th of May 2017, while those who have purchased their properties before that would have until 30 June 2019 to sell before losing the exemption. Investors who own a home for over twelve months, which is not their main residence, get a 50 per cent deduction on their CGT as well. However, non-residents are not entitled to the discount. Others believe tax incentives are higher than incoming rent and that the housing affordability crisis will remain as long as the government does not reform the CGT exemption and negative gearing. However, some people believe the reform will only affect foreign investors who do not vote. A fairer approach could be to tax the capital gain based proportionately on the period of non-residency of the ownership period, instead of just determining whether the person is a resident or not at the time of sale. What can you do? It is important to seek professional advice in navigating the different market conditions in Australia. Chan & Naylor does not sell properties so it remains unbiased. We would love to help you whether you are a beginner or seasoned property investor. Click here to schedule a chat or call any of our local offices near you. If you like what you are reading, subscribe to our newsletters now at www.chan-naylor.com.au. Disclaimer To view the original article, click here.

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The housing market performance: 2016-2017 financial year

Chan Naylor Team — Mon, 28 Aug 2017 23:58:45 +0000

In the past two decades, there were only two years when combined capital city dwelling values fell. Last year, these values rose by 9.6 per cent which was higher than the 8.3 per cent increase recorded in the previous financial year. Combined capital city dwelling values have risen in the last five financial years but in 2010-2012, there were successive financial years when values dropped. Individual capital city growth in recent years is a different story. In Sydney, dwelling values rose by 12.2 per cent during the past financial year, its fifth successive financial year in which values increased. This value growth was greater than the 11.3 per cent growth in the previous financial year. In Melbourne, values have risen for five successive financial years, each of which saw a faster value growth rate. Last year, Melbourne values rose by 13.7 per cent which was the cities highest growth since 2009-2010. Brisbane, on the other hand, saw a 2.0 per cent growth in values last financial year, which was down from the 5.3 per cent growth recorded in the financial year prior. Brisbane’s values have risen over the last five years but the previous year was its slowest growth since 2012-2013. Adelaide also experienced a 2.4 per cent increase in values last financial year, which is slightly higher than the previous year’s 2.1 per cent growth. It also marks Adelaide’s fifth consecutive financial year in which values rose. Meanwhile, Hobart and Canberra dwelling values have both increased over the past three financial years, whereas Perth and Darwin dwelling values have dropped for the same three consecutive financial years. Factors which have influenced the rebound in capital gains last financial year included changes in investment activity following macroprudential measures from the Australian Prudential Regulation Authority (APRA) and rate cuts during May and August 2016. Investment activity across the housing market may slow further following new macroprudential policies announced in March 2017. The 2017-2018 financial year may come with lower capital gains than 2016-2017 because of higher mortgage rates and affordability constraints. For more information about property investment in Australia, contact a specialist to discuss your particular circumstances. If you like what you are reading, subscribe to our newsletters now at www.chan-naylor.com.au Disclaimer

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